Dow Jones Futures: Jobs Report Offers Big Market Test; Tesla Slashes China Prices

Dow Jones futures were slightly higher overnight, along with S&P 500 futures and Nasdaq futures. All eyes are on the December jobs report due Friday morning.




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Tesla (TSLA) announced major China price cuts for the Model 3 and Model Y due to concerns about demand and increased competition.

World Wrestling Entertainment (WWE) and Aehr Test Systems (AEHR) rose in extended trading on Thursday, when Bed Bath & Beyond (BBBY) was constantly on the news.

The stock market suffered steep losses on Thursday on warmer labor data, including unemployment claims, ahead of a big jobs report. Major indicators retreated from key levels.

Microsoft ( MSFT ) extended Wednesday’s big selloff Tesla (TSLA) abandoned the first-day multiple. In the meantime, UnitedHealth (UNH), Cigna (CI) and other health insurers continued to have a terrible start to the new year.

The video included in this article analyzed and evaluated market activity United Therapeutics (UTHR), Trane Technologies (TT) and stock CI.

Investors should wait until there are clear signs of market strength before increasing exposure. Friday’s jobs report could provide a catalyst, but in what way?

Dow Jones Futures Today

Dow Jones futures rose 0.3% versus the real price. S&P 500 futures rose 0.4%. Nasdaq futures advanced 0.4%.

The price of crude oil increased by 1%.

The 10-year Treasury yield fell 1 basis point to 3.71%.

The jobs report is sure to sway Dow futures, Treasury yields and more ahead of the open, voting for Friday’s market.

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

Jobs Report

The Labor Department will release the December jobs report at 8:30 am ET.

Economists expect to see non-farm payrolls rise by 200,000, up from 263,000 in November. It will be the weakest since December 2020, but still strong. The unemployment rate should remain at 3.7%. Average hourly earnings are expected to rise a strong 5% from a year ago, although down slightly from November’s 5.1%.

Friday’s jobs report will follow a number of hot labor readings this week, from Wednesday’s job openings through Thursday to stronger-than-expected ADP employment data and a drop in jobless claims.

The Federal Reserve wants to see slower job and wage growth to ease inflationary pressures. Fed policymakers have also repeatedly signaled, including in Wednesday’s Fed minutes from the December meeting, concerns that a higher stock and bond rate could undermine their fight against inflation.

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Markets still expect the Fed to slow rate hikes again, with only a quarter-point increase at the Feb. 1 policy meeting. But the odds dropped from 69% to 61% on Wednesday.

Tesla China Price Range

Tesla announced major price cuts for the China market. Tesla lowered the entry price of the Model 3 to 229,900 yuan ($33,454), down 13.5% from 265,900 at the end of October. The base price of the new Model Y is 259,900 ($37,819), down 10% from 288,900 at the end of October. Both are down 18% from before the cut in late October.

Tesla had extended incentives of 10,000 yuan at the beginning of the year. It is unclear if they are still in operation.

On January 2, Tesla reported fourth-quarter deliveries, but they fell short of expectations, while inventories increased. Despite October’s price cuts and big end-of-year stimulus, China’s demand lagged.

One factor is increasing incentives. The Tesla Model 3 is now much closer BYD (BYDDF) Seal, which starts at 225,800 yuan ($32,857). When the BYD Seal first launched, the Model 3 price in China was about $10,000 more.

Tesla stock fell 2.9 percent. That’s after it rose 5.1% on Wednesday from Tuesday’s 12% drop and hit market lows.

Corporate News

Former WWE CEO Vince McMahon, who retired last year amid a sexual assault scandal, plans to return and sell the entertainment company, The Wall Street Journal reported late Thursday. McMahon will name himself and two others to the WWE board, sources told the WSJ.

WWE stock jumped 11% in late trading, rising above the 50-day line and not far from its Nov. 28 peak of 81.63. Shares rose 2.3% to 72.04 on Thursday, up 5.1% for the week as WWE stock retreated from its 50-day line.

Aehr’s income increased 220% compared to a year ago. Fiscal Q2 revenue for the chip testing firm targeting the EV market rose 54% to $14.8 million. AEHR stock rose 14 percent in overnight action. Shares fell 3.55 percent to 17.27 on Thursday, while an early entry also came around. AEHR stock is down 14 percent to start 2023 after falling in the last five weeks of 2022.

