Tuesday, January 18, 2022

Futures higher ahead of Powell confirmation hearing

The Dow Jones Industrial Average dropped 280 points on Tuesday ahead of a confirmation hearing from Fed chief Jerome Powell. Tesla stock fell despite strong China sales, while rival Rivian fell short of its 2021 production target. Illumina and Juniper Networks outpaced the S&P 500, and Intel shares rose with major executive changes.


Among the leaders of the Dow Jones, Apple (AAPL) rose 0.2% on Tuesday, while Microsoft (MSFT) went down 1.2% in today’s stock market. Even in the Dow 30, the financial leader Goldman Sachs (GS) and JPMorgan Chase (JPM) is nearing new buying points.

Intel (INTC) jumped 1.1%, leading the Dow, after announcing it had lured Micron Technology (MU) Chief Financial Officer David Zinsner will become Intel’s new CFO, effective Jan. 17.

electric-vehicle leader Tesla (TSLA) data from the China Passenger Car Association showed the company posted record sales in December, followed by trading down nearly 1%. ev truck rival, rivian (RIVN), dropped 3%. Lucid Group (LCID) up 1%. and Chinese EV leader lee auto (LI) and Xpeng Motors (XPEV) Tuesday morning were higher.

In Tuesday’s top stocks to buy and watch, commercial metal (CMC), Diamondback Energy (Fang), SVB Financial (SIVB) and Wells Fargo (WFC) in or near new procurement areas.

Microsoft and Tesla are IBD leaderboard stocks. Commercial Metals and SVB Financial appeared in this week’s Stocks Near a Buy Zone column.

Dow Jones Today: Powell Hearing, Treasury Yields

After the stock market opened on Tuesday, the Dow Jones Industrial Average was down 0.8%, while the S&P 500 dropped 0.6%. The tech-heavy Nasdaq Composite lost 0.7% in morning trading.

Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.4% and the SPDR S&P 500 ETF (SPY) was trading down 0.1% on Tuesday.

The 10-year Treasury yield eased to 1.77% on Tuesday morning. On Monday, the 10-year Treasury yield traded as high as 1.8% before ending at 1.78% – its highest level since January 17, 2020.

Later this morning, Federal Reserve Chairman Jerome Powell will face questions at his Senate confirmation hearing. Powell is expected to win a second term as head of the central bank.

Stock Market ETF Strategy and How to Invest

stock market rally weak

The stock market took some positive action on Monday as the Nasdaq broke a four-day losing streak and found support at its longer-term 200-day line. The S&P 500 dropped for the sixth consecutive session, leaving its key 50-day support level. However, it closed sharply from its lower level. The Dow Jones Industrials halted Monday’s slide around the 50-day line.

Monday’s The Big Picture commented: “The stock market now needs to show that it can follow Monday’s reversal with more gains. However, it could be a tough week to rally. In play With so many variables, it would be good for investors to remain cautious. IBD’s stock market outlook is ‘upward under pressure’, and investing in growth stocks has been as tough as Blizzard.”

After Monday’s stock market action, this is an important time to read The Big Picture of IBD.

The Five Best Dow Jones Stocks to Watch Right Now

Stocks on the Move: CVS, IBM

CVS Health (CVS) rose 1.9% on Tuesday after the company raised its full-year earnings outlook. CVS stock ended Monday up about 16% from a flat base of 90.71 buy points.

Illumina (ILMN) was up 9% after updating its fourth-quarter guidance during the JPMorgan Healthcare conference late Monday. American Airlines (AAL) also updated its revenue and capacity outlook, and received an upgrade from Morgan Stanley.

juniper network (JNPR) about 4% and Las Vegas Sands (LVS) both jumped 5% after the analyst upgrade.

ibm (IBM) slid nearly 4% Tuesday morning after UBS downgraded the stock to sell from neutral. Shares are tracing a double bottom with 146.10 buy point, but the stock has a weak relative strength line.

Buy and View Dow Jones Stocks: Goldman Sachs, JP Morgan

Shares of the Dow Jones Goldman Sachs rose 0.4% on Monday, ending just above the 50-day line. As per IBD MarketSmith chart analysis, the stock is tracing a flat base with a buy point of 426.26. An early entry at 412.76 is also in play. The stock fell 0.3% on Tuesday.

