S&P 500 Tops Key Level In Market Rally; Riots Hit Apple iPhone Factory In China

Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures. Stocks rebounded on Tuesday, with the S&P 500 retaking the 4,000 level. A major Apple iPhone factory in China faced riots overnight amid Covid restrictions.




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Deere ( DE ) reports early earnings on Wednesday, with DE stock in a buy zone. Deere’s earnings and guidance can be significant for a variety of agricultural stocks, including CF Industries (CF) and Archer-Daniels-Midland (ADM), as well as machine manufacturers such as Mashot (CAT).

Energy companies continue to do well. Solar guide Enphase Energy (ENPH), coal producer Peabody Energy (BTU), refiner CVR Energy (CVI), a natural gas producer EQT Corp. (EQT) and LNG stocks Increase energy (EE) are all close to purchase points.

EE stock is out on Wednesday, with Enphase moving back into buy zone. Stock BTU, CVR Energy and EQT are active.

ENPH stock is on the IBD Leaderboard. EQT stock is on SwingTrader. Deere stock is on the IBD 50. Peabody Energy is IBD’s Tuesday Stock of the Day.

Apple iPhone Factory Riots

Riots broke out overnight at Apple’s biggest iPhone factory in China, as hundreds of workers clashed with security. More than 100,000 workers have been forced to live at the Foxconn campus in Zhengzhou for weeks due to Covid concerns, with many reportedly not being paid during that time.

This comes amid renewed lockdowns and strict restrictions across China as Covid cases rise.

Apple recently warned that Apple iPhone 14 Pro models will be in short supply due to the Foxconn factory in Zhengzhou.

Apple stock rose 1.5% to 150.18 on Tuesday, finding support near its 50-day line but still below its 200-day moving average.

Dow Jones Futures Today

Dow Jones futures were flat against equity. S&P 500 futures were little changed. The Nasdaq 100 futures fell 0.15%.

Crude oil futures are little changed. The price of natural gas increased by 4%.

The Central Bank of New Zealand, as expected, raised rates by 75 basis points.

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The Fed’s minutes from the November meeting will be released on Wednesday.

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

Stocks opened mixed on Tuesday but recovered for broad gains, closing near session highs.

The Dow Jones Industrial Average rose 1.2% in Tuesday’s stock market trading. The S&P 500 index and the Nasdaq composite both rose 1.4 percent. The small-cap Russell 2000 rose 1.1%.

The 10-year Treasury yield fell 7 basis points to 3.76%. But the two-year Treasury yield, which is more closely tied to Fed policy, was flat at 4.53%.

The dollar, after rising for the previous three sessions, retreated on Wednesday. The green circle has dropped significantly since the end of September, especially since the beginning of November.

US crude oil prices rose 1.1% to $80.95 a barrel, continuing to bounce back from Monday’s short-term lows. Gasoline futures rose 4.3%, good news for refiners. Natural gas futures rose after falling more than 2% during the day.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 3.4 percent, helped by a number of energy and metals stocks. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.8%. VanEck Vectors Semiconductor ETF ( SMH ) rose 2.9%.

The SPDR S&P Metals & Mining ETF (XME) gained 3.2%, and the US Infrastructure Development ETF X Global (PAVE) closed on 1.3%. The SPDR S&P Homebuilders ETF (XHB) rose 1.9 percent. The Energy Select SPDR ETF (XLE) climbed 3.1%. The Health Care Select Sector Fund SPDR ( XLV ) rose 0.9 percent to a seven-month high.

Highlighting stocks with more speculative stories, ARK Innovation ( ARKK ) posted a 0.3% gain and ARK Genomics ( ARKG ) fell 0.4%.


The Five Best Chinese Stocks to Watch Now


Energy Stocks Near Points of Purchase

Enphase stock rose 4% to 320.44, closing above the 316.97 cash-in-hand buy point for the first time. However, the last three times ENPH stock rose in these areas, it fell in reverse. Enphase stock may have large daily fluctuations. So investors can look to see if ENPH stock moves back to its 21-day moving average.

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Some other LNG stocks are showing strength, with Flex LNG (FLNG) broke and Cheniere Energy (LNG) retraces its 50-day line.

BTU stock climbed 6.7 percent to 29.62, just below a 30.15 buy point in a seven-month rally. Tuesday’s move broke the wrist’s trend line, offering an early entry. However, BTU stock is 9.3% above its 21-day line and 17% above its 50-day. The deal came after strong earnings from Peabody Energy.

CVR Energy stock rose 4.85% to 40.85, returning above an old buy point of 39.81 that is still seen as valid. Meanwhile, CVI stock has a tight three-week high with a 42.31 entry. Above 41.31 may offer an early entry into that tight pattern.

EQT stock jumped nearly 6% to 43.79, after breaking above the 200-day on Monday, back above the 50-day line. Shares break a downward trend. The official buy point is 52.07.

EE stock rose 9.6 percent to 30, clearing a buy point of 28.49 a cup-per-hand in average volume, according to MarketSmith analysis. The move to a record close cleared much of the trading going back to Excelerate Energy’s April IPO. EE stock had highlighted early entries on Friday and Monday, although trading was below normal on those days. Excelerate is now slightly extended from the buy zone and well above the 21-day line.

Market Rally Analysis

The stock market continues to show constructive activity, trading in a tight range after last week’s pullback and modest support. On Tuesday, major indexes bounced back from Monday’s losses.

The S&P 500 bounced back from its 10-day line, right at the 4,000 level, as it moves toward its 200-day line. While not above the Nov. 15 intraday high, it was the index’s best close in more than two months.

The line is 50 days justice is starting to move higher on the S&P 500.

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The Russell 2000 is getting very close to its 200-day mark. The S&P MidCap 400, which closed its 200-day line last week, made further gains.

The leading Dow Jones fell below the August 16 peak of 34,000 for the first time in three months. The trailing Nasdaq found support at its 21-day line, just above the 50-day, but recouped all of Monday’s losses.

All of these indexes are working hand in hand, with the Dow hovering above. Most stocks track the action of the major indexes, so many hands on stocks are forming close to buy points. A slightly longer pause, perhaps until key economic reports at the end of next week, will allow the moving averages to resume.


Market Timing With IBD’s ETF Market Strategy


What to do now

Until the S&P 500 cuts decisively above its 200-day line, investors may not want to add too much exposure right now. With the Thanksgiving holiday trade quiet and critical economic data from the Fed next week, the market may be bearish in the short term.

It can help stocks from various sectors to establish arms and gain moving averages. Investors should build their own watch lists. It’s definitely time to look outside of traditional tech growth stocks, which are currently mostly behind.

Since many leads are extended from moving averages, such as Excelerate Energy or BTU stock, it is more important to look for early listings and act quickly.

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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