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Business

Oil dives 6% as Shanghai lockdowns stoke demand fears

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Pump jacks operate at sunset in Midland, Texas U.S. February 11, 2019. Picture taken February 11, 2019. REUTERS/Nick Oxford/File Photo

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  • Shanghai fences up COVID-hit areas, fuelling fresh outcry
  • EU considers ‘smart sanctions’ on Russian oil -media
  • U.S. dollar hits two-year high

NEW YORK, April 25 (Reuters) – Oil slumped about 6% on Monday to its lowest in two weeks on growing worries about the global energy demand outlook due to prolonged COVID-19 lockdowns in Shanghai and potential increases in U.S. interest rates.

In Shanghai, authorities have erected fences outside residential buildings. In Beijing, many people have begun stockpiling food, fearing a similar lockdown after the emergence of a few cases of COVID-19. read more

“It seems that China is the elephant in the room,” said Jeffrey Halley, analyst at brokerage OANDA. “The tightening COVID-zero restrictions in Shanghai, and fears Omicron has spread in Beijing, torpedoed sentiment today.”

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Brent futures fell $6.17, or 5.8%, to $100.48 a barrel by 11:12 a.m. EDT (1512 GMT). U.S. West Texas Intermediate (WTI) crude fell $5.91, or 5.8%, to $96.16.

“Shanghai shows no signs of letting up its strict zero-COVID policy; instead vowing to step up the enforcement of COVID restrictions, which could hurt oil demand further,” said City Index analyst Fiona Cincotta.

Both benchmarks were on track for their lowest closes since April 11. Both lost nearly 5% last week and Brent has retreated sharply after hitting $139 a barrel last month, its highest level since 2008.

Also pressuring oil, the U.S. dollar

The Chinese yuan was set for its biggest three-day losing streak in nearly four years on worries of an economic slowdown in the world’s biggest oil importer. read more

Oil gained support earlier in the year from tight supplies after Russia’s Feb. 24 invasion of Ukraine caused customers to avoid buying Russian oil due to Western sanctions. But, the market could tighten further with a European Union (EU) ban on Russian crude.

The EU is preparing “smart sanctions” against Russian oil imports, according to a report in The Times of London that cited the European Commission’s executive vice president, Valdis Dombrovskis. read more

Russia’s NK Rosneft PAO (ROSN.MM) failed to sell oil in a jumbo tender after demanding prepayment in roubles, five traders said, meaning the country’s top oil company must find ways to divert more crude to Asian buyers via private deals. read more

A shipping unit of France’s TotalEnergies SE (TTEF.PA) has provisionally chartered a tanker to load Abu Dhabi crude in early May for Europe, the first such shipment in two years, according to traders and a shipping report. read more

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Additional reporting by Yuka Obayashi in Tokyo and Alex Lawler in London; Editing by David Goodman, Susan Fenton and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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Business

Oil dives 4%, below $100 on China lockdowns, reserves release plan

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An oil & gas pump jack is seen near Granum, Alberta, Canada May 6, 2020. REUTERS/Todd Korol/File Photo

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  • IEA members to release 240 mln barrels over 6 months
  • US dollar set to rise for 8th day to most since May 2020
  • EU drafting proposals for an oil embargo on Russia
  • China oil demand seen lower, Shanghai eases lockdowns

NEW YORK, April 11 (Reuters) – Oil prices fell about 4% on Monday, with Brent crude tumbling below $100 a barrel on worries that the COVID-19 pandemic will cut demand in China and as International Energy Agency (IEA) countries plan to release record volumes of oil from strategic stocks.

U.S. West Texas Intermediate (WTI) closed at its lowest since Feb. 25, the day after Russian forces invaded Ukraine, an action Moscow calls a “special military operation.”

Brent futures fell $4.30, or 4.2%, to settle at $98.48 a barrel, while WTI crude fell $3.97, or 4.0%, to settle at $94.29. It was the lowest close for Brent since March 16.

