Dow Jones futures fell slightly after hours, along with S&P 500 and Nasdaq futures. Airbnb (ABNB) after-hours income statement title with Shopify (SHOP) leads the way ahead of Wednesday’s open.
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The stock market rally closed mixed, at session lows despite the hot January CPI inflation report. Both core and core CPI inflation rates continue to fall lower, but less than Wall Street expected. Treasury yields have finally rebounded as market prices in subsequent Federal Reserve rate hikes.
Several top stocks signaled buy on Tuesday, including Boeing airplanes (father), Network Arista (NET), stop wings (WING), Span Design System (College of Arts) And Marriott International.
TSLA stock, which has surged into 2023, edged higher on Tuesday despite weekly decline Tesla (TSLA) The number of EV registrations dropped last week.
Airbnb and TripAdvisor (TRIP) led the important earnings reports late Tuesday.
ABNB stock flew into buy zone after hours as Airbnb earnings beat views with also strong guidance. TRIP stock spiked on its results after closing back above buy points.
However, Credo Technology Corporation (CRDO) collapsed hours after warning of a massive shortage in the fourth quarter of April. It had $30 million to $32 million in sales compared to $58 million in views, which said its biggest customer was cutting back. CRDO stock, once trading near record highs, fell more than 40% overnight.
In other news, Warren Buffett of Berkshire Hathaway (BRKB) reveal it 4Q Investment Hold vs. SEC filings Tuesday. Berkshire continues to add Apple (AAPL) shares, but almost sold out Taiwan Semiconductor (TSM) shares after buying them in Q3. TSM stock fell slightly overnight.
Shopify Earnings Early Wednesday
E-commerce software giant Shopify, biology (BIIB), Analog Devices (ADI), Trading desk (TTD), Roblox (RBLX), Taylor Morrison’s House (TMHC) and more will be broadcast early Wednesday.
TMHC and Analog Devices stock closed Tuesday in traditional buy zones. SHOP stock is up slightly while Biogen stock is just below a positive entry point as well as a buy point. Trade Desk and RBLX stock are at the bottom but between the 200- and 50-day lines.
WINGS stock is on IBD Rankings. BA goods have arrived SwingTrader. CDNS stock is active Long-term leadership of IBD. Rhythm design. Wingstop and ANET shares are on the floor IBD 50. ADI and Arista Networks stocks are on the rise Large hat 20.
The video embedded in this article discusses Tuesday’s market action and analysis of Boeing, Wingstop, and MAR stocks.
Dow Jones Futures Today
Dow Jones futures contract fell below fair value. S&P 500 futures and Nasdaq 100 futures lost 0.1%.
Remember that action overnight in future index and other places that don’t necessarily translate into actual transactions the next time stock market meeting.
Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live
Stock market recovers
The stock market rallied briefly on Tuesday morning, but strengthened in the afternoon and ended mixed.
The Dow Jones Industrial Average fell 0.5% on Tuesday stock market trading. The S&P 500 index lost a small portion, although shares of Tesla, Aptiv and CDNS rose sharply. The Nasdaq composite rose 0.6 percent. The Russell 2000 Small Cap Index Drops
US crude oil prices fell 1.4% to $79.08 per barrel. Natural gas futures rose 6.7%, trying to stabilize after falling from late-August highs.
The yield on the 10-year Treasury note rose 4 basis points to 3.76%.
The yield on the six-month T-bill was at 5.02%, above 5% for the first time since 2007. The yield on the one-year Treasury note was up to 4.99%. These rising rates suggest that markets have finally come to believe Fed policymakers that rate hikes will exceed 5% and stay high. Some of this reflects optimism that the economy won’t slip into a recession, but it’s also a sign that inflation could soar.
Markets are currently pricing in three more quarterly rate hikes, bringing the federal funds range to 5.25%-5.5% ahead of the June or July policy meeting.
ETFs
Among the growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.9%, while Innovator’s IBD Breakthrough Opportunity ETF (HOUR) increased by 1%. iShares Expanded Tech-Soft Sector Sector ETF (IGV) increased by 1.1%. VanEck Vectors Semiconductor ETF (SMH) increased by 2.15%.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) spiked 2.5% and the ARK Genomics ETF (ARKG) increased by 0.8%. Tesla stock remains a large holding on Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) increased by 2.4%. US Global Jets ETF (jet plane) increased by 1.6%. SPDR S&P Homebuilders ETF (XHB) decreased by 0.4%. Energy Select SPDR ETF (XLE) is just above breakeven while the Financial Select SPDR ETF (XLF) decreased by 0.5%. SPDR Foundation for healthcare sector (XLV) lost 0.6%.
The five best Chinese stocks to watch right now
Tesla shares
TSLA stock rose 7.5% to 209.61, up 106% from the January 6 bear market low of 101.81.
Tesla China electric vehicle registrations fell to 6,963 in the week ended February 12 from 8,643 in the previous week, while BYD[ticker symb=BYDDF] and most other EV manufacturers have higher registration numbers. That drop in itself could indicate that the increased demand from Tesla’s big sale is fading. However, Tesla Shanghai’s recent output exports may explain the lower local sales figures.
Outside of the Model Y in the US, however, there are signs that Tesla’s demand is fading.
Investors may be looking forward to Tesla’s investor day of March 1. CEO Elon Musk is expected to announce his Part Three Master Plan, with Tesla providing provides more details about the new EV platform. Analysts will also look for updates on the Cybertruck and any confirmation of the long-rumored Model 3 revamp.
Analysis of market recovery
The stock market rally took some abrupt action on Tuesday morning but ended up closing relatively well. Given that stocks rallied on Monday, Tuesday’s action on the hotter-than-expected January CPI inflation report was pretty positive.
The Nasdaq and S&P 500 are comfortably above the 21-day moving average, while the Dow Jones and Russell 2000 find support at that key level.
So far, the major indexes are trading this week within the range of last week, also a week of the week.
In the end, it’s not the news, it’s the reaction to the news.
Whether it’s the major indexes or individual names like Tesla stock, the 2023 market has generally reacted positively to mixed earnings, economic data, and other news.
While the indices vary, the leading stocks are generally higher.
Arista Network, global foundry (GFS), CDNS and Marriott stocks erased buy points on earnings, even though they are up against the 50-day moving average.
Aptiva (APTV), one of the auto parts manufacturers showing strength, regained a buy point on Tuesday and then ran through a buy zone.
BA stock cleared a new buy point on a Boeing’s large jet order from Air India. WINGS stock boomed and holding (ABOVE) flashed an active entry.
Market Timing with IBD’s ETF Market Strategy
What to do now
The stock market rally remains healthy, with the major indexes consolidating over the past several sessions.
Investors can choose to add exposure carefully. As you add new positions, do so as close to the buy point as possible. Don’t buy expansion stocks. Get ready to quickly cut the losers or if a solid round trip is achieved.
Keep working on those watchlists. The pause in the market recovery has created an opportunity for stocks to set up again. The top stocks are all pushing prices higher, so you want to be ready,
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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