Dow Jones futures, including S&P 500 futures and Nasdaq futures, declined on Wednesday morning. Target (TGT) Missed a big earnings early Wednesday, a day later Walmart (WMT) did the same. The 10-year Treasury yield has returned about 3%.
Among the several bullish factors was the strong gains in the new stock market rally on Tuesday. Fed chief Jerome Powell said policymakers should look at “clear and credible evidence” of cooling inflation before slowing the Fed’s rate hike, but said a “soft landing” for the US economy was commendable.
Broadcom (AVGO) An offensive entry flash on Tuesday, when Eli Lily (LLY) remains workable. On the downside, Dollar tree (DLTR) has humbly returned below its 50-day line Walmart Inflationary pressures hitting discount giants on various fronts (WMT) fell 11% on weaker-than-expected Q1 earnings. DLTR stocks fell early on Wednesday due to a big mistake on target.
Meanwhile, Elon Musk Twitter (TWTR) The story continues, with Tesla (TSLA) CEO says the deal “cannot go ahead” without further clarification on bot accounts, even urging the Securities and Exchange Commission to take action. The social site says it is committed to the original terms Tesla stock rebounded on Tuesday. TWTR stock has risen 2.5% since sinking in recent days, well below the proposed $ 54.20 takeover price.
Early Wednesday, the goal and ZIM Integrated Shipping (ZIM) will report income.
Target earnings came in at 2.19 per share, much lower than the 3.07 per share view. Sales rose 4% to 25.17 billion, beating slightly. Discount giants have blamed shipping costs, high markdowns and poor sales of TVs and other big-ticket items.
The target stock crashed 24% early Wednesday to reach 163, indicating at least a 52-week low. It fell 1.4% on Tuesday, in sympathy with Walmart stocks. Target stock is at cup-with-handle base with 254.97 buy points. WMT stock sank 2% after falling 11% on Tuesday.
ZIM’s earnings rose 177% to $ 14.19 a share, adjusting for a comfortable view. Overseas container shipping play also raised its full-year EBITDA target and declared a 2.85 dividend per share. ZIM stock rose 6% to 69 at the start of Wednesday. Shares are trading at 79.05 buy points from the cup base. But the stock may have an early entry from near its 50-day line and short-term resistance on Wednesday. On Tuesday, ZIM reversed a 1.7% fall, as peer-to-peer container shipping play Danaos (DAC) retreated late Monday despite upsetting outlook.
AVGO stock and Eli Lily are on IBD Leaderboard and SwingTrader. LLY stock is in IBD 50. Broadcom was the IBD stock of the day.
The video embedded in the article discusses Tuesday’s market action and analyzes Broadcom, Eli Lilly and DLTR stocks.
Fed Chief Powell
Fed chief Jerome Powell says he is focused on reducing inflation. He noted that the financial situation has already improved, but said that he would like to see “clear and credible evidence” that inflationary pressures are easing before the Fed slows. He said this is not the time for a “brief” reading of inflation. Powell said there could be some “pain” involved in reducing inflation. But he hopes the labor market will remain strong and says a “soft landing” is still possible. Last week, Powell said the recession could be inevitable.
In the end, the Fed chief Powell recaptured earlier statements and themes and did not indicate new changes or moves in monetary policy.
Dow Jones Future Today
The Dow Jones futures fell 0.6% vs. fair price. The S&P 500 futures are down 0.8% and the Nasdaq 100 futures are down 1.2%. Futures have deteriorated significantly since the big target income was missed.
The 10-year Treasury yield rose 2 basis points to 2.99%, briefly after hitting the 3% level.
U.S. crude oil prices rose more than 2%.
Keep in mind that overnight action in Dow Futures and elsewhere does not necessarily translate into actual trading at the next regular stock market session.
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Stock market rally
The stock market rally started strong on Tuesday, retreated several times but then strengthened again, with remarks by Fed chief Powell.
There were several drivers in the market on Tuesday. Chinese stock lockdown has rallied on loose and solid JD.com (JD) Earnings Outcome. US retail sales were strong, with Home Depot (HD) Results are also positive, although Walmart’s large earnings miss out on inflationary pressures, stimulus decreases. United Airlines (UAL) has raised key revenue targets, indicating strong demand for the travel industry.
The Dow Jones Industrial Average rose 1.3% in Tuesday’s stock market trading. The S&P 500 index has popped up 2%. The Nasdaq Composite jumped 2.8%. Small-cap Russell 2000 jumps 3.1%
US crude fell 1.6% to 2 112.40 a barrel. Gasoline futures have also retreated.
The 10-year Treasury yield jumped 9 basis points to 2.97%, but the Fed did not make much headway over Chief Powell.