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Fuel consumption in China, the world’s biggest oil importer, has stalled with COVID-19 lockdowns in Shanghai, analysts at the Eurasia Group consultancy said. Shanghai, China’s financial center, started easing lockdowns in some areas on Monday despite reporting a record of more than 25,000 new COVID-19 infections. read more

“Even when the restrictions in Shanghai are lifted, China’s zero-Covid policies will likely remain a drag on demand,” Eurasia Group said, noting Shanghai lockdowns likely reduced China’s overall oil consumption by up to 1.3 million barrels per day (bpd).

To help offset a shortfall in Russian crude after Moscow was hit with sanctions, IEA member nations, including the United States, will release 240 million barrels of oil over the next six months. read more

The release of Strategic Petroleum Reserve (SPR) volumes equals 1.3 million bpd over the next six months, enough to offset a shortfall of 1 million bpd of Russian oil supply, analysts at JP Morgan said.

“The (SPR) release will be the largest of all time, and has already broken the back of the WTI price curve,” said Robert Yawger, executive director of energy futures at Mizuho, noting the spreads were sliding toward contango.

Contango signals an oversupplied market. It is when prices for later-dated months are higher than the front-month.

In contrast, when concerns about supply shortages were high in early March, the WTI curve was in what Yawger called “super-backwardation” with each month at least $1 a barrel below the prior month through November 2023.

Adding pressure to crude prices, the U.S. dollar (.DXY) was on track to strengthen for an eighth straight day against a basket of other currencies. A stronger dollar makes oil more expensive for holders of other currencies. read more

In a move that could tighten global oil supplies, the European Union’s (EU) executive is drafting proposals for an embargo of Russian oil, although there was still no agreement to ban Russian crude. read more

The Organization of the Petroleum Exporting Countries (OPEC) told the EU that sanctions on Russia could create one of the worst-ever oil supply shocks and it would be impossible to replace those volumes. OPEC signaled it would not pump more oil. read more

U.S. President Joe Biden and Indian Prime Minister Narendra Modi held talks on Monday as Washington pushed its Asian ally to support its response to Russia’s invasion. read more

India, the world’s third-biggest oil importer, has increased purchases of Russian crude in recent months because Moscow has been forced to sell its oil at a steep discount since invading Ukraine.

Fuel demand in India rose to a three-year high in March, with petrol sales hitting an all-time peak. read more

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Additional reporting by Bozorgmehr Sharafedin in London, Florence Tan and Isabel Kua in Singapore and David Gaffen in New York; Editing by David Goodman, Mark Potter, Will Dunham and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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Business

Roblox stock dives 24% after earnings miss

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Nike is teaming up with roblox to launch a virtual world called Niketown.

Source: Nike

Roblox shares are down more than 24% after reporting earnings that missed expectations.

The gaming company reported earnings on Tuesday after the bell that missed Wall Street estimates on the top and bottom line. It noted $770 million in revenue (bookings) compared to the $772 million expected, per Refinitiv consensus estimates, for the fourth quarter. It also reported a 25 cent loss per share, worse than the 13 cents loss per share expected. Roblox said it had 49.5 million daily active users during the quarter, up 33% year-over-year.

Roblox is an open gaming platform that lets players create their own interactive “worlds.” It was the first major company working on the metaverse to go public. The company sells virtual currency to players, which is used to purchase digital items in the game. The company recently partnered with companies like Nike and the NFL.

Analysts were concerned about the slowdown in bookings and outlook.

“Our key takeaway from Roblox’s 4Q update… January 22′ bookings experienced a deceleration relative to past months, up just 2%-3%, y/y as compared to October/November/December ’21 at +15%/+23%/+21%, respectively, for example,” Stifel analysts said in a note on Tuesday evening.

“Furthermore, the company indicated y/y bookings comps, “should improve starting in the May-June timeframe,” leaving us to ponder what this suggests for February-April. Why the anticipated slowdown?”

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Business

Dow Jones Futures: Market Rallies On Powell Comments; Apple, Nvidia, Tesla In Focus; Biogen Dives Late

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Dow Jones futures were little changed Tuesday night, along with S&P 500 futures and Nasdaq futures, ahead of a key inflation report. Biogen (BIIB) dived late as Medicare restricted coverage of its Alzheimer’s drug.