JPMorgan showed 173.06 buy points in a flat base after retracing the 50-day line in a rally of 5.6% last week. Shares fell 0.2% on Tuesday.

Three Top Growth Stocks to Watch for in the Current Stock Market Rally

Stocks to buy and watch: Commercial Metals, Diamondback, SVB Financial, Wells Fargo

According to IBD MarketSmith chart analysis, IBD 50 stock Commercial Metals is trying to gain 36.96 buy points from a one-cup basis, although it lost 0.6% on Monday. Early Monday, the company posted fiscal first-quarter earnings, which slashed estimates as strong margins helped offset lighter revenue. Shares remained flat on Tuesday.

Oil producer Diamondback Energy is just above 117.81 buying points, after falling 0.1% on Monday. The 5% buy zone tops out at 123.70. Bullishly, the stock’s RS line reached a new high on the day of the breakout, confirming Energy Stock as the market leader. Diamondback stock has a 99 IBD overall rating, as per the IBD stock checkup. Shares were up 0.2% on Tuesday.

SVB Financial is tracking a Cup base with a buy point of 763.32. Stocks may rise this week, but it is too early to be considered fair. If the handle expires, the new buy point will be 746.80. Shares fell 3% on Monday, closing on their 50-day moving average line. Shares were up 0.3% on Tuesday.

Banking giant Wells Fargo is ahead of a 5% buying limit, above 52.67 buying points in a flat basis after Monday’s 1.1% rise. The 5% buying zone moved up to 55.30. Shares rose on Tuesday.

Join IBD experts as they analyze key stocks in the current stock market rally on IBD Live

EV Stocks: Lee Auto, Xpeng, Lucid Motors, Rivian

Lee Auto’s stock broke below its 200-day moving average during Monday’s 5.6% skid. There are no new buy points at the moment and the stock is down about 30% from its 52-week high. Shares rose 2% on Tuesday.

Xpeng Motors declined 5.4% on Monday and is again trying to find support around its 200-day line. Shares were forming a cup with handles, but that formation is now gone. Shares were up 2.2% on Tuesday.

Among US-based EV stocks, Lucid Motors shares climbed 1% on Tuesday. In a cup-with-handle basis, LCID stock has edged up above the 28.49 buy point, but has curtailed huge gains. Shares are again attempting to regain their 50-day line this week, which will be bullish for the stock’s base-building prospects.

Rivian’s recent initial public offering was down 3% on Tuesday, threatening to extend Monday’s 5.6% drop and losing streak to seven sessions that saw the stock hit an all-time low. Late Monday, the company said it produced 1,015 vehicles in 2021, missing its target of making 1,200 electric vehicles.

Shares of RIVN closed down nearly 55% from its post-IPO highs on Monday. Continue to wait for the IPO base to form before considering a purchase. The recent sharp losses are a significant setback in the stock’s base process and there are no new buy points with the stock at new lows.

Tesla Stock

Tesla stock rose 3% on Monday, breaking a four-day losing streak. Early Tuesday, Tesla shares fell about 1% after the China Passenger Car Association said Tesla sold 70,847 electric vehicles in China in December, a 34% increase month over month. Last week, the EV leader abandoned its crucial 50-day moving average line and triggered a 7%-8% loss-cutting sell rule from the 1,119.10 trend line buy point.

Shares traded as high as 1,243.49 on November 4, but on Monday the stock lost nearly 15% from its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones shares, Apple stock barely edged higher after hitting its lowest level since December 20. According to IBD MarketSmith chart analysis, the stock is up about 12% from a cup-with-handles basis at 153.27 buy points. Hitting level taking 20%-25% profit. Shares were up 0.1% on Tuesday.

Software leader Microsoft rose 0.1%, recovering from sharp losses. The top Dow Jones stock continues to form a flat base with a 349.77 buy point, but the stock clearly has more work to do before a potential breakout. Shares fell 1.2% on Tuesday.

Be sure to follow Scott Lehton on Twitter @IBD_SLehtonen For more information on growth stocks and the Dow Jones Industrial Average.

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