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Dow Jones Futures: Nasdaq Breaks Key Level, Apple Dives; Here’s The Silver Lining

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Dow Jones futures were little changed in after-hours trade, along with S&P 500 futures and Nasdaq futures. Software giant Adobe rose late on an earnings beat, while big Cathie Wood holding Exact Sciences (EXAS) skyrocketed on a rival’s clinical trial.




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The stock market rally suffered damaging losses Thursday, with the major indexes breaking below key levels to one-month lows.

Blame a second-day reaction to the hawkish Fed rate hike outlook, weak U.S. and China economic data, various corporate news for Netflix (NFLX) and Nucor (NUE) and a bearish analyst call for Nvidia (NVDA).

Leading stocks, including from the industrial, infrastructure, chip and solar sectors, fell back modestly and sometimes sharply.

But the dark clouds do contain a silver lining: The market is no longer tempting investors into taking new positions.

Apple (AAPL) suffered its worst one-day loss since late September, while Amazon.com (AMZN) is nearing its bear market bottom. Microsoft (MSFT) pulled back, but to a key support area. Nvidia stock fell back below its 200-day line on a grim day for chip stocks.

Tesla (TSLA) did hit a fresh bear-market low Thursday, but closed slightly higher. Elon Musk disclosed yet another round of Tesla stock sales late Wednesday.

Earnings, Other News

Adobe (ADBE) reported better-than-expected Q4 2022 earnings late Thursday on in-line revenue growth. The business software giant guided slightly lower on fiscal Q1 revenue, but up on earnings. ADBE stock popped more than 4% after hours. Shares closed down 3.3% to 328.71. Adobe stock has rebounded from late September lows, but is still well below its 200-day line.

Guardant Health (GH) reported key results for its blood test for colorectal cancer in average-risk adults. While Guardant Health noted the results were high enough to win Medicare reimbursement, GH stock crashed 35%. Meanwhile, EXAS stock shot up more than 20%. Exact Sciences makes Cologuard, a stool-based DNA test for colorectal cancer.

Global IT and consulting giant Accenture (ACN) reports early Friday. ACN stock closed down 3.4%, but found support at its 50-day line, a day after falling back below its 200-day.

Darden Restaurants (DRI) earnings also are due Friday morning. DRI stock dipped 0.7% to 142.95 on Thursday, but rebounded from near its 50-day line. The Olive Garden parent has a 149.90 buy point from a cup-with-handle base.

Dow Jones Futures Today

Dow Jones futures were flat vs. fair value. S&P 500 futures and Nasdaq 100 futures edged lower.

The 10-year Treasury yield rose 1 basis point to 3.46%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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

Stock Market Rally

The stock market rally sold off sharply Thursday.

Before the open, November retail sales showed an unexpected 0.6% decline. The Philly Fed and New York Fed regional surveys for December also pointed to contraction. But jobless claims declined significantly, exactly what the Fed doesn’t want to see.

That’s all followed weaker-than-expected Chinese industrial production and retail sales figures. Fast-easing Covid restrictions may offer a boost, but China is likely beginning a massive wave of infections that could deter activity.

The Dow Jones Industrial Average sank 2.3% in Thursday’s stock market trading, its worst performance in three months. The S&P 500 index slumped 3.2%. The Nasdaq composite tumbled 3.5%. The small-cap Russell 2000 skidded 2.5%.

U.S. crude oil prices retreated 1.5% to $76.11 a barrel. Gasoline futures slumped 3.5%. Natural gas prices leapt 8.4%.

The 10-year Treasury yield fell 5 basis points to 3.45%, just a bit from last week’s three-month low of 3.4%. But that likely reflects recession fears more than easing inflation. The two-year Treasury yield, more closely tied to Fed policy, was little changed Thursday. The two-year yield is down sharply since early November.

Why This IBD Tool Simplifies The Search For Top Stocks

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) slumped 3.5%, with MSFT stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) tumbled 3.8%, back below its 200-day line. NVDA stock is a big SMH component.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sold off 4.9%, just above November’s five-year low. ARK Genomics ETF (ARKG) retreated 3.5% to a six-month closing low. Tesla stock is a major holding across Ark Invest ETFS. Cathie Wood added to Ark’s overall TSLA stake on Wednesday. EXAS stock also is a top 10 Ark Invest holding.

SPDR S&P Metals & Mining ETF (XME) gave up nearly 4%. U.S. Global Jets ETF (JETS) descended 2.55%. SPDR S&P Homebuilders ETF (XHB) edged down 0.6%, with some strong performers. The Energy Select SPDR ETF (XLE) dipped 0.6%. The Health Care Select Sector SPDR Fund (XLV) gave up 1.8%

Five Best Chinese Stocks To Watch Now

Megacap Stocks

Apple stock tumbled 4.7% to 136.60, its worst one-day loss since Sept. 29. Shares are close to their October-November lows, with the June bear-market low of 129.04 not much further.

AMZN stock sank 3.4% to 88.45. That’s approaching the Nov. 9 bear-market low of 85.87.

Microsoft stock retreated 3.2% to 249.01, but found support at its 21-day line. Shares had tested the 200-day line in the prior two sessions.

Nvidia stock fell back 4.1% to 169.52, tumbling below its 200-day line after retaking that key level on Monday. HSBC initiated Nvidia stock with a reduce rating and a 136 price target. The Nvidia sell-off, as well as a Western Digital (WDC) downgrade, helped lead a chip sell-off.

Tesla stock dipped Thursday morning to a fresh two-year low of 153.28 before rebounding to close up 0.5% at 157.67. Shares are still down 12% this week. Late Wednesday, CEO Elon Musk disclosed selling 22 million TSLA shares on Dec. 12-14 for $3.6 billion, adding to Tesla investors’ frustrations. But, that likely means Musk’s latest selling is over.

Meanwhile, Tesla is offering 10,000 free Supercharger miles for anyone buying a Model 3 or Y in the U.S. before year-end, on top of a $3,750 discount. Tesla is encouraging people to take delivery now, boosting Q4 figures, rather than wait for Jan. 1 for new EV tax credits.

Tesla Vs. BYD: Which EV Giant Is The Better Buy?

Market Rally Analysis

The stock market rally had a clear-cut bad day. The Nasdaq composite and Russell 2000 tumbled below their 50-day moving averages for the first time in just over a month. The S&P 500, which had been hitting resistance at the 200-day line, gapped below the 21-day line. The Dow Jones also is well below its 21-day, heading toward its 50-day and 200-day lines.

