Dow Jones Futures Rise as Netflix Soars; Why Elon Musk Might Be More Optimistic With Tesla Earnings Call
Dow Jones futures rose slightly on Wednesday morning, along with S&P 500 futures and Nasdaq futures, amid Netflix (NFLX) subscriber growth and other upbeat earnings reports. But futures contracts have been steadily rising as Treasury yields near highs. Meanwhile, Tesla’s earnings tonight remain low.
X
The stock market rally added to Tuesday’s gains but closed off the highs in a volatile session. Report of Apple (AAPL) iPhone manufacturing doesn’t help. Shares of Apple briefly fell lower but managed to close slightly higher.
While the market rally is still going on, it has not confirmed anything yet. Investors need to be careful and careful.
Netflix Subscriber Growth much stronger than expected in Q3, with the streaming giant also upbeat about Q4 customers. Earnings also topped. Netflix stock rallied, signaling a breakout. Disney (DIS) and Roku (ROKU) also increased overnight.
Intuitive surgery (ISRG) beat Q3 EPS and revenue forecast. ISRG stock spiked overnight. Visual stocks are near the lows. But the results for the maker of robotic surgical systems could bode well for other medical device companies.
United Airlines (UAL) delivered Strong Q3 earnings and Q4 guidanceaccording to an optimistic outlook from Delta Airlines (DAL) last week. UAL stock jumped in extended trading, with Delta adding to its regular session gains.
ASML (ASML) reported better-than-expected third-quarter earnings and a strong backlog early Wednesday. The Dutch chip equipment giant said it was unaffected by the US ban on chip exports to China. Lam Nghien (LRCX) after Wednesday night. ASML stock was up before the open, with Lam Research also rising. ASML and LRCX shares are just above their lowest levels since 2020.
Tesla (TSLA) on Wednesday night. The EV giant will deliver strong earnings growth, but investors will want reassurance about the future.
Meanwhile, there is new evidence that Elon Musk Twitter (TWTR) a takeover may be imminent. TWTR stock isn’t far from the $54.20 a share buyback price.
Dow Jones Futures Today
Dow Jones futures were up 0.1% from fair value, with DIS stock up slightly. S&P 500 futures rose 0.2%. Nasdaq 100 futures are up 0.45%. NFLX stock, Visual Surgery, and United Airlines are components of the S&P 500 and Nasdaq 100.
Futures are at a high, with Nasdaq futures at one point rising more than 1.5% overnight.
UK inflation rebounded to a 40-year high of 10.1 percent in September, pushing yields higher.
The yield on the 10-year Treasury note rose 7 basis points to 4.07%, near last week’s 14-year high of 4.08%.
Crude oil futures rose more than 1%.
According to reports late Tuesday, the US may increase sales of Strategic Oil Reserves in the winter. The government will commit to buying back crude oil reserves at or below $67-$72 per barrel.
Cases in Beijing Covid have hit a four-month high, stoking fears of severe restrictions or lockdowns in the capital and elsewhere.
Remember that action overnight in Dow futures contract and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.
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Rally stock market
The stock market rally started off strong but fell to highs almost immediately. A volatile session followed, although the major indexes closed with strong to strong gains.
The Dow Jones Industrial Average rose 1.1% on Tuesday stock market trading. The S&P 500 index rose 1.15%. The Nasdaq Composite Index rose 0.9 percent. The small-cap Russell 2000 gained 1.2%.
The yield on the 10-year Treasury note fell 1 basis point to 4%, after falling to 3.97% shortly after the market opened, then rising to 4.07%, just below its all-time high. the last 14 years.
US crude oil prices fell 3.1% to $82.82 per barrel amid reports that the Biden administration will release more crude from the SPR. Natural gas futures prices fell 4.2% after falling 7% on Monday.
ETF
Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) rose 1.15%, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) increased by 1.3%. iShares Expanded Software-Technology Sector ETF (IGV) increased by 1.7%. VanEck Vectors Semiconductor ETF (SMH) closes just above breakeven. ASML and LRCX stocks are significant SMH stocks.
SPDR S&P Metals & Mining ETF (XME) increased 1.3% and the US Global Infrastructure Development Fund X (SAVE) is added 2%. US Global Airplanes ETF (JETS) rose 2.5%, with key components of United Airlines and DAL shares.
SPDR S&P Homebuilders ETF (XHB) add 2.3%. The Energy Select SPDR ETF (XLE) rose 0.9% and the financial SPDR ETF (XLF) reached 1.6%. SPDR Fund for the Healthcare Sector (XLV) increased by 0.6%.
Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) rose 1.6% and the ARK Genomics ETF (ARKG) increased by 1.3%. Tesla stock is the top holding on Ark Invest ETFs.