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The stock market rally extended a rebound Tuesday and crude oil prices jumped as Fed chief Jerome Powell eased fears that the central bank will be overly aggressive on reducing its massive balance sheet.

Advanced Micro Devices (AMD) and Nvidia stock rallied Tuesday, and investors could see the makings of double-bottom bases. But trying to guess the (double) bottom on a stock is fraught with peril. Tesla (TSLA) has a new buy point, while Apple (AAPL) is rebounding bullishly from a key level. Meanwhile, Zim Integrated Shipping (ZIM) broke out.

Tesla stock and Nvidia (NVDA) are on IBD Leaderboard. Tesla and ZIM stock are on the IBD 50. Zim Integrated Shipping was Tuesday’s IBD Stock Of The Day.

Meanwhile, Medicare plans coverage limits on the pricey and controversial Biogen (BIIB) Alzheimer’s drug. It’ll only pay for Aduhelm for Medicare patients in clinical trials. Biogen stock plunged. Eli Lilly (LLY), which is working on a similar Alzheimer’s drug, fell modestly.

Fed Chief Powell

Fed chief  Powell testified Tuesday at a Senate Banking confirmation hearing for a second term. He assured lawmakers that the Federal Reserve will bring inflation under control.

Powell said the need for aggressive monetary stimulus is over, adding that the Federal Reserve may see some balance sheet runoff in 2022, after asset purchases go to zero in mid-March. That appeared less hawkish than at least some of his colleagues. As revealed in last week’s release of Fed minutes, several policymakers at the December meeting spoke in favor of cutting the balance sheet soon after the first Fed rate hike, which could happen as early as March. Some also suggested they wanted to pare back the balance sheet aggressively.

Inflation Report

The Labor Department’s December consumer price index is due out at 8:30 a.m. ET on Wednesday. Economists expect the CPI to show a 0.4% gain, or 0.5% excluding food and energy. Overall consumer inflation is seen rising to a fresh long-term high of 7.1% from November’s 6.8%. Core inflation is forecast to hit 5.5%, up from 4.9%.

On Thursday, the Labor Department will release the producer price index.

Dow Jones Futures Today

Dow Jones futures were just above fair value. S&P 500 futures edged higher and Nasdaq 100 futures were little changed.

The 10-year Treasury yield fell 1 basis point to 1.74%.

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

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Stock Market Rally

The stock market rally had a solid session as investors appeared to appreciate Fed chief Powell’s comments. Growth stocks, among the hardest hit in 2022, led the bounce.

The Dow Jones Industrial Average rose 0.5% in Tuesday’s stock market trading, with gains muted as investors sold some defensive blue-chip names. The S&P 500 index climbed 0.9%. The Nasdaq composite jumped 1.4%. The small-cap Russell 2000 advanced 1%.

The 10-year Treasury yield fell 3 basis points to 1.75%. The yield hit 1.81% intraday Monday. U.S. crude oil futures jumped 3.8% to $81.22 a barrel, a two-month high.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 1.2%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 1.8%. The VanEck Vectors Semiconductor ETF (SMH) popped 2%. AMD stock and Nvidia are leading SMH components.

SPDR S&P Metals & Mining ETF (XME) advanced 1.75% and Global X U.S. Infrastructure Development ETF (PAVE) added 0.6%. U.S. Global Jets ETF (JETS) ascended 1.6%. SPDR S&P Homebuilders ETF (XHB) rebounded 1.6%. The Energy Select SPDR ETF (XLE) jumped 3.4%. The Financial Select SPDR ETF (XLF) rose 0.9%. The Health Care Select Sector SPDR Fund (XLV) picked up 0.8%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) bounced 2.8% and ARK Genomics ETF (ARKG) 2.6%. Both hit their lowest levels since July 2021 at Monday’s intraday lows. Tesla stock remains the top holding across ARK Invest’s ETFs.

Five Best Chinese Stocks To Watch Now

AMD, Nvidia Stock

AMD stock rose 4% on Tuesday, while Nvidia gained 1.5%, after both erased sharp Monday losses to close slightly higher. Monday’s lows undercut the chip leaders’ December lows, so if you squint, you could see the makings of double-bottom bases. The middle of the potential W was set on Dec. 28 for both AMD and Nvidia stock.