All the major indexes are at their lowest levels since Nov. 10, when they gapped up on the October consumer price index. The Nasdaq is about where it was on the Oct. 21 follow-through day.

Most leading stocks came under pressure, some finding support and others not. There were a few winners, such as Lennar (LEN) and Nordson (NDSN) on earnings, but those are the exception.

Megacap stocks such as Apple, Amazon and Tesla are in serious trouble. Microsoft’s 200-day line resistance isn’t a good sign. Nvidia stock and the VanEck Semiconductors ETF falling below the 200-day line is definitely discouraging.

Is the market uptrend, from the Oct. 13 low to the Dec. 13 high, just a bear market rally coming to a close? It’s too soon to say. It’s also possible that the market will rebound, or now trade in a sideways manner.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

A choppy market rally is dangerous because it lures investors into stocks that are flashing buy signals, then immediately reverses lower.

But let’s say you bought on relative weakness in the market, such as pullbacks to the 21-day line, over the past few weeks? Well, the indexes are all undercutting their recent lows. So even those trades are likely struggling unless you took quick profits.

Investors should probably be reducing exposure, if only because individual stocks aren’t working.

The silver lining? Few stocks are flashing buy signals while the market is clearly weakening. It’s easier to stay out in that environment.

But stay engaged. A couple good days could revive the market rally and buoy stocks back into buy areas. So run your screens and update your watchlists. Look for stocks holding key support levels, such as the 21-day or 50-day lines. Some big recent winners are now pulling back to the 50-day/10-week lines.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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The 200-Day Average: The Last Line Of Support?



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Business

Dow Jones Dives On Fear Of More Rate Hikes Into 2023; Tesla Stock Plunges

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Dow Jones futures were higher ahead of Tuesday’s open after the Dow Jones Industrial Average sold off more than 480 points Monday. Tesla stock dived after multiple reports said Tesla is planning to cut its EV production in China, as demand seems to be faltering.




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The EV giant refuted the reports, calling the claims that it’s cutting its China production untrue. Still, investors left the stock down more than 6% and near the day’s lows.

More Fed Rate Hikes Into 2023?

The stock market headed south Monday, as stronger-than-expected economic data sparked fears that the Federal Reserve will continue to aggressively raise interest rates into next year due to a strong labor market. Early Monday, the ISM services report came in better than expected, with a 56.5 reading in November vs. a 54.4 in October. The ISM services is a barometer of U.S. business conditions in the service sector; a reading above 50 indicates expansion and a sub-50 reading is contraction.

Monday’s economic data came directly on the heels of Friday’s strong jobs report that showed employers added 263,000 payroll positions while the unemployment rate held at 3.7% and wages jumped.

According to Nick Timiraos at the Wall Street Journal, “Federal Reserve officials have signaled plans to raise their benchmark interest rate by 0.5 percentage points at their meeting next week, but elevated wage pressures could lead them to continue lifting it to higher levels than investors currently expect.”

Timiraos continued, “policymakers expect price pressures to ease meaningfully next year, but brisk wage growth or higher inflation in labor-intensive service sectors of the economy could lead more of them to support raising their benchmark rate next year above the 5% currently anticipated by investors.”

The 10-year Treasury yield jumped to 3.59% Monday, rebounding from last week’s sharp losses.

Earnings reports this week include Academy Sports + Outdoors (ASO), AutoZone (AZO), Broadcom (AVGO), Ciena (CIEN), Lululemon Athletica (LULU), Ollie’s Bargain Outlet (OLLI) and Toll Brothers (TOL).

Stock Market Today

On Monday, the Dow Jones Industrial Average lost 1.4%, or 482 points, and the S&P 500 dropped 1.8%. The tech-heavy Nasdaq composite sold off 1.9%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 1.7% and the SPDR S&P 500 (SPY) fell 1.8%.

Electric vehicle giant Tesla (TSLA) traded down 6.4% Monday. Among Dow Jones stocks, Apple (AAPL) declined 0.8% and Microsoft (MSFT) dropped 1.2% in today’s stock market.

Celsius (CELH), Chubb (CB), Dexcom (DXCM) and KLA (KLAC)— as well as Dow Jones names Caterpillar (CAT), Chevron (CVX) and Home Depot (HD) — are among the top stocks to buy and watch.

Dexcom is an IBD Leaderboard stock. Caterpillar and Home Depot were featured in this week’s Stocks Near A Buy Zone column. Celsius was a recent IBD 50 Stocks To Watch pick and a New America stock. Caterpillar was Thursday’s Stock Of The Day.

4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally

Dow Jones Futures Today: Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures rose 0.2% vs. fair value, while S&P 500 futures gained 0.25%. The tech-heavy Nasdaq 100 futures were up 0.3% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

U.S. oil prices reversed from early gains to fall more than 3%. West Texas Intermediate futures traded just above $77 a barrel. Crude oil prices initially rose after the European Union sanctions on Russian crude oil went into full effect.

IBD’s latest newsletter, MarketDiem, gives you actionable ideas for stocks, options and crypto right in your inbox.

What To Do In The Stock Market Rally

Now is an important time to read IBD’s The Big Picture column with the stock market trend back in a “confirmed uptrend.”

While it’s certainly true that the S&P 500 and Nasdaq composite are still in confirmed uptrends, the crop of actionable stocks has been disappointing. It hasn’t been easy increasing exposure.

When it comes to new buys, what kind of feedback are you getting? Are new buys making progress from buy points? In this case, it’s OK to give them some room. But don’t be afraid to take partial profits if a gain hits at least 10%. If new buys go the wrong way, cut losses when the stock is 3% to 4% down, instead of waiting for the 7% rule to trigger.

Light, flexible trading is the best course of action for now. If the uptrend starts to gain traction again, there will be plenty of opportunities to increase exposure. And don’t be afraid to look for early entries, rather than waiting for a stock to hit a conventional buy point.

(Check out IBD Stock Lists like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.)

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Caterpillar, Chevron, Home Depot

Dow Jones member Caterpillar is close to retaking its cup base’s 238 buy point, according to IBD MarketSmith pattern recognition, and is about 2% below the entry. CAT stock fell 1.5% Monday.

CAT stock boasts a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.

Energy giant Chevron fell 2.5% Monday, falling further below its 182.50 buy point in a consolidation base.

Home improvement retailer Home Depot ended Monday about 4% below a cup base’s 333.08 buy point following the stock’s 2.4% decline.

