Dow Jones futures rose Wednesday morning, along with S&P 500 futures and Nasdaq futures. MSFT shares drove earnings as a parent of Microsoft and Google Alphabet (GOOGL) titled Overnight Earnings.
The stock market tumbled on Tuesday, with the Nasdaq breaking below its March lows Tesla (TSLA) crashed in reaction to CEO Elon Musk Twitter (TWTR) deal.
Furthermore Microsoft (MSFT) and Google shares, General Motors (GM), Edwards Life Sciences (EW), Visa (V) e Juniper nets (JNPR) were among the many notable companies that reported late Tuesday. first wednesday, General dynamics (GD) beat views while Boeing (BA) posted a large loss and disappointing revenues.
Tesla and Microsoft shares are in the IBD rankings. MSFT and Google shares are on the list of IBD long-term leaders.
The video embedded in this article discusses Tuesday’s market sales and analyzes Tesla stock, Waste management (WM) e Chenière Energy (GNL), another title in the ranking.
Dow Jones Futures today
Dow Jones futures were up 0.8% from fair value. S&P 500 futures were up 0.6%. Nasdaq 100 futures were up 0.5%. Those are off the morning peaks, but are firming up again. Microsoft shares are a giant of the Dow Jones, the S&P 500 and the Nasdaq. Visa and Boeing are Dow and S&P 500 components while Google’s shares are on the S&P 500 and Nasdaq.
Covid cases in Shanghai are easing, but the blockages won’t go away anytime soon. Meanwhile, dozens of infections have been detected in Beijing, raising expectations of a lockdown in the capital.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session of the stock market.
Microsoft’s earnings outperformed its fiscal third quarter results amid strong cloud-related growth. Microsoft shares initially fell but rebounded as the tech titan drove strong cloud growth. MSFT shares were up 4% prior to opening. Shares fell 3.7% to 270.22 on Tuesday, hitting a March low of 270 intraday.
Google’s revenue fell while revenue was just a hair below estimates. The internet giant has announced a $ 70 billion buy-back of Google stock. Google’s stock fell 4% on Wednesday to early Wednesday, even though it was off the worst levels. Google fell 3.6% to 2,373 on Tuesday, a 10-month low.
Edwards Lifesciences’ earnings barely outpaced views as the medical product maker reaffirmed the lead. The EW stock skidded nearly 4% in extended trading. Shares fell around 3% to 116.27 on Tuesday. Edwards stock exploded last week, but fell below the buy point on Friday.
GM’s earnings fell but outpaced views as revenue emerged. GM shares rose slightly before the opening. Shares fell 4.5% to 38.04 on Tuesday, the lowest close since late 2020.
Visa earnings comfortably beat consensus Visa shares rose solidly overnight. Shares fell 4.2% to 201.10 on Tuesday, losing sight of the 50- and 200-day lines.
Juniper earnings just missed while revenue only surpassed targets. JNPR shares fell sharply in sustained action. Shares fell nearly 3% to 33.60 on Tuesday, down from its 50-day line. Juniper’s stocks have held up better than most tech stocks.
General Dynamics earnings and revenue topped first-quarter views, part of a big week for defense earnings. General Dynamics stock was still not active after falling 0.9% to 236.96 on Tuesday, just above its 50-day line. GD shares are working on a flat basis with a buy point of 255.09.
Boeing reported a large loss and large consumption of money as revenue emerged. The aerospace giant in the first quarter presented a plan to the FAA to resume 787 shipments of Dreamliner by the end of the year, but will stop production of 777s until 2023. BA shares fell 4%.
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Tuesday on the stock exchange
A one-day stock market rally quickly fell apart as major indices fell sharply. The Dow Jones Industrial Average fell 2.4% in the stock market on Tuesday. The S&P 500 index fell 2.8%, with Tesla and Electrical general (GE) the biggest losers. The Nasdaq composite collapsed by nearly 4%. The Russell 2000 small cap fell 3.15%.
US crude oil prices jumped 3.2% to $ 101.70 a barrel.
The 10-year Treasury yield fell 5 basis points to 2.77%.