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Apple iPhone concerns
Apple is cutting production of the iPhone 14 Plus just two weeks after the large-screen phone went on sale. That’s according to The Information, citing sources. That follows previous reports that the tech giant Dow Jones is starting to produce the iPhone 14 in general. However, the 14 Plus is not considered a hot seller, as investors focus more on the more expensive iPhone 14 Pro versions.
The iPhone Plus report comes out as Apple launches new iPad.
Apple earnings are due on October 27.
Apple shares rose 0.9% to 143.75 on Tuesday. Still, the stock rallied as much as 3.1% on the day, their 21-day topping.
Netflix Subscribers
Netflix earnings exceeded estimates as subscribers grew by 2.41 million, compared with analyst views of about 1 million. And the tech giant saw a 4.5 million increase in subscribers in Q4. The streaming giant on November 3 will launch its ad-supported tier for $6.99 a month. Netflix is also stepping up efforts to prevent password sharing in the hopes of increasing subscriber numbers.
But the days of easy subscriber growth are long gone. It’s been an uphill, costly battle just to retain existing customers, with Disney+, Apple+, HBO Max, Paramount+ and more battling for viewers’ eyeballs and wallets.
NFLX stock rose 14% to about 275 in extended trading. Shares fell 1.7% to 240.86 on Tuesday after gaining 6.7% on Monday. Netflix stock has 252.09 buy points from a bottom base, according to MarketSmith Analysis. It could easily clear that level, but could test its 200-day slide.
Disney shares rose 3% in pre-market trading. DIS stock rose 1.2% on Tuesday, below 50- and 200-day declines.
Roku stock was up 4% in prolonged actions. Shares have fallen since hitting a record 490.76 in July 2021, but were up 1.3% on Tuesday.
Tesla earnings
Tesla earnings will arrive late Wednesday. Analysts expect Tesla’s earnings to grow 76 percent from a year earlier, with revenue surging.
But concerns about demand are growing amid soaring output and shrinking backlogs. So investors will be eager for comments on Tesla deliveries in Q4 and next year.
Tesla shares rose 0.4% to 200.19 on Tuesday after surging as high as 229.75 in the morning. Tesla stock hit a 15-month low on Friday.
CEO Elon Musk may have more reason to be upbeat on Wednesday night’s earnings call. Assuming the deal with Twitter closes, perhaps on October 28, Musk may need to sell more Tesla stock in the coming days to help pay for the $44 billion acquisition. Some estimates suggest that Musk may need to sell another $8 billion in TWTR stock.
Twitter locked employees’ stock accounts on Tuesday in “anticipation” of a deal, Bloomberg reported. Twitter shares rose just over 2% to 51.78.
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Market aggregation analysis
At Tuesday’s open, the S&P 500 and Nasdaq composite surpassed their 21-day moving averages, joining the Dow Jones and Russell 2000. All major indexes also rallied above Friday’s highs. , after all were in on Monday despite the big increase.
The major indexes cut or erased gains as Treasury yields neared recent highs, recovered somewhat, then returned to Apple iPhone news. Nasdaq was below its 21-day mark while the S&P 500 closed slightly above it, but in the lower half of the range.
At one point, the major indicators signaled the possibility track date to confirm a new uptrend. The Dow and S&P 500 closed solidly higher, with volume above Monday’s levels. But the gain was not strong enough to qualify for the next one. Closing highs do not accurately signal intensity.
FTD can happen at any time. A confirmed market rally would be a positive signal, but not a guarantee. Even if it works, it could be another bear market rally hitting resistance at the 50-day or 200-day lines.
Booz Allen Hamilton (BAH) erupted in the past flat sole buy point, closing near the session high. The relative strength line for BAH stock is at a new high, but the growth of the consulting firm is quite modest.
Aehr test system (AEHR) removed entry 17.80 in high volume. The RS line for AEHR stock is at its 2022 high. But the stock is above the 50-day line and is prone to big swings.
DoubleVerify (DV) has come right to the buy point and is believed to have topped several entries slightly lower before dropping gains.
Meanwhile, Shockwave Medical (SWAV) and Wolfspeed (WOLF) reached resistance around their 50-day lines.
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What to do now
This is an exciting time. The market’s recovery attempt has made some progress, but action has been volatile, with both resistance and support at the 21-day line. Buying stocks is a tricky business, because if you buy into strength, profits can quickly disappear if the market reverses from the highs of the day.
So if you make any moves, step in slowly and be ready to quickly exit.
There is nothing wrong with holding completely or almost all in cash, waiting for more clarity in the market.
But in the meantime, stick with the market. And work on those watchlists. Stocks can quickly move in or out of position in the current environment, so make sure your watchlist is up to date. Focus on a select group of actionable or near-actionable stocks, while tracking a broader list of stocks that exhibit relatively strong strength.
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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