Top Stocks To Buy And Watch: Celsius, Chubb, Dexcom, KLA

Energy-drink maker Celsius dropped 3.5% Monday, snapping a three-day win streak. Shares are trying to break out past a cup base’s 118.29 buy point, but are about 4% below the entry, according to IBD MarketSmith pattern recognition.

Insurance giant Chubb is trading just below a cup-with-handle’s 216.10 buy point Monday after the session’s 1.7% loss. The 5% buy area tops out at 226.91.

IBD Leaderboard stock Dexcom is approaching an alternate entry at 123.46 despite Monday’s 1.3% fall. Shares are about 5% away from their latest buy point.

New IBD Long-Term Leader KLA continues to hold just below a cup-with-handle’s 392.60 buy point amid a three-day losing streak, as shares dipped 0.25% Monday. The RS line continues to hold right at new highs, a sign of stock market leadership.

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

Tesla Stock

Tesla stock skidded 6.4% Monday, snapping a three-day win streak and giving up the entirety of last week’s gains.

In recent weeks, the stock hit its lowest level since Nov. 23, 2020, reaching a new 52-week low price at 166.19. Since then, the stock has rebounded but remains sharply below its 50- and 200-day moving average lines. Shares are around 55% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares declined 0.8% Monday, but are still holding above their 50-day line. The stock is more than 20% off its 52-week high.

Microsoft faltered 1.2% Monday, as shares continue to hold above the 50-day line. The software giant remains about 27% off its 52-week high.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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Business

Dow Jones Dives Nearly 500 Points On China Covid Protests, Fed Official Comments

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Dow Jones futures were higher ahead of Tuesday’s open after the Dow Jones Industrial Average sold off nearly 500 points Monday. Investors will soon shift their attention to Fed Chair Jerome Powell’s Wednesday speech, while key inflation data is due out Thursday.




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Monday’s stock market weakness was due to a combination of the spreading Covid-19 protests in major cities in China and St. Louis Federal Reserve President Jim Bullard’s comments on interest rates.

In a webcast interview with MarketWatch, Bullard responded to a question about how long he expects the Fed funds rate to stay in the 5% to 7% range, saying “I think we’ll have to stay there all during 2023 and into 2024.”

Bullard believes that markets are still underestimating the degree to which the Fed will need to keep policy tight in order to rein in inflation. Traders place a 72% chance of a 50 basis-point rate hike, down from 80% one week ago, in the central bank’s upcoming meeting, according to the CME’s FedWatch Tool.

Earnings reports this week include CrowdStrike (CRWD), Dollar General (DG) and Intuit (INTU). Also included is Dow Jones stock Salesforce (CRM), along with Snowflake (SNOW), Ulta Beauty (ULTA) and Workday (WDAY).

Stock Market Today

On Monday, the Dow Jones Industrial Average lost 1.45%, or 497 points, and the S&P 500 dropped 1.5%. The tech-heavy Nasdaq composite sold off 1.6%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 1.5% and the SPDR S&P 500 (SPY) fell 1.6%.

Solar stocks sold off sharply Monday, as an analyst downgrade of First Solar (FSLR) impacted the rest of the industry. FSLR stock declined 3.4% after JPMorgan downgraded the stock from overweight to neutral due to the stock’s strong performance in recent weeks. Array Technologies (ARRY) and Shoals Technologies (SHLS) tumbled 7.1% and 6.4%, respectively. Array Technologies gave up a recent buy point, while SHLS stock fell back into buy range above a 28.57 buy point.

Electric vehicle giant Tesla (TSLA) traded a fraction higher Monday. Among Dow Jones stocks, Apple (AAPL) traded down 2.6% and Microsoft (MSFT) declined 2.3% in today’s stock market.

IPO Leader Array Technologies, IBD Leaderboard stock Arista Networks (ANET), Celsius (CELH) and Chubb (CB) — as well as Dow Jones names Boeing (BA), Caterpillar (CAT) and Chevron (CVX) — are among the top stocks to buy and watch.

Arista Networks is an IBD Leaderboard stock and was a recent IBD Stock Of The Day. Boeing is an IBD SwingTrader stock and was one of the four leaders featured in this week’s Stocks Near A Buy Zone column. Celsius was Monday’s IBD 50 Stocks To Watch pick.

4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally

Dow Jones Futures Today: Treasury Yields, Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures rose 0.1%, while the S&P 500 gained 0.15%. The tech-heavy Nasdaq 100 futures moved up 0.2% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year Treasury yield ticked higher to 3.7% Monday, holding near its recent lows. On Friday, the 10-year Treasury yield closed at 3.69%, its lowest close since Oct. 4. Meanwhile, U.S. oil prices reversed higher after touching their lowest level since December 2021. West Texas Intermediate futures traded around $77 a barrel.

IBD’s latest newsletter, MarketDiem, gives you actionable ideas for stocks, options and crypto right in your inbox.

What To Do In The Stock Market Rally

Now is an important time to read IBD’s The Big Picture column with the stock market trend back in a “confirmed uptrend.”

While it’s fine putting money to work in the current stock market, keep your exposure on the conservative side with small positions to start. Just because the stock market is in a confirmed uptrend doesn’t mean you have to be 100% invested. And don’t be afraid to take a 10% gain if you have it, given the choppy nature of the market.

(Check out IBD Stock Lists like the IBD 50 and Stocks Near A Buy Zone, for additional stock ideas.)

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Boeing, Caterpillar, Chevron

Airplane maker Boeing dropped 3.7% Monday, falling back under a cup base’s 173.95 buy point. Look for a decisive retake of that entry before considering a purchase of Boeing shares.

Dow Jones member Caterpillar is close to retaking its cup base’s 238 buy point, according to IBD MarketSmith pattern recognition, and is less than 2% below the entry. CAT stock, with a heavy exposure to China, fell 1.4% Monday.

CAT stock boasts an impressive 96 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup.

Energy giant Chevron fell 2.9% Monday, giving up its 182.50 buy point in a consolidation base.

Top Stocks To Buy And Watch: Array, Arista, Celsius, Chubb

Solar leader and IPO stock Array Technologies gave up its 22.40 buy point in a cup with handle during Monday’s tumble, according to IBD MarketSmith pattern recognition. Shares are about 3% below the entry. Further weakness would trigger the 7%-8% loss-cutting sell rule.

IBD Leaderboard stock Arista Networks remains in buy range above a choppy base’s 132.97 buy point despite Monday’s 1.5% loss.