Of the top ETFs, the Innovator IBD 50 ETF (FFTY) lost 2.9%, while the Innovator IBD Breakout Opportunities ETF (BOUT) was up 0.7%. IShares Expanded Tech-Software Sector ETF (IGV) fell 3.7%, with Microsoft shares in one of IGV’s major holdings. The VanEck Vectors Semiconductor ETF (SMH) lost 4.3%.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) plunged 6.75% and ARK Genomics ETF (ARKG) 6%. Both have reached their lowest levels since April 2020. The relative strength lines of ARKK and ARKG are at their lowest point in nearly five years, which means that investors would have done better to hold the S&P 500. Tesla stock is the No. . 1 holding in Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) lost 1.75% and the Global X US Infrastructure Development ETF (PAVE) lost 2.2%. US Global Jets ETF (JETS) fell 4.2%. SPDR S&P Homebuilders ETF (XHB) fell 2.3%. The Energy Select SPDR ETF (XLE) was up 0.1% and the Financial Select SPDR ETF (XLF) was down 2.5%. Health Care Select Sector SPDR Fund (XLV) fell 1.8%
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Tesla stock plunged 12.2% to 876.42 on Tuesday, dropping below the 50-day and even 200-day moving average.
Investors seem concerned that CEO Elon Musk will sell a significant portion of his TSLA stock to pay for his Twitter deal. Musk is funding the $ 44 billion Twitter acquisition with $ 12.5 billion backed by some of his TSLA shares and another $ 21 billion in funding that he personally secured but offered few details about. Twitter stock fell 3.9% to 49.68 on Tuesday, creating a larger gap from the $ 54.20 purchase price.
Tesla stock has been trading around the 1,000 mark in the past two weeks, which has been encouraging. But in a market correction, stocks sometimes hold out for a few days or even a few weeks before suddenly breaking out.
Tesla stocks look even better than other electric vehicle and automotive stocks and all mega-caps with the possible exception Apple (AAPL). But that doesn’t say much.
The shares have not returned to their mid-March levels, but have retraced all or most of the gains since the TSLA stock broke its 200 and 50 day lines.
Technically, TSLA shares still have a buy point of 1,152.97 cup with handle, according to MarketSmith analysis. But the graph doesn’t look correct. It would be better if Tesla’s handle developed into its own base.
TSLA stock rose Wednesday, while Twitter fell.
The Ford F-150 Lightning production event on Tuesday signals further competition in the US for Tesla, which won’t start producing its Cybertruck at least next year. Meanwhile, Tesla will almost certainly lose its electric vehicle crown in terms of vehicles sold in the second quarter BYD (BYDDF), although the Chinese electric vehicle and battery giant will do so by combining electric and hybrid vehicles.
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The Nasdaq, the S&P 500 and finally the Dow Jones all reduced Monday’s intraday lows, ending their one-day rally attempts.
The Nasdaq cut its March 14 low to its worst level in 13 months. This marks a new stage in the Nasdaq’s ongoing bear market, 23% below the November peak.
The Dow and the S&P 500 are nearing their 2022 lows.
The major indices are faltering with damage spread across the market and still don’t seem to be signaling a low.
The CBOE Volatility Index, linked to the S&P 500 Index, has jumped to its highest point since mid-March, but the VIX is still well on its February high. However, the CBOE Nasdaq Market Volatility Index is hitting its late February / early March highs.
With Microsoft shares plunging and Google crashing overnight, fear may begin to rise, especially with major indices plummeting as Tesla and Apple move below their 200-day lines.
Energy stocks tried to rally on Tuesday as crude oil prices recovered to the $ 100 a barrel level. The fertilizer games are finding key support ahead of next week’s earnings. Health insurers and the pharmaceutical sector are still holding up well, although a number of drug stocks are reporting in the coming days. Defense stocks appear to find support not far from the buying points.
Waste Management has sent buy signals on its excellent results, while Waste connections (WCN) hangs around a point of purchase.
But in most cases, even strong groups have had a downward trend in the past couple of weeks.
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what to do now
The stock market is correcting and has shown no real signs that the bleeding will stop anytime soon. Investors should keep exposure to a minimum or be entirely in cash.
Tuesday’s big sell-off following Monday’s rebound shows why investors shouldn’t jump to the first upside in a correction. This is the time to look for stocks that hold up and have strong or rising RS lines. But as the sudden drop in Tesla shares showed, resilient names and sectors can suddenly break down. This is the time to create watchlists, not to make new purchases.
Read The Big Picture every day to stay in tune with the direction of the market and major stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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