Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures.
X
Wednesday’s stock market rally extended recent gains ahead of Thursday’s CPI inflation report. Investors are betting on tame inflation data, raising the stakes for the key Fed report.
amazon.com (AMZN) and Tesla stock led a super rally on Wednesday, with Apple (AAPL), Microsoft (MSFT) and the parent company of Google Alphabet (GOOGLE) has a solid session. Tesla (TSLA) and AMZN stock respectively reflect strong performance in auto/EV names and e-commerce plays.
C Corporation (CELH) warms up on Wednesday, giving a buy signal.
CELH stock has been added SwingTrader on Wednesdays and IBD Rankings watchlist. degrees Celsius is also Wednesday IBD shares of the day.
Main income
KB Homepage (KBH) income statement after closing, start housing reporting. KBH shares fell slightly when Income at home KB fell heavily from the financial Q1 view, with revenue also missing. KB Home shares rose 3.2% on Wednesday to their best level since March 2022, up nearly 13% year-to-date.
Shares in homebuilders and housing-related names in general have rallied in recent weeks. How will they react to the results of KB Home?
Taiwan Semiconductor (TSM) earnings announced early Thursday, the first big chip results for the latest quarter. TSM stock was up 0.6% on Wednesday, just below its 200-day moving average.
Disney exploits Nike Veteran
Walt Disney (dis) named Nike (NKE) Chairman Mike Parker as the new chairman, replacing Susan Arnold. Parker has been on Disney’s board for seven years.
Meanwhile, Disney recommends shareholders vote on its board rankings and does not favor activist investor Nelson Peltz, who is looking to join the entertainment giant’s board. Dow Jones.
DIS stock rose modestly. Nike, a Dow Jones stock like Disney, Apple and Microsoft, was little changed after hours.
CPI . Inflation Report
The December consumer price index will be released at 8:30 a.m. ET.
Economists expect consumer prices to stabilize after rising 0.1% in November. Core CPI is forecast to increase by 0.3% following a 0.2% increase in November. CPI inflation rate overall will continue to cool down to 6.6% from 7.1% in November. Core inflation is expected to slow to 5.7% from 6% in November.
The CPI inflation rate peaked at 9.1% last June, while the core CPI inflation rate hit 6.6% in September, both of which are 40-year highs.
Other data this week, including New York Fed inflation expectations and small businesses job openings and hiring plans, is showing that inflation and the labor market are cooling.
A controlled inflation report will peg the Fed’s 1/4 point rate hike at its February 1 policy meeting, slowing from 50 basis points and 75 basis points in the previous two meetings. More importantly, cooling inflation could raise expectations that the Fed will pause rate hikes, possibly after the March meeting.
Dow Jones Futures Today
Dow Jones futures were up a fraction of their fair value, along with S&P 500 futures. Nasdaq 100 futures were unchanged.
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 rally has added to recent gains, with the major indexes closing near session highs for the second straight session. Nasdaq led the way thanks to Amazon and large-cap growth names.
The Dow Jones Industrial Average rose 0.8% on Wednesday stock market trading. The S&P 500 index rose 1.3%. Nasdaq composite rose 1.8%. The Russell 2000 small-cap index rose 1.2%.
US crude oil prices rose 3.1% to 77.41 USD/barrel.
The yield on the 10-year Treasury note fell 6 basis points to 3.55%.
ETFs
Among the growth ETFs, the Innovator IBD 50 ETF (FFTY) increased by 1.3%. iShares Expanded Tech-Soft Sector Sector ETF (IGV) rose 1.6%, regaining the 50-day border, with MSFT stock that the big IGV is holding. VanEck Vectors Semiconductor ETF (SMH) up 1.2%, moving above the 200-day line. TSM stock is a flagship component of SMH.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) rose 3.4% and the ARK Genomics ETF (ARKG) 3.7%. Tesla stock remains the top hold on Ark Invest ETFs. Cathie Wood’s Ark has been uploaded on TSLA stock in recent days and weeks.
SPDR S&P Metals & Mining ETF (XME) rose 0.5% and the Global X US Infrastructure Development ETF (PAY THE ROAD RED) increased by 1.3%. US Global Jets ETF (jet plane) increased by 0.4%. SPDR S&P Homebuilders ETF (XHB) increased by 2.6%. Energy Select SPDR ETF (XLE) rose 0.3% and the Financial Select SPDR ETF (XLF) increased by 0.9%. SPDR Foundation for healthcare sector (XLV) added 0.6%.
The five best Chinese stocks to watch right now
Super Cap Stocks
Tesla shares rose 3.7% to 123.22, extending the rally from Friday morning’s bear market low of 101.81. The stock remains below the 21-day line that has long since fallen. Tesla is planning a large factory expansion in Austin and is said to be close to reaching a preliminary agreement for a new factory in Indonesia. The latter could complicate Tesla Shanghai’s demand issues.
Amazon stock rose 5.8 percent to 95.09, closing above its 50-day moving average for the first time in four months. AMZN stock also set a bear market low last Friday.
Apple shares rose 2.1%, back above the 21-day line. It happened even though Barclays slashed its AAPL price target, citing undermine Apple’s demand across a wide range of products.
Google shares rose 3.5%, also reclaiming the 21-day line. Microsoft stock rose 3%, just below its 21-day moving average after plunging last week.
Stocks
CELH stock rose 5.3% to 106.57 on Wednesday on heavy volume, following a bullish reversal on Tuesday. The stock rallied from the 50-day moving average, broke the trend line, and closed above the 21-day moving average. All that provide a buy signal. CELH stock hit an intraday high of 108.80, but closed very strong.
Analysis of market recovery
The stock market rally showed greater strength on Wednesday ahead of the CPI inflation report.
The S&P 500 index moved further away from its 50-day moving average and hit an all-day high on Tuesday. Although still below the 200-day line, the benchmark index has crossed its 10-week and 40-week lines. The Russell 2000 crossed the 200-day line after hitting a 50-day top on Wednesday.
Nasdaq, which has been falling in recent months, has crossed the 50-day line for the first time in almost a month.
Meanwhile, the leading stocks showed positive action overall. CELH stock gave a buy signal. Stocks that have broken out recently often hold up or continue to rise.
Apple, Tesla, Amazon and other supercaps are far from taking action, but at least they don’t affect the major indexes.
Just looking at the major indexes and leading stocks, the stock market rally is showing healthy action, although more resistance lies ahead.
But assembling key Fed economic data or events has been difficult over the past few months. Yes, a pure CPI inflation report can cause the market to recover quickly. But a hotter-than-expected outcome could trigger a massive sell-off. And the market is pricing in “good news”.
Of course, what matters is not the news, but the reaction to the news. The November CPI inflation report colder-than-expected December 13, pushing the major indexes to their best intraday levels in months. But that was the high for the October-December market rally. Indices closed at the highs that day and slid lower until near the end of the year.
Market Timing with IBD’s ETF Market Strategy
What to do now
Investors may have added some exposure in recent days with the indexes moving higher and many stocks issuing buy signals.
Those recent purchases may look great on Thursday, but they could all be explosive, too, depending on the December CPI inflation report.
Therefore, investors should not pay too much attention to the inflation report.
But be ready for action if key indicators show strong action after the opening bell. Lots of quality stocks are flashing buy or setup signals.
Don’t forget about earnings season. JPMorgan Chase (JPM) and several other banking giants reported Friday morning, along with Delta Airlines (OBTAIN) and UnitedHealth (UNH).
Shares of Microsoft and Tesla will expire in two weeks, with Apple, Amazon and Google soon to follow.
Earnings results and guidance will be important in uncertain economic times.
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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