Double-bottom bases are often powerful because of the big shift from fear to greed as the stock goes from hitting new lows to racing past buy points. They often form as the broader market is making similar moves, with the Nasdaq rebounding from new lows Monday.

But AMD and Nvidia are a long way from actually having double-bottom bases, and even further from reaching proper buy points. If the market rally deteriorated again, which is still very plausible, AMD and Nvidia stock would likely sell off again.

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

Tesla Stock

Tesla stock edged up 0.6% to 1,064.30 on Tuesday, still below the 50-day line. The EV giant also has a double-bottom base, but now has a deep but valid handle, giving it a 1,208.10 buy point. The handle formed after Tesla stock spiked higher early last week on blowout Q4 delivery figures, clearing a then-valid 1,119.10 buy point. But shares gave up all those gains and more for the week as highly valued growth stocks plunged.

Tesla also is an example of why investors shouldn’t try to guess the double bottom. In early December, TSLA stock undercut recent lows and found support around its 50-day line. Shares then rebounded for the next two sessions, as investors could start to see a double-bottom base underway. But Tesla stock then sold off hard, falling much lower until hitting a new low on Dec. 21.

Apple Stock

Apple stock rose 1.7% to 175.08, back above its 21-day line. On Monday, AAPL stock found support at its 10-week line. This is the first 10-week line pullback for the Dow Jones tech titan since its November breakout. The relative strength line for Apple stock is just below record levels, holding up extremely well vs. other megacaps or tech stocks in general.

ZIM Stock

ZIM stock jumped 4.7% to 61.44, breaking past a 59.79 buy point from a consolidation going back to September in heavy volume.

On an IBD Digital or MarketSmith chart, ZIM stock cleared a high handle to set a record high. But that’s because IBD adjusts for big dividends, reducing pre-dividend stock prices accordingly. On an unadjusted chart, ZIM stock hit a record 62.20 on Sept. 16, with Tuesday’s move a breakout from a traditional handle.

The RS line for ZIM stock is right at record highs, as the shipping giant has outperformed the S&P 500 index.

The shipping giant’s earnings are expected to fall substantially in 2022 after skyrocketing last year. But EPS is still seen far above pre-2021 levels, with Zim Integrated Shipping committed to big dividends.

Market Rally Analysis

The stock market rally on Tuesday extended the rebound from Monday’s intraday lows, when the Nasdaq undercut its 200-day line for the first time since April 2020. Arguably, the market  was due for some positive action, after looking oversold by several indicators.

Advancing stocks easily outpaced decliners on the Nasdaq and NYSE on Tuesday.

But the market rally remains under pressure. The Nasdaq remains between its 200-day line and 50-day. The Russell 2000 is still significantly below its 50- and 200-day lines. The S&P 500, meanwhile, regained its 50-day and 21-day averages. The Dow is also above key levels.

The broader energy sector boomed Tuesday. Financials also continue to do well. Bank earnings are about to get underway, with JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) reporting Friday.

Growth stock charts are still terrible overall, though.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

The stock market rally is getting a bounce, but it’s too early to tell if Monday marked a bottom. Investors should remain cautious about buying stocks in the current environment.

Very few growth or tech stocks look actionable, with a few possible exceptions such as Apple. Most likely need several weeks to recover, if not longer.

Investors could still add some exposure to energy and financial stocks, which continue to look strong. But most have already flashed early entries and made up a lot of ground in the past couple of weeks. As long as crude oil prices and 10-year Treasury yields stay high or keep rising, those sectors should fare well. But if oil prices and yields pull back substantially, those stocks may give up ground.

Right now, investors should focus on building up their watchlists. Look for stocks with strong relative strength that are finding or reclaiming key support. Pay attention to leading stocks in leading groups.

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

Nucor Stock Dives From Near Buy Point On Profit Warning

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Steelmaker Nucor (NUE) warned on profits amid declining volumes at its steel mills, a day after steel stocks rallied to defy a broad market sell-off. Nucor stock plunged from near a buy point with rivals also retreating.