Among the best ETFs, the Innovative IBD 50 ETF (FFTY) increased by 2.45%, while the Inventive IBD Breakout Opportunity ETF (BOUT) decreased by 1 cent. iShares Extended Tech-Software Sector ETF (IGV) grew 1.75%. Vanek Vector Semiconductor ETF (SMH) jumped 4.8%, with AVGO stock holding a significant SMH holding.
SPDR S&P Metals & Mining ETF (XME) rebounded 4.25% and Global X US Infrastructure Development ETF (PAVE) added 2.7%. US Global Jets ETF (JETS) rose 5.7%. SPDR S&P Homebuilders ETF (XHB) rose 2.7%. Energy Select SPDR ETF (XLE) increased by 1.2% and Financial Select SPDR ETF (XLF) by 2.7%. Healthcare Select Sector SPDR Fund (XLV) rose 1.4%, with LLY stock holding a significant holding.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) popped 5% and ARK Genomics ETF (ARKG) 4.7%. Tesla Stock is the No. 1 holding in the ETF of Arc Invest
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Broadcom stocks rose 4.4% to 608.15, moved above the 50-day line and broke a trendline, offering an early entry. According to MarketSmith’s analysis, the chip giant is working from a cup-with-handle buy point to the official 645.41 buy point. The relative strength line of AVGO stock is already at a new high The RS line, the blue line of the given chart, tracks the performance of the S&P 500 Index vs. the stock.
Eli Lilly stock rose 0.7% to 301.48 after finding support on its 21-day and 10-week lines. On Monday, LLY stocks closed those levels as the FDA fixed a diabetes drug that is seen as a blockbuster obesity fighter. The stock session closed higher but Lily was still up 2.7% on Monday. The pharmaceutical manufacturer has 314.10 buy points from a flat base as part of the base-on-base pattern.
Dollar tree stock
DLTR stocks fell 3.2% to 156.35 on Tuesday, hitting a six-week low below the 50-day line. The dollar tree stock may be effective if it moves above its 50-day and 21-day lines, which coincides with a trendline break. The stock is working on a potential new foundation. The dollar tree income is due May 26.
But early Wednesday, DLTR stocks fell 5% as Target joined Walmart with a big earnings miss.
Elon Musk-Twitter Saga
Musk said the Twitter takeover could not proceed unless management provided more clarity on how many users had fake accounts. Twitter says it has provided an estimate of its honesty and that it is in line with Mask’s $ 54.20 takeover price. Musk seems to want to get out of the deal, or at least want to negotiate a much lower price tag. He even called on the SEC to investigate Twitter after years of mocking the Watchdog agency.
Meanwhile, Twitter documents revealed that Musk had released a late 9.1% “passive” TWTR stock share before discussing a buyout with his board. Towards the end of Tuesday, Twitter’s board said it wanted to “apply” the mask takeover.
Experts say Musk may fight to get out of the Twitter deal, but any legal battle could theoretically last for years. Twitter may want to settle and move on. But the Twitter story has been a headline for TSLA stocks, a significant blow to Musk’s huge wealth and portfolio of his many enthusiastic supporters.
Tesla stock rose 5.1% to 761.61 on Tuesday, rebounding from the worst close since the end of August. Twitter stock rose 2.4% to 38.28, closing a seven-day sell-off
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Market assembly analysis
Major indicators have risen with the explosion of volume on Tuesday morning. During Powell’s midday lectures the main indexes returned significantly in the middle and modestly, but both times returned to the best of the day.
The key indicators have all shown strong gains, especially the Nasdaq and the S&P 500. NYSE and Nasdaq volumes increased slightly compared to the previous session.
This is an important day to read The Big Picture to keep abreast of market trends.
Energy continues to be the stock market leader. Fertilizer plays are trying to reclaim a leadership role. Some pharmaceutical manufacturers, such as LLY stocks, are in a better position.
The chipmakers had a good session, but the AVGO stock stood out as effective. Tech stock usually requires a lot of repair work.
Several sectors may be committed to further market gains.
Market time with IBD’s ETF Market Strategy
What to do now
The rally rally in Tuesday’s session showed strength. But major indicators have only recovered the 10-day moving average. There are still some distances to reach the 21-day Index Moving Average, long distances to reach the 50-day and 200-day lines, skip all the time levels.
Investors can add some exposure through leading stocks or broad-market ETFs. But don’t rush, and get ready to come back. The current market could quickly evaporate or run for a few weeks up to the 50-day line before retreating, as key indicators did in late March.
Investors should work on their watchlist. Look for stocks with strong relative strengths, especially those that are close to potential entries.
Please follow Ed Carson on Twitter IBD_ECarson For stock market updates and much more.
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