Energy-drink maker Celsius reversed down 1.3% Monday, as the stock continues to form a cup base with a 118.29 buy point. Monday’s weakness could be the start of potential handle that would offer a lower entry.

Chubb is trading just below a cup-with-handle’s 216.10 buy point Monday after the session’s slight losses. The 5% buy area will top out at 226.91.

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

Tesla Stock

Tesla stock inched higher Monday, but remains sharply below its 50- and 200-day moving average lines. Shares are around 55% off their 52-week high.

Last week, the stock hit its lowest level since Nov. 23, 2020, reaching a new 52-week low price at 166.19.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares sold off 2.6% Monday, breaking down below their 50-day support level. Apple iPhone Pro production could fall short by 6 million units due to civil unrest and Covid restrictions in China, according to reports. The stock is more than 20% off its 52-week high.

Bloomberg reported that unrest at the Foxconn plant in Zhengzhou could trigger a 6-million-unit shortfall in 2022 iPhone Pro production. And that number could grow if Covid restrictions are extended a few more weeks, according to sources. The Zhengzhou factory manufactures the vast majority of iPhone 14 Pro and Pro Max smartphones.

Microsoft skidded 2.3% Monday, falling for a second straight session. Shares continue to hold above the 50-day line. The software giant remains about 30% off its 52-week high.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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Business

Oil dives, hits 10-month low on reports of OPEC+ output boost

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  • Saudi Arabia and other OPEC producers eye output increase -WSJ
  • Chinese demand fears and strong dollar also weigh on prices

NEW YORK, Nov 21 (Reuters) – Oil prices plunged on Monday to their lowest since early January, after the Wall Street Journal reported that Saudi Arabia and other OPEC oil producers are considering a half-million barrel daily output increase.

Brent crude futures for January tumbled $4.07, or 4.7%, to $82.93 a barrel by 11:43 a.m. EST (1643 GMT). U.S. West Texas Intermediate (WTI) crude futures for December were down $4.48, or 5.6%, at $75.60 ahead of the contract’s expiry later on Monday. The more active January contract was down $4.05, or 5%, at $76.04.

An increase of up to 500,000 barrels per day (bpd) will be discussed at the OPEC+ meeting on Dec. 4, The Wall Street Journal reported.

Reuters was not immediately able to verify the report.

“It’s hard to believe they’re going into a market that is basically trading in contango,” said Bob Yawger, director of energy futures at Mizuho in New York, referring the effect of current oil futures trading at a discount to later dated contracts. “That’s playing with fire.”

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, recently cut production targets and de facto leader Saudi Arabia’s energy minister was quoted this month as saying the group will remain cautious.

Releasing more oil at the same time as weak Chinese fuel demand and U.S. dollar strength could move the market deeper into contango, encouraging more oil to go into storage and pushing prices still lower, Yawger said.

Expectations of further increases to interest rates have buoyed the greenback, making dollar-denominated commodities like crude more expensive for investors.

The dollar rose 0.9% against the Japanese yen to 141.665 yen, on pace for its largest one-day gain since Oct. 14. read more

“Apart from the weakened demand outlook due to China’s COVID curbs, a rebound in the U.S. dollar today is also a bearish factor for oil prices,” said CMC Markets analyst Tina Teng.

“Risk sentiment becomes fragile as all the recent major countries’ economic data point to a recessionary scenario, especially in the UK and euro zone,” she said, adding that hawkish comments from the U.S. Federal Reserve last week also sparked concerns over the U.S. economic outlook.

New COVID case numbers in China remained close to April peaks as the country battles outbreaks nationwide.

The front-month Brent crude futures spread narrowed sharply last week while WTI flipped into contango, reflecting dwindling supply concerns.

Additional reporting by Noah Browning, Florence Tan and Emily Chow
Editing by Jason Neely, David Goodman and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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Business

Ethereum completes merge, Do Kwon faces arrest warrant and Bitcoin dives after rally: Hodler’s Digest, Sept. 11-17

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Coming every Saturday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

Top Stories This Week

 

Breaking: Historic day for crypto as Ethereum Merge to proof-of-stake occurs

Ethereum’s highly anticipated conversion to a proof-of-stake (PoS) consensus algorithm, dubbed “the Merge,” took place at 6:42:42 am UTC on Sept. 15. The move is a key part of an overarching multi-year transition for the Ethereum blockchain. “It starts a chain reaction of changes,” Eli Ben-Sasson, co-founder and president of StarkWare, told Cointelegraph regarding the Merge. The Merge will reportedly help the Ethereum blockchain reduce its energy consumption by around 99%. 

During a viewing party before the network’s shift from proof-of-work (PoW) to PoS, Ethereum co-founder Vitalik Buterin said: “[It] has obviously been a dream for the Ethereum ecosystem since pretty much the beginning. We started the proof-of-stake research with that blog post on Slosher back in January 2014.”

One party known as ETHW Core disagrees with the transition, however, aiming to maintain a PoW version of Ethereum via a fork in the 24 hours following the Merge. Multiple crypto exchanges plan on listing the forked chain’s related asset, ETHPoW (ETHW).

 

Abra announces plans for US bank supporting digital assets

Digital asset trading platform Abra announced that it was establishing two financial institutions: a United States bank and an international crypto business. Aimed to open in 2023, the U.S. state-chartered bank will operate under the name Abra Bank and will be compatible with digital assets in a format similar to money at traditional banks, or so it appears. Stationed beyond U.S. borders, a branch known as Abra International is also in the plans. The firm is looking to check all the appropriate boxes for Abra Bank and Abra International in terms of regulation.  

 

 

Norwegian central bank uses Ethereum to build national digital currency

Norway’s central bank, Norges Bank, is using the Ethereum blockchain’s structure to construct its central bank digital currency (CBDC). The bank is still in the early stages of building its CBDC, but has unveiled the open-source code for the asset’s testnet via a sandbox. Many countries have expressed interest in or have started working on a CBDC, though the asset does not necessarily need to be built on the blockchain. The Bahamas and Nigeria already have live CBDCs.

 

SEC to address growing crypto issuer filings with specialized offices

During the remainder of 2022, the U.S. Securities and Exchange Commission (SEC) will add a pair of new offices, one of which will aid in its crypto regulatory pursuits. The Office of Crypto Assets, housed under the Division of Corporation Finance’s Disclosure Review Program, will evaluate digital asset filings. Such crypto issuer filings have increased, likely given the SEC’s increasing activity in crypto industry overwatch. This week, the U.S. government also unveiled a crypto regulatory framework covering numerous topics, with nine government departments involved in the framework’s creation.