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Nucor management targeted fourth-quarter earnings of $7.65-$7.75 per share. That would mark a record quarter, up from $7.28 in the third quarter and, at the midpoint, a year-over-year gain of more than 490%. But analysts on Wall Street were on average expecting $8.18, according to FactSet.

Earnings in Nucor’s steel mills segment remain robust and should be comparable to Q3 “despite lower volumes caused by year-end seasonality,” Nucor said in a statement.

The new language Wednesday marked a downshift from Oct. 21. Nucor management said then it expects steel mill segment profit to “improve” in Q4 vs. Q3, driven by additional earnings growth at its sheet and plate mills. The steel mill segment generated 67% of total company revenue, and 86% of total profit (before eliminations), in the third quarter.

Nucor continues to expect earnings to increase in its steel products unit, according to Wednesday’s statement. And it continues to forecast that earnings will fall in the raw materials segment vs. Q3 due to margin compression at Nucor’s direct reduced iron facilities.

“Demand continues to be strong in most of the end markets we serve,” Nucor said Wednesday. “We are confident that 2022 will be another year of strong profitability.”

The company did not offer specific Q4 EPS guidance during its most recent earnings report, on Oct. 21.

Nucor Stock, Steel Stocks

Shares of Nucor plunged nearly 12% to 104.65 on the stock market today, tumbling below its 50-day line. Nucor stock rose 2.5% Tuesday to briefly retake a 122.16 cup-with-handle buy point, but closed below the entry.

Among other steel stocks, United States Steel (X) dropped 4.3% on Wednesday, while Cleveland-Cliffs (CLF) dived 7.6% and Steel Dynamics (STLD) lost 6.6%.

Steel stocks went on a tear over the summer. Investors bet on the pandemic headwinds easing and on higher U.S. infrastructure spending under President Joe Biden.

In September, Nucor announced plans for a $100 million expansion of a bar mill, adding 600,000 tons of capacity. Nucor also said it would build a $2.7 billion sheet mill with a capacity of 3 million tons.

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Science

Nasa’s solar probe ‘touches’ sun for first time, dives into unexplored atmosphere | Nasa

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A Nasa spacecraft has officially “touched” the sun, plunging through the unexplored solar atmosphere known as the corona.

Scientists announced the news Tuesday during a meeting of the American Geophysical Union.

The Parker solar probe actually flew through the corona in April during the spacecraft’s eighth close approach to the sun. Scientists said it took a few months to get the data back and then several more months to confirm.

Nour Raouafi, a project scientist with Johns Hopkins University, described the news as “fascinatingly exciting”.

Because the sun lacks a solid surface, the corona is where the action is; exploring this magnetically intense region up close can help scientists better understand solar outbursts that can interfere with life here on Earth.

Launched in 2018, Parker was 8m miles (13m kilometers) from the center of the sun when it first crossed the jagged, uneven boundary between the solar atmosphere and outgoing solar wind. The spacecraft dipped in and out of the corona at least three times, each a smooth transition, according to scientists.

“The first and most dramatic time we were below for about five hours … Now you might think five hours, that doesn’t sound big”, the University of Michigan’s Justin Kasper told reporters. But he noted that Parker was moving so fast it covered a vast distance during that time, tearing along at more than 62 miles (100 kilometers) per second.

The corona appeared dustier than expected, according to Raouafi. Future coronal excursions will help scientists better understand the origin of the solar wind, he said, and how it is heated and accelerated out into space.

Preliminary data suggest Parker also dipped into the corona during its ninth close approach in August, but scientists said more analyses are needed. It made its 10th close approach last month.

Parker will keep drawing ever closer to the sun and diving deeper in to the corona until its grand finale orbit in 2025.

The latest findings were also published by the American Physical Society.

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Business

Nasdaq dives over 2% as tech stocks slide at end of volatile week

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  • Non-farm payrolls increase less than expected
  • DocuSign plunges after disappointing forecast
  • Nucor rises on hiking quarterly dividend by 23%
  • Indexes down: Dow 0.17%, S&P 0.91%, Nasdaq 2.07%

Dec 3 (Reuters) – Wall Street’s major indexes fell in choppy trading on Friday, with the Nasdaq tumblingmore than 2%, as mixed jobs data, uncertainty around the Omicron coronavirus variant and the path of the Federal Reserve’s policy tightening weighed.

