Dow Jones Futures: Markets dive on this reality due to Fed meeting; five stocks holding up

Dow Jones futures will open on Sunday evening with S&P 500 futures and Nasdaq futures, with the Federal Reserve meeting in focus.




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The stock market suffered on some serious earnings reports or warnings, along with a surprisingly hot CPI inflation report last week. Major indices fell below their 50-day moving average and lowered a few more key levels on Friday. Several major stocks also struggled.

It is time for investors to invest less, more and more. Build a watchlist with stocks holding strong relative strength and key levels. Tesla ,TSLA, Enphase Energy ,ENPH, Celsius Holdings ,cellho, wolfspeed ,wolf) And Vertex Pharmaceuticals ,VRTX) all eligible.

Of course, Tesla stock, Enphase, etc. are looking strong right now, but that may not be the case in the coming days. Till last Tuesday, many stocks showed strength. Others looked solid by Thursday or Friday.

WOLF is on stock IBD Leaderboard Watch List Tesla, Enphase and CELH Stocks Are on IBD 50, ENPH are on stock and Vertex IBD Big Cap 20,

fed meeting

The Fed is meeting on September 20-21. In the wake of Tuesday’s consumer price index, which showed strength everywhere outside gasoline, markets strengthened expectations for a third straight Fed rate hike of 75 basis points. (There’s a slim chance of a monster 100-basis-point move.) Investors will focus on what Fed policy signals for the future.

Fed quarterly estimates will indicate where policymakers see the fed funds rate in and out.

Right now, the market is leaning toward another 75-basis-point increase in November, followed by a 25 or 50 basis-point increase in December. This would push the Fed funds target rate to 4%-4.25%, or 4.25%-4.5%, versus expectations of 3.75%-4% before the CPI report.

Fed chief Jerome Powell will give post-meeting remarks at 2:30 p.m. ET. Powell made it clear in his August 26 Jackson Hole speech that the Federal Reserve would not repeat the mistakes of the 1970s by easing policy too quickly.

dow jones futures today

Dow Jones futures open Sunday at 6 p.m. ET, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action dow futures and nowhere else necessarily translates into actual business in the next routine Share Market session.


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stock market last week

The stock market suffered heavy losses last week, making a strong reversal after solid gains on Monday.

The Dow Jones Industrial Average fell 4.1 percent from last week stock market trading, The S&P 500 index lost 4.8 percent. The Nasdaq Composite lost 5.5%. The small-cap Russell 2000 offered a discount of 4.5%.

The 10-year Treasury yield rose 13 basis points to 3.45%, its seventh consecutive weekly gain. At one point on Friday, the 10-year yield stood at 3.483%, exactly matching the 11-year high set on June 14.

US crude oil futures fell 1.9% last week to $85.11 a barrel, a third consecutive weekly decline. Natural gas prices fell 2.7%, but followed a wild week of gains and losses.

ETFs

in the middle Best ETFsThe Innovator IBD 50 ETF (ffty) slid 5% last week, while the Innovator IBD Breakout Opportunities ETF (boxing) left 4.2%. iShares Extended Tech-Software Sector ETF (tub) fell 8.3%. VanEck Vector Semiconductor ETF (smh) left 6%.

SPDR S&P Metals & Mining ETF (XME) dived 10.3% last week. Global X US Infrastructure Development ETF (expansive) 7.5%. US Global Jets ETF (jet) slipped 5%. SPDR S&P Homebuilders ETF (XHB) dropped 6.9%. The Energy Select SPDR ETF (XLE) took up 2.7% and the Financial Select SPDR ETF (45) lost 3.9%. Health Care Select Sector SPDR Fund (xlv) down 2.3%

Reflecting the more speculative story stocks, the ARK Innovation ETF (arkk) fell 4.5% last week and the ARK Genomics ETF (ARKG) 5.3%. Tesla stock is a major holding in Arch Invest’s ETF.