 

Possession of Bitcoin still legal in China despite the ban, lawyer says

China’s regulatory regime for cryptocurrency remains unclear. “To date, possession of crypto in China has not been banned,” Lesperance & Associates founder David Lesperance told Cointelegraph. In fact, crypto holders in the country are protected by law on matters related to theft, misappropriation or breach of a loan agreement. “It does not make the commercial trading of this type of property legal, as the government has specifically banned crypto exchanges in China,” he added.

 

 

 

Winners and Losers

 

At the end of the week, Bitcoin (BTC) is at $19,462, Ether (ETH) at $1,425 and XRP at $0.33. The total market cap is at $949.92 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Celsius (CEL) at 12.12%, Compound (COMP) at 10.97% and Kyber Network Crystal v2 (KNC) at 4.31%.

The top three altcoin losers of the week are Terra (LUNA) at -49.07%, TerraClassicUSD (USTC) at -29.01% and Terra Classic (LUNC) at -26.47%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

 

 

 

 

Most Memorable Quotations

 

“I think the market, not only crypto markets but the stock market, is clinging to a hope that someday the Federal Reserve will magically say, ‘Well, I think this will be the last or the two last rate hikes.’”

Marcel Pechman, markets analyst and Cointelegraph contributor

 

“Music NFTs are an anti-genre. We’re seeing a lot more diversity and creative freedom in NFTs — as if artists are finally free to create for the sake of creating and not to fit the algorithms.”

Adrien Stern, co-founder and CEO of Reveel Technology

 

“DeFi insurance is a sleeping giant. With less than 1% of all crypto covered and less than 3% of DeFi, there’s a huge market opportunity still to be realized.”

Dan Thomson, chief marketing officer for InsurAce

 

“If enough people get behind a fork for whatever reason, we feel the free market will decide on what should live and what should not.”

Bradley Duke, co-CEO of ETC Group

 

“It will be a significant mark of success when the first [Ethereum] block is produced by proof-of-stake. But this is like completing the launch of a rocket — we still have the rest of the journey ahead of us, which will pose its challenges.”

Eli Ben-Sasson, co-founder and president of StarkWare

 

“Web3 seeks to safeguard the legitimate claims of individuals to have full control of their data and put privacy at the forefront of their online lives.”

Úrsula O’Kuinghttons, director of communications and partnerships at the Web3 Foundation

 

Prediction of the Week 

 

Bitcoin price threatens $19.6K as Ray Dalio predicts 30% stocks crash

Bitcoin got all the way up above $22,000 this week but subsequently fell back below the $20,000 mark in the days following, according to Cointelegraph’s BTC price index.

Billionaire investor and hedge fund manager Ray Dalio expects traditional markets to face downward pressure due to surging inflation and rising interest rates. Crypto assets have traded in tandem with traditional markets as of late.

“I estimate that a rise in rates from where they are to about 4.5 percent will produce about a 20 percent negative impact on equity prices (on average, though greater for longer duration assets and less for shorter duration ones) based on the present value discount effect and about a 10 percent negative impact from declining incomes,” Dalio said in a Sept. 13 blog post.

 

 

FUD of the Week 

Thai SEC intends to ban crypto lending in the country

Thailand’s Securities and Exchange Commission wants to forbid “digital asset business operators” from providing crypto lending and staking services to customers, according to a Sept. 15 announcement from the government agency. The announcement requests feedback from the public on a potential ban, with Oct. 17 as the deadline to weigh in on the issue.

 

South Korea issues arrest warrant for Terra Founder Do Kwon

Authorities in South Korea are reportedly on the lookout for six people, including Terraform Labs co-founder Do Kwon, although Kwon and the others are in Singapore presently. The six individuals are reportedly the subject of an arrest warrant put out by a Seoul court. Kwon allegedly broke capital markets law in South Korea, according to the prosecutor. Terraform Labs heads up the Luna crypto project, which suffered a dramatic demise earlier in 2022. Further news saw prosecutors seeking to revoke passports for the six, who were all involved in the Luna crypto project. Additionally, prosecutors are seeking an international warrant for the arrest of the six.

 

Stone Ridge board approved plan for ‘liquidation and dissolution’ of its Bitcoin fund

Stone Ridge’s Bitcoin Strategy Fund will close up shop after Oct. 3, with liquidation expected around Oct. 21. On Sept. 9, the Stone Ridge Trust board of trustees voted in favor of the fund’s termination, according to a U.S. SEC filing this week. The fund, in part, uses futures products to give investors exposure to Bitcoin.

 

 

Best Cointelegraph Features

Ethereum is eating the world — ‘You only need one internet’

“Is there a need for more than one internet? And we know the answer is ‘Hell no.’”

Guide to real-life crypto OGs you’d meet at a party (Part 2)

“I think OGs are hard core believers who went all-in when nobody else was paying attention to the space.”

Boom and bust: How are Defi protocols handling the bear market?

A look at how DeFi protocols have fared during the recent bear market and the importance of continuing to build during market downturns.

 

The best of blockchain, every Tuesday

Subscribe for thoughtful explorations and leisurely reads from Magazine.

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Business

Dow Jones Futures: Stock Market Selling Resumes As This Bull Case Turns Bearish; FedEx Dives

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Dow Jones futures fell overnight, along with S&P 500 futures and Nasdaq futures, with FedEx (FDX) plunging overnight on weak earnings and guidance. The stock market rally continued to weaken, with the major indexes wiping out Wednesday’s slim-to-modest bounce, while Treasury yields are near long-term highs.




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The market is still coming to grips with Tuesday’s hot CPI inflation report, which upended the bull case of the Federal Reserve slowing rate hikes soon.

Adobe (ADBE) crashed on mixed results and a $20 billion acquisition. Oil and natural gas stocks fell with energy prices, but solar and lithium stocks also took hefty losses.

Neurocrine Biosciences (NBIX) and Vertex Pharmaceuticals (VRTX) continue to act well, though they haven’t been easy to trade either.

Meanwhile, megacap techs continue to weaken. Apple (AAPL), which on Monday flashed an early buy signal, undercut short-term lows Thursday. Microsoft (MSFT) is nearing its June lows while Google parent Alphabet (GOOGL) set a 19-month closing low.

NBIX stock is on IBD Leaderboard. Microsoft and Google stock are on IBD Long-Term Leaders. VRTX stock is on the IBD Big Cap 20.