The S&P 500 technology index (.SPLRCT) slid 1.9%, leading losses among the 11 major sectors.

Shares of Apple Inc (AAPL.O), Meta Platforms (FB.O), Google-owner Alphabet Inc (GOOGL.O), Amazon.com Inc (AMZN.O), Microsoft Corp (MSFT.O), Nvidia Corp (NVDA.O) and Tesla Inc (TSLA.O) fell between 1.4% and 6.1% to weigh the most on the S&P 500 and the Nasdaq.

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“What you’re seeing is the influence of technology and that is directly related to Apple, Microsoft and Nvidia etc. It’s reverse of what we’ve seen historically where the main drivers of the index are the big stocks,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Wall Street opened higher after the Labor Department’s report showed nonfarm payrolls increased less than expected in November, but the unemployment rate dropped to 4.2%, the lowest since February 2020, and wages increased further. read more

“The numbers are indicating that the economy is very strong. So it is confirmation of some of the things that Powell was talking about on the Hill this week, and is supportive of the fact that you’re probably going to see a more aggressive Fed,” said Kingsview’s Nolte.

Fed Chair Jerome Powell said earlier this week that the U.S. central bank will consider at its upcoming meeting a faster wind-down to its bond-buying program to tackle surging price pressures, a move widely seen as opening the door to earlier interest rate hikes.

The cyclical-linked Dow (.DJI) and economy-sensitive S&P sectors like industrials (.SPLRCI), materials (.SPLRCM), energy (.SPNY) and financials (.SPSY) fared better in the day’s broad selloff.

Separately, a measure of U.S. services industry activity hit a fresh record high in November as businesses boosted hiring. read more

A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S. December 28, 2016. REUTERS/Andrew Kelly/File Photo

Equity markets have swung wildly this week as investors digested updates on the newly detected Omicron variant, which is spreading globally and prompting countries to reimpose travel restrictions.

“Even if Omicron is not too virulent, all of this, coupled with a hawkish Fed, speaks to increased caution for risk assets, although if corporate profits continue upward, overall equities should still rise except perhaps many of the most expensive ones,” said John Vail, chief global strategist at Nikko Asset Management.

The main three indexes are on course for steep weekly losses, with the Dow tracking its fourth straight fall.

Wall Street’s fear gauge, the CBOE Market Volatility index (.VIX), was last trading at 30.70 points.

At 12:42 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 60.24 points, or 0.17%, at 34,579.55, the S&P 500 (.SPX) was down 41.62 points, or 0.91%, at 4,535.48, and the Nasdaq Composite (.IXIC) was down 319.08 points, or 2.07%, at 15,062.25.

DocuSign Inc (DOCU.O) plunged 40% after the electronic signature solutions firm forecast downbeat fourth-quarter revenue.

Nucor Corp (NUE.N) added 3.7% after the steel products maker increased its quarterly dividend by 23% and announced a $4 billion buyback program.

Declining issues outnumbered advancers for a 2.52-to-1 ratio on the NYSE and for a 3.94-to-1 ratio on the Nasdaq.

The S&P index recorded eight new 52-week highs and five new lows, while the Nasdaq recorded 12 new highs and 585 new lows.

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Additional reporting by Anisha Sircar and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

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Business

Dow Jones Futures Await Jobs Report After Market Rallies; DocuSign Dives; Tesla Rival Reports Booming EV Sales

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Dow Jones futures tilted higher Friday morning, along with S&P 500 futures and Nasdaq futures, erasing overnight losses with the November jobs report due. More states reported some omicron Covid cases while DocuSign tanked on weak guidance.




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The major indexes got a much-needed bounce Thursday, reclaiming key levels and shrugging off early Apple stock weakness and an FTC lawsuit vs. Nvidia. But the stock market rally remains under pressure.

D.R. Horton (DHI) and some other homebuilders flashed buy signals but generally there were few quality stocks offering attractive entries.