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ENPH Stock

Enphase stock rose 4% to 318.01 last week, continuing to find support on the 21-day rising line. A pullback to the 21-day, perhaps pausing to catch the 50-day line, may provide a safe buying opportunity. Many solar plays still look strong.

Celsius Stock

CELH shares fell 4.9% last week to 100.70, but found support on the 10-week moving average. A move above Thursday’s high of 108.37 could offer an aggressive entry. In a few weeks, Celsius stock may have a fresh base with a buy point of 118.29.

wolf stock

EV-focused chipmaker Wolfspeed rose 5.25% to 120.21 last week, which includes Friday’s 2.8% gain. Investors can consider 123.35 as a buy point from a handle in a long consolidation for WOLF stock.

VRTX Stock

Vertex stock fell 0.9% last week to 289.42, but rose 0.8% on Friday to move above the 21-day, 50-day and 10-week lines. A move above the September 12 high of 296.14 would offer an early entry. It is possible that VRTX stock will have a flat base with 306.05 buy point in few days.

Tesla Stock

Tesla’s stock rose 1.2% last week to 303.35, after gaining 10.9% over the past week. Shares of the EV giant held support at the 200-day moving average.

relative strength line TSLA has improved significantly for the stock. In the past two weeks, it has reached a five-month high. The RS line, the blue line in the chart provided, tracks the performance of the stock versus the S&P 500 Index.

Investors can use a move above Thursday’s high of 309.12 as an aggressive entry or a short-term high of 314.64. It will still be a long way from a traditional buying point.

For all of these stocks, weak market conditions now outweigh any buying risk.


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stock market analysis

The stock market started last week with strong gains on Monday, which now seems like a long time ago. Major indices fell below their 50-day moving average on Tuesday. On Friday, the Nasdaq and S&P 500 closed below their September lows and late July lows, even though they came from intraday lows.

Major indices have now withdrawn more than half of their gains from mid-June to mid-August.

Yes, some major stocks held up, but for every Tesla, Vertex or Celsius, there were a number of quality names that suffered catastrophic losses.

Tuesday’s CPI report not only inflicted serious technical damage on the market, but it weakened the broader bull case. Investors were betting that reports of inflation after at least September would prompt the Fed to start slowing rate hikes. Those hopes have been pushed back.

This is the second time markets have been overly excited about Fed policy. The summer rally was driven in no small part by investors’ expectation of the Fed to end rate hikes soon — and then begin cutting cuts sometime in 2023. Powell’s Jackson Hole speech ended the “Fed Pivot” rate cut.

It’s possible that the Fed’s actual meeting on Wednesday won’t be a big market mover, given how much investors have adjusted over the past three weeks.

Rates are going to be higher, and stay there for an extended period of time. The Fed is ready to put the US into recession to reduce inflation.

Aside from a drop in jobless claims, which only reinforced Fed concerns, recent economic data has been disappointing. A high inflation, high wage, low growth environment is a major challenge for any company.

destructive fedex ,fdx) Earnings & Commentary, Mixed results adobe ,adbe) and warnings Nukor ,NUE) And US Steel ,x) indicates that companies face extended periods of uneven or weak results. Given weakness in Europe and China, as well as a stronger dollar, multinationals and exporters that dominate the S&P 500 may be particularly exposed.


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What should we do now

The condition of the stock market is not good. Macroeconomic conditions are bad. Investors will have to consider whether the market could hit June lows or remain range bound for weeks or months until there is real clarity on the endgame for Fed rate hikes.

Investor exposure should be minimal. There is nothing wrong with having 100% cash, especially if recent trades have gone against you.

Focus on building your watchlist by focusing on stocks that show resilience. If the market remains weak, some of these names will falter, while others will emerge. When market conditions improve, and you are ready to take profits, it is important to have an up-to-date inventory.

Reading big picture Every day to keep pace with market direction and major stocks and sectors.

Please follow Ed Carson on Twitter @ibd_ecarson For stock market updates and much more.

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