FedEx Earnings

After the close, FedEx reported fiscal first-quarter earnings fell 21% vs. a year earlier vs. views for an 18% gain. Revenue rose modestly but slightly missed forecasts. The shipping giant also pulled fiscal 2023 guidance and announced sweeping cost-cutting measures as it faces declining shipping volumes. FedEx had been scheduled to release Q1 results on Sept. 22.

FDX stock plunged 17% in overnight trading. Archrival UPS (UPS) sank 6%. Amazon.com (AMZN) fell 2%. Amazon has reduced its ties with FedEx, but the warning may be bad news for e-commerce overall.

Separately, General Electric (GE) said continued supply-chain issues are pressuring cash flow. GE stock fell 4% overnight.

Dow Jones Futures Today

Dow Jones futures dropped 0.5% vs. fair value. S&P 500 futures fell 0.6%. Nasdaq 100 futures declined 0.75%.

The 10-year Treasury yield fell 1 basis point to 3.45%.

China’s economy showed signs of perking up last month amid new stimulus measures. August industrial production grew 4.2% vs. a year earlier, topping views for 3.8%. Retail sales rose 5.4%, besting forecasts for 3.5%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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

Stock Market Rally

The stock market rally opened higher Thursday but that didn’t last, as selling soon took hold.

Jobless claims fell yet again to a three-month low, but other data, including August retail sales, generally pointed to a weaker economy than expected, but with easing price pressures. The Atlanta Fed’s GDPNow tool estimates Q3 GDP growth of just 0.5% vs. its outlook for 2.5% back in August.

The Dow Jones Industrial Average fell 0.6% in Thursday’s stock market trading. The S&P 500 index lost 1.1%. The Nasdaq composite gave up 1.4%. The small-cap Russell 2000 lost 0.7%.

Apple stock sank 1.9% to 152.37, undercutting the low of its already hefty handle. After gapping up above its 50-day and 200-day lines Monday, shares plunged back below those key levels in Tuesday’s market meltdown.

Microsoft stock sank 2.7% to 245.38 Thursday, the lowest point since its mid-June bottom. Google stock fell 2% to 102.91, not undercutting its May 24 intraday low but the worst close since April 2022.

U.S. crude oil prices sank 3.8% to $85.10 a barrel. Natural gas prices plunged 8.7% as an averted rail strike will keep coal shipments going. Natgas had spiked on Wednesday.

The 10-year Treasury yield rose 5 basis points to 3.46%, despite the lackluster economic data. That’s just below the 11-year high of 3.48% set on June 14. The one-year yield has topped 4%.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slumped 2.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 1%. The iShares Expanded Tech-Software Sector ETF (IGV) gave up 3.2%, with Adobe and MSFT stock major components. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.8%.

SPDR S&P Metals & Mining ETF (XME) declined 2.75%. The Energy Select SPDR ETF (XLE) fell 2.6% and the Financial Select SPDR ETF (XLF) edged up 0.3%. The Health Care Select Sector SPDR Fund (XLV) climbed 0.6%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 2.2% and ARK Genomics ETF (ARKG) 1.8%.

Five Best Chinese Stocks To Watch Now

NBIX Stock

NBIX stock rose 2.5% to 106.93 on Thursday. Neurocrine Biosciences now has a flat base with a 109.36 buy point, according to MarketSmith analysis. Shares have flashed some early entries in the last couple of weeks, but quickly pulled back. Soon after Wednesday’s open, NBIX stock skidded to 100.46, testing its 50-day line and the top of a prior base. In theory, a trader could have bought Neurocrine as it rebounded from its 50-day line, but it would have taken a brave soul to place that bet given the market conditions.

The relative strength line is at a new high, reflecting NBIX stock’s strong outperformance in a weak market.

VRTX Stock

VRTX stock climbed 1% to 287.67, just below 50-day line. Vertex Pharmaceuticals flashed some early buy signals late last week, but fell 4.4% on Tuesday, dropping below its 50-day.

In a few days, Vertex stock may have its own flat base.

Market Rally Analysis

The stock market rally is showing no appetite for bouncing back. After Wednesday’s tentative, lackluster rebound from Tuesday’s sell-off, the major indexes wiped out those gains easily.

The Nasdaq 100, with Apple, Microsoft and Google stock key weights, undercut its Sept. 6 intraday low. The Nasdaq and S&P 500 have not yet undercut the Sept. 6 lows. but both set their worst closes since July.

The Nasdaq closing below the Sept. 6 low would likely spell the end for the long-ailing market rally.

On a technical basis, the major indexes need to get back above their 50-day moving averages. Their 21-day lines are now below the 50-day.

The looming Fed meeting adds to the risks over the next few days. More broadly, the market will likely struggle to make lasting advances until there is a strong sense that the Fed will slow and soon pause rate hikes. That had been the hope heading into the CPI inflation report on Tuesday. But no longer.

Meanwhile, not only is inflation higher than believed just a few days ago, economic activity is weaker. So the Federal Reserve will be imposing more “pain” amid a struggling economy.

A recession — or a zero-growth economy with tight labor markets — will be tough for businesses to navigate.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The market rally is once again barely hanging on. Far too many intriguing stocks will flash a buy signal then reverse lower the next day. It’s just an extremely difficult environment to be investing in.

Until the major indexes are back above their 50-day moving averages, investors should have modest exposure, at most, and be extremely cautious about any new buys. Clarity on a Fed rate hike end game would be nice, but that may not come for several weeks or more.

Market conditions could quickly improve or deteriorate. If it’s the former, you’ll want to have an up-to-date watchlist. If it’s the latter, you’ll be glad you worked on watchlists vs. buying new stocks.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Technology

In-Depth The Last of Us Remake Comparison Deep Dives PS5 Improvements

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The comparisons will get more complex come launch, of course, but we’ve seen more than enough of The Last of Us: Part I for some pretty good side-by-sides. YouTube channel Analista De Bits has been brilliant at putting together these types of videos, and has done a superb job of contrasting all of the footage available from Naughty Dog’s slightly controversial PS5 remake to the 2014 PS4 Pro version.

Some of the details are massive, others less obvious. For example, the video demonstrates how pretty much all of the animations in the game have been redone – even down to one largely meaningless NPC who now actually uses the handles of his chair to prop himself up. This is minuscule stuff, but it’s there.

The bigger changes relate to the overall revision of the art direction, which looks much more like concept art in the remake, and feels more consistent with the sequel. Explosions have more motion to them – even down to the way details in the scenery bob and sway from the impact. Naughty Dog already discussed the improvements to the physics, which means objects fall over and roll around the ground.

