Dow Jones Futures: After Stock Market Rally’s Ugly Outside Week, Here’s What To Do

Dow Jones futures were little changed Sunday evening, along with S&P 500 futures and Nasdaq futures.




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Stocks took a hit last week due to a dovish Fed outlook and weak economic data that fueled concerns that the Federal Reserve will push the economy into recession. The Nasdaq and S&P 500 closed the week below their 50-day moving average.

Megacap companies focus on major indexes, in particular The night (AAPL) and Tesla ( TSLA ), with TSLA stock heading into a new bear market decline. Amazon.com (AMZN) and parent Google Alphabet (GOOGL) are not far from their lows. Microsoft didn’t lose much for the week but retreated from the 200-day line. Nvidia (NVDA), which was part of the return of the chip, opposite the bottom, the back of the main support.

But the megacaps don’t hide the underlying power. Most of the stocks that have been burning buy signals in recent days and weeks have turned south. Leading sectors were also damaged.

Insulate (PODD), Commercial Metals (CMC), Elf Beauty (ELF), Peabody Energy (BTU) and Dow Jones giant Mashot (CAT) cope relatively well. However, currently one is not active.

Investors should be cautious about buying in the current market, but focus on reducing exposure and building watch lists.

The video included in this article takes an in-depth look at market action, while also analyzing the stocks of Insulet, Elf Beauty and CAT.

Dow Jones Futures Today

Dow Jones futures were down against fair value. S&P 500 futures and Nasdaq 100 futures were little changed.

The 10-year Treasury yield rose 3 basis points to 3.51%.

Crude oil futures rose.

Remember that overnight activity in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular market session.


Join IBD experts as they analyze active stocks in the market rally on IBD Live


Stock Market Rally

The stock index rose on Tuesday morning, but then sold off sharply, ending the week with sharp losses.

The Dow Jones Industrial Average fell 1.7% in last week’s stock market trading. The S&P 500 index fell 2.1%. The Nasdaq composite fell 2.7%. The small-cap Russell 2000 yielded 2.4%.

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The 10-year Treasury yield fell 9 basis points to 3.48%. Despite the bullish Fed speech, markets expect a quarter-point hike in February and March, but with a high chance that there will be no move in March.

US crude oil prices rose by about 5% last week to $74.29.


Dow Giant Leads to 5 Resilient Stocks


ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF ( IGV ) pared big early gains to end the week up 0.5 percent, with MSFT holding the lead. The VanEck Vectors Semiconductor ETF (SMH) lost 2.9% in its off-week retracement, down. Nvidia Corporation is a component of the above SMH.

On a more speculative stock story, the ARK Innovation ETF (ARKK) fell 4% last week, just above a five-year low. ARK Genomics ETF ( ARKG ) fell 0.4%. Tesla Inc. remains a major shareholder in all of Ark Invest’s ETFs.

The SPDR S&P Metals & Mining ETF ( XME ) fell 2.6% last week. The Global X US Infrastructure Development ETF (PAVE) lost 2.6%. The US Global Jets ETF (JETS) fell 3.6%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.4%, but closed near weekly lows. The Energy Select SPDR ETF (XLE) rose 2 percent and the Financial Select SPDR ETF (XLF) rose 2.5 percent. The SPDR Health Care Select Sector Fund ( XLV ) shed 1.8 percent after hitting near record highs on Tuesday.


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Megacap Stocks: From Mediocre to Meltdown

Dow Jones technology titan Apple fell 5.4% on the week, falling to 134.51. AAPL hit October-November lows, with the June market close at 129.04 later rising. Dow partner Microsoft fell 0.3% to 244.69, but after pulling back from 263.92 on Tuesday morning it fell into the 200-day line. Amazon stock was down just 1.4% at 87.66, but off its weekly high of 96.25 and nearing 85.87 on Nov. 9. Google shares fell 2.8 percent, down from Tuesday’s high. Nvidia rose above its 50-day line earlier in the week, but fell 2.5%.

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Tesla stock was the biggest loser, down 16.1 percent to 150.23, its lowest since November 2020. It was the worst weekly decline since the Covid-19 outbreak in March 2020. Concerns about China’s demand, Elon Musk’s recent TSLA stock sale and Musk’s Twitter focus all weigh heavily. on shares.

Tesla will build a new automotive factory in northeastern Mexico, Bloomberg reported Friday night, with an announcement likely in the coming days. It is not clear which vehicles the factory can produce. A Mexico factory would provide lower costs compared to Tesla’s Fremont, Austin and Berlin factories, while still being close to the United States.


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Market Rally Analysis

Within a few days, the stock market rally suddenly went from an upswing to a downtrend. The weekly losses on the major indexes were large, but the damage was much worse.

Soon after Tuesday’s open, the major indexes all edged higher on a full inflation report, with the S&P 500 climbing back above its 200-day line and the Dow Jones at its best levels in nearly eight months. But indexes pared gains, with the S&P 500 closing at a 200-day low. On Wednesday, the major indexes were reversed as the Federal Reserve and Fed Chairman Jerome Powell signaled several rate hikes ahead.

On Thursday, sales rose amid weak economic data that fueled fears of a recession. The Nasdaq and Russell 2000 fell below their 50-day lines, while the S&P 500 and Dow Jones broke below their 21-day lines. All fell to their worst levels in a month, reducing the downside trading for weeks.

On Friday, the S&P 500 fell below its 50-day line. The Dow is almost there.

It was a big and negative outside week for all major indices, with highs and lows exceeding the range of the previous four weeks.

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The leading companies, with few exceptions, have been destroyed. Industrial, solar, medical, travel and various chip and network names are all under pressure.

Megacap companies remain fully transparent laggards. Tesla stock continues to hit new two-year lows. While Google is moving in that direction, Amazon’s stock is just at market lows. AAPL’s stock fell to its lowest level in six months, amid bearish declines.

Microsoft and Nvidia stocks may not be lagging behind, but they’re not leading either. Both are below the 200-day ranges.

This trend may be a bear market trend that is running its course, with the indices moving towards their October lows. The S&P 500 may bounce back quickly or be back for a long time.

The only thing that is clear is that the market is not doing well right now.


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What to do now

Investors should reduce exposure due to overall market volatility and the performance of most individual stocks.

While under pressure, it is still a market leader. A few good days can boost confidence in the uptrend and send more stocks back to buy zones. Of course, even in that scenario, investors should be wary of new purchases, given the rally’s pattern of pulling back and eliminating solid gains.

So stay busy. Work on checklists. Focus on stocks that hold key moving averages and support levels and often exhibit strong relative strength, such as Caterpillar, Insulet and ELF stocks.

Read The Big Picture every day to stay in sync with market direction and leading companies and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson for stock updates and more.

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