Bed Bath & Beyond plans to file for bankruptcy in the coming weeks, The Wall Street Journal reported late Thursday. This comes after the struggling home furnishings retailer issued an “exit” warning on Thursday. BBBY stock fell 8% in overnight action after falling 30% in the regular session.

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


Stock Market Thursday

The stock market’s rally attempt on the drop in jobless claims backfired, closing near session lows.

The Dow Jones Industrial Average fell 1% in Thursday’s stock market trading. The S&P 500 index retreated 1.2%. The Nasdaq Composite fell 1.5%. The small-cap Russell 2000 fell 1.1%.

Microsoft stock lost 3%, a day after the Dow Jones tech giant fell 4.4% as UBS raised concerns about the growth of Azure cloud computing.

UnitedHealth stock, a Dow component like Microsoft, has lost 2.9% since June. Shares are down 7.6 percent to start 2023, falling below the 200-day line. Cigna stock fell 2% after falling below its 50-day line on Tuesday. CI stock is down 8.2% this week.

US crude oil prices rose 1.1% to $73.67 per barrel after falling earlier in 2023.

The 10-year Treasury yield rose 1 basis point to 3.72%. The 10-year yield fell to 3.78% on Thursday morning following the jobless claims data, but hit resistance at the 50-day line. The two-year yield, which is more dependent on Fed policy, rose 6 basis points to 4.45%. The 3-month Treasury rate fell 11 basis points to 4.62%. A very inverse yield curve sends a bearish signal.


Tesla Vs. BYD: THESE GIANTS ARE GOING FOR THE CROWN, BUT WHICH DID THE BEST?


ETFs

Among the best ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.2%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) fell 0.15%. The iShares Expanded Tech-Software Sector ETF ( IGV ) fell 3.2%, with the company MSFT a major holding. VanEck Vectors Semiconductor ETF (SMH) fell 1.8%.

The SPDR S&P Metals & Mining ETF ( XME ) rose 0.5%. The US Global Jets ETF (JETS) rose 1.1 percent. The SPDR S&P Homebuilders ETF ( XHB ) fell 0.75%. The Energy Select SPDR ETF (XLE) advanced 1.8% and the Financial Select SPDR ETF (XLF) gave up 0.75%. The SPDR Health Care Select Sector Fund ( XLV ) fell 1%. UNH Corporation is XLV’s largest shareholder, with Cigna also a significant shareholder.

As more speculative stocks appear, the ARK Innovation ETF ( ARKK ) was down 2.4% and the ARK Genomics ETF ( ARKG ) was down 0.9%. TSLA stock remains the top holding across Ark Invest’s ETFs. Cathie Wood’s stock has increased its Tesla holdings over the past few months.

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The Five Best Chinese Stocks to Watch Now


Market Rally Analysis

After rising modestly to key resistance levels on Wednesday, major indexes retreated on Thursday.

The Dow Jones, which closed nearly above its 21-day and 50-day moving averages on Wednesday, retreated on Thursday. The S&P 500 and Russell 2000 retreated from their 21-day lines, while the Nasdaq also retreated.

Microsoft, Tesla and UnitedHealth stocks were leading the S&P 500, but losses were widening. The Invesco S&P 500 Equal Weight ETF ( RSP ) fell 1%, after rebounding on Wednesday, falling back below its 21-day, 50-day and 200-day lines.

The biotech, industrials, housing, medical product, infrastructure/building product and mining sectors, along with some retail and energy names, continued to show relative strength, with Chinese stocks making a sudden comeback. Many flashed buy signals on Tuesday or Wednesday, but many pulled back or reversed.

A regular market push for the major indexes continues, but has not progressed much. Since the mid-December break from recent highs, the major indexes have been in line, hitting resistance above but not breaking through.

Friday’s jobs report could break this sideways action, triggering a decisive move above – or below – key levels. But even that can be temporary.


Market Timing With IBD’s ETF Market Strategy


What to do now

Prepare, install … and wait.

If you’re dealing with the market and looking for promising setups, it’s hard not to fall into promising stocks because they’re pushing buy signals. In a sustained market rally, it will often succeed. But in a volatile market environment, he was not alone.

It is possible that the December jobs report will trigger a major market upheaval. It can be a signal to buy some stocks – in individual stocks or in the market sector / ETFs – but not to increase significantly.

Despite the tough market conditions, many stocks are showing strength. So get your watch lists ready.

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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