There are even changes to the way some cutscenes have been framed, with new camera positions used to help heighten the sense of tension. There is a lot to dig into here, but there’s no escaping from the fact that, while the new version looks significantly better, the original does still hold up in direct comparison.

And when you consider that the transformative gameplay mechanics from The Last of Us: Part II – like the ability to go prone and dodge – are completely absent, it leaves a lot of heavy lifting for the raw visuals to do. We’re looking forward to playing the game and putting it through its paces ourselves, but for now, the jury’s still ultimately out.



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Sports

Anita Alvarez: Coach dives into pool to save American swimmer at World Championships

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Coach Andrea Fuentes jumped into the pool after she saw the 25-year-old artistic swimmer sink to the bottom at the end of her routine in the women’s solo free event on Wednesday.

Fuentes, a four-time Olympic medalist in synchronized swimming, lifted Alvarez to the surface before helping bring her to the edge of the pool.

Alvarez, who competed at the 2016 and 2020 Olympics, received medical attention beside the pool, Reuters reported, and was subsequently carried off in a stretcher.

It was the second time Fuentes has had to rescue Alvarez, according to Reuters, after she leapt into the pool during an Olympic qualification event last year and pulled her to safety, along with the American’s swim partner Lindi Schroeder.

Speaking to Spanish broadcaster Cadena COPE in a radio interview, Fuentes said the lifeguards didn’t react quickly enough on Wednesday, which is why she jumped in.

She said: “When a swimmer finishes their routine, the first thing they want to do is breathe and so I saw that instead of going up, she was going down and I told myself, ‘Something is going on,’ and I called for the lifeguards, like, ‘Go into the pool, can’t you see she’s going down in the water?’

“And they weren’t reacting, so after a couple of seconds, I went in as fast as I could.

“I don’t think I’ve swum as fast ever before, even when I got Olympic medals and well, in the end, I was able to get her up and she wasn’t breathing … In the end, everything came out OK.”

The International Swimming Federation (FINA) — the sport’s governing body — did not immediately respond to CNN’s request for a comment on the speed of the rescue.

But in a statement to CNN on Thursday, FINA said it had been in contact with Alvarez, her team and medical staff following what it described as a “medical emergency.”

“Ms. Alvarez was immediately treated by a medical team in the venue and is in good health,” the statement read.

In a statement on the US Artistic Swimming Instagram page, Fuentes said Alvarez would rest on Thursday and consult her doctor to see if she would be fit to compete in the swim free team finals, which are scheduled to take place Friday, according to FINA.

“Anita is okay — the doctors checked all vitals and everything is normal: heart rate, oxygen, sugar levels, blood pressure, etc … all is okay,” Fuentes said in the statement.

“We sometimes forget that this happens in other high-endurance sports. Marathon, cycling, cross country … we all have seen images where some athletes don’t make it to the finish line and others help them to get there,” Fuentes added.

“Our sport is no different than others, just in a pool, we push through limits and sometimes we find them. Anita feels good now and the doctors also say she is okay.”

Alvarez — USA’s 2021 Artistic Swimming Athlete of the Year — finished seventh. Japan’s Yukiko Inui claimed gold, while Ukrainian Marta Fiedina and Evangelia Platanioti of Greece came second and third respectively.

Born in Kenmore, NY, Alvarez competed at the 2012 US Olympic trials, aged 14. Four years later, she made the team, finishing ninth in the duet at Rio 2016. She was 13th in the same event at Tokyo 2020.



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Sports

Anita Alvarez: Coach dives into pool to save American swimmer at World Championships

Leave a comment

Coach Andrea Fuentes jumped into the pool after she saw the 25-year-old artistic swimmer sink to the bottom at the end of her routine in the women’s solo free event.

Fuentes, a four-time Olympic medalist in synchronized swimming, lifted Alvarez to the surface before helping bring her to the edge of the pool.

Alvarez received medical attention beside the pool, Reuters reported, and was subsequently carried off in a stretcher.

It was the second time Fuentes has had to rescue Alvarez, according to Reuters, after she leapt into the pool during an Olympic qualification event last year and pulled her to safety, along with the American’s swim partner Lindi Schroeder.

Fuentes told Spanish broadcaster Cadena COPE in a radio interview: “I don’t think I’ve swum as fast ever before, even when I got Olympic medals and well, in the end, I was able to get her up and she wasn’t breathing. Later, came the lifeguard.”
In a statement on the US Artistic Swimming Instagram page, Fuentes said Alvarez would rest on Thursday and consult her doctor to see if she would be fit to compete in the swim free team finals, which are scheduled to take place Friday, according to the website of the sport’s governing body, FINA.
“Anita is okay — the doctors checked all vitals and everything is normal: heart rate, oxygen, sugar levels, blood pressure, etc … all is okay,” Fuentes said in the statement.

“We sometimes forget that this happens in other high-endurance sports. Marathon, cycling, cross country … we all have seen images where some athletes don’t make it to the finish line and others help them to get there,” Fuentes added.

“Our sport is no different than others, just in a pool, we push through limits and sometimes we find them. Anita feels good now and the doctors also say she is okay.”

Alvarez finished in seventh place behind Japan’s Yukiko Inui, who claimed gold, while Ukrainian Marta Fiedina and Evangelia Platanioti of Greece came in second and third respectively, according to the International Swimming Federation (FINA) website.



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Business

Dow Jones Futures Rise As Microsoft Pops After Nasdaq Breaks Lower, Tesla Dives

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Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures fell slightly, all reversing Tuesday evening losses as Microsoft stock and Google parent Alphabet (GOOGL) moved on earnings.




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The stock market tumbled Tuesday, with the Nasdaq breaking below its March lows as Tesla (TSLA) plunged in reaction to CEO Elon Musk’s Twitter (TWTR) deal.

In addition to Microsoft (MSFT) and Google stock, General Motors (GM), Edwards Lifesciences (EW), Visa (V) and Juniper Networks (JNPR) were among the many notable companies reporting late Tuesday. Early Wednesday, General Dynamics (GD) and Boeing (BA) are on tap.

Tesla stock and Microsoft are on IBD Leaderboard. MSFT stock and Google are on the IBD Long-Term Leaders list.

The video embedded in this article discusses Tuesday’s market sell-off and analyzes Tesla stock, Waste Management (WM) and Cheniere Energy (LNG), another Leaderboard stock.

Dow Jones Futures Today

Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures climbed 0.3%. Nasdaq 100 futures advanced 0.1%. Futures improved from Tuesday evening lows as Microsoft stock raced higher and Google cut overnight losses. Microsoft is a Dow Jones, S&P 500 and Nasdaq giant. Visa is a Dow and S&P 500 component while Google stock is on the S&P 500 and Nasdaq.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Key Earnings

Microsoft earnings topped fiscal Q3 results amid strong cloud-related growth. Microsoft stock initially fell but then rose 4.5% as the tech titan guided for strong cloud growth. Shares fell 3.7% on Tuesday to 270.22, matching its March low of 270 intraday.

Google earnings fell short while revenue was just a hair below estimates. The internet giant announced a $70 billion Google stock buyback. Google stock fell more than 2% overnight, though that was off their worst levels. Google sank 3.6% to 2,373 on Tuesday, at 10-month lows.

Edwards Lifesciences earnings narrowly topped views while the medical products maker reaffirmed guidance. EW stock skidded 5% in extended trade. Shares sank about 3% to 116.27 on Tuesday. Edwards stock broke out last week, but tumbled back below a buy point on Friday.

GM earnings fell but topped views, while revenue came in light. GM stock rose modestly after hours. Shares fell 4.5% on Tuesday to 38.04, the lowest close since late 2020.

Visa earnings comfortably beat consensus Visa stock rose 5% in overnight action. Shares retreated 4.2% on Tuesday to 201.10, losing sight of its 50-day and 200-day lines.

Juniper earnings just missed while revenue only edged past targets. JNPR stock fell sharply in extended action. Shares slid nearly 3% on Tuesday to 33.60, falling back from its 50-day line. Juniper stock had been holding up better than most tech stocks.

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

Stock Market Tuesday

A one-day stock market rally quickly fell apart as the major indexes sold off sharply. The Dow Jones Industrial Average fell 2.4% in Tuesday’s stock market trading. The S&P 500 index retreated 2.8%, with Tesla stock and General Electric (GE) the biggest losers. The Nasdaq composite crumbled nearly 4%. The small-cap Russell 2000 tumbled 3.15%.

U.S. crude oil prices jumped 3.2% to $101.70 a barrel.

The 10-year Treasury yield fell 5 basis points to 2.77%.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) gave up 2.9%, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 3.7%, with Microsoft stock a major IGV holding. The VanEck Vectors Semiconductor ETF (SMH) skidded 4.3%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) plunged 6.75% and ARK Genomics ETF (ARKG) 6%. Both hit their lowest levels since April 2020. The relative strength lines for ARKK and ARKG are at their lowest point in nearly five years, meaning investors would have been better off holding the S&P 500. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) lost 1.75% and the Global X U.S. Infrastructure Development ETF (PAVE) fell 2.2%. U.S. Global Jets ETF (JETS) descended 4.2%. SPDR S&P Homebuilders ETF (XHB) declined 2.3%. The Energy Select SPDR ETF (XLE) edged up 0.1% and the Financial Select SPDR ETF (XLF) slumped 2.5%. The Health Care Select Sector SPDR Fund (XLV) declined 1.8%

Five Best Chinese Stocks To Watch Now

Tesla Stock

Tesla stock plunged 12.2% on Tuesday to 876.42, tumbling below its 50-day moving average and even its 200-day.

Investors appear concerned that CEO Elon Musk will sell a significant part of his TSLA stock holdings to pay for his Twitter deal. Musk is financing the $44 billion Twitter takeover with $12.5 billion backed by some of his TSLA stock as well as another $21 billion in funding that he’s personally guaranteed but offered few details on. Twitter stock fell 3.9% to 49.68 on Tuesday, creating a bigger gap from the $54.20 takeover price.

Tesla stock had been trading around the 1,000 mark for the past two weeks, which was encouraging. But in a market correction, stocks will sometimes hold up for a few days or even a few weeks before suddenly breaking hard.

Tesla stock still looks better than other EV and auto stocks and all the megacaps with the possible exception of Apple (AAPL). But that’s not saying much.

Shares have not returned to mid-March levels, but have retraced all or nearly all of the gains since TSLA stock raced past its 200-day and 50-day lines.

Technically, TSLA stock still has a 1,152.97 cup-with-handle buy point, according to MarketSmith analysis. But the chart doesn’t look right. It would be better if Tesla’s handle developed into its own base.

The Ford F-150 Lightning production event Tuesday signals further U.S. competition for Tesla, which won’t start making its Cybertruck until at least next year. Meanwhile, Tesla will almost certainly lose its EV crown in terms of vehicles sold in the second quarter to BYD (BYDDF), though the Chinese EV and battery giant will do so via EVs and hybrids combined.

When It’s Time To Sell Your Favorite Stock

Market Analysis

The Nasdaq, S&P 500 and finally the Dow Jones undercut Monday’s intraday lows, ending their one-day rally attempts. The Nasdaq undercut its March 14 low to its worst level in 13 months. The others are closing in on their 2022 lows. The Dow Jones did not fall below Monday’s lows, so its stock market rally attempt is still hanging on, for now.

The major indexes are reeling with widespread damage throughout the market and don’t seem to be signaling a bottom yet.

The CBOE Volatility Index, tied to the S&P 500 index, jumped to its highest point since mid-March, but the VIX is still well of its February highs. However, the CBOE Nasdaq Market Volatility Index is getting up to its late February/early March highs.

With Microsoft stock falling and Google tumbling overnight, fear may start to spike, especially with the major indexes tumbling as Tesla and Apple move below their 200-day lines.

Energy stocks tried to bounce back Tuesday, as crude oil prices reclaimed the $100 a barrel level. Fertilizer plays are finding key support ahead of earnings next week. Health insurers and pharma are still holding up OK, though a number of drug stocks are reporting over the next several days. Defense stocks appear to be finding support not far from buy points.

Waste Management flashed buy signals on its strong results, while Waste Connections (WCN) is hovering around a buy point.

But in most cases, even the strong groups have been trending lower over the past couple of weeks.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market is in a correction, and hasn’t shown any real signs that the bleeding will stop soon. Investors should keep exposure at minimal levels or be entirely in cash.

Tuesday’s big sell-off after Monday’s bounce shows why investors shouldn’t jump at the first uptick in a correction. This is a time to be looking for stocks that are holding up and have strong or rising RS lines. But as Tesla stock’s sudden plunge showed, resilient names and sectors can suddenly break. This is a time for building watchlists, not executing new buys.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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