Meanwhile Tesla (TSLA) pulled back modestly on a bad day for EV makers. Lucid (LCID) and Rivian (RIVN) fell solidly. China-based Nio (NIO), Xpeng (XPEV), and Li Auto stock tumbled, with XPEV stock and Li Auto (LI) falling well below recent buy points intraday. The SEC said Thursday it’s moving forward on a law that requires foreign companies to open up their books to U.S. review or face delisting.

China EV giant BYD Co. (BYDDF) released booming November sales figures, dwarfing the sales of Nio, Xpeng and Li Auto. Unlike Nio stock, Li Auto and Xpeng, BYD trades over the counter in the U.S.

FTC Sues To Block Nvidia-ARM Deal

The Federal Trade Commission said Thursday afternoon that it will sue to block the $40 billion Nvidia (NVDA) takeover of U.K.-based ARM Holdings. Nvidia stock took the FTC-ARM news in stride, rising 2.2%. ARM designs wireless chips for Apple (AAPL) and many of Nvidia’s rivals.

Investors may have seen a high chance that regulators around the world would object to the biggest-ever chip deal.

DocuSign Dives, Marvell Rallies

After the close, Marvell Technology (MRVL), a chipmaker that’s been holding up well, reported earnings. So did Ulta Beauty (ULTA) and two former software leaders, Asana (ASAN) and DocuSign (DOCU). MRVL stock surged overnight, signaling a new high, while ULTA stock moved toward possible buy points. But ASAN stock and DocuSign tumbled in extended trade on weak guidance. Asana lost more than 10% while DOCU stock dived more than 30%.

Tesla and Nvidia stock are on IBD Leaderboard. Tesla stock, Nvidia and D.R. Horton are on the IBD 50. D.R. Horton also was Thursday’s IBD Stock Of The Day.

The video embedded in this article discussed Thursday’s market action and analyzed DHI stock, XPEV stock and Airbnb (ABNB).

Jobs Report

The Labor Department will release the November jobs report at 8:30 a.m. ET. Economists expect to see nonfarm payrolls up by 543,000 with the jobless rate edging down to 4.5%. It’s unclear if economists or investors want a “strong” or “weak” jobs report.

The most important job report data point may be labor force participation. If Americans stream back into the work force, that could ease labor shortages that are limiting economic growth while pushing up inflation via higher wages. The labor force participation rate is expected to tick up to 61.7% of all Americans age 16 and up.

Concerns about lasting inflation are a big reason why Fed chief Jerome Powell and other policymakers are signaling they could step up the pace of the bond taper, perhaps as soon as the Dec. 14-15 meeting.

The jobs report, based on mid-month surveys, won’t show any impact of the omicron Covid variant.

Even if omicron turns out to be no big deal from a health perspective, if it deters people from re-entering the labor force, it could have a meaningful impact on the economy.

In a best-case scenario, the omicron variant has little impact while workers flood into the labor force.

Dow Jones Futures Today

Dow Jones futures were 0.1% above fair value. S&P 500 futures rose slightly and Nasdaq 100 futures climbed 0.1%. All erased modest overnight lows.

Futures turned lower Thursday evening after New York reported five omicron Covid variant cases. Hawaii reported an omicron case Thursday night, saying it was the result of “community spread,” with the infected person not a recent traveler.

Minnesota reported an omicron case earlier Thursday after the CDC reported the first U.S. case, in California, on Wednesday.

Crude oil prices rose nearly 3% Friday morning.

The November jobs report will surely move Dow Jones futures and Treasury yields shortly before Friday’s open.

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 Thursday

The stock market rally had some early wobbles, at least on the Nasdaq, but picked up steam and closed near session highs.

The Dow Jones Industrial Average jumped 1.8% in Thursday’s stock market trading. The S&P 500 index climbed 1.4%. The Nasdaq composite advanced 0.8%. The small-cap Russell 2000 rose 2.8%.

Apple stock fell as low as 157.80 Thursday morning — well off Wednesday’s intraday peak of 170.30 — on a report that the Dow Jones tech titan warned suppliers that iPhone demand was weakening. But AAPL stock pared losses, closing off just 0.6% to 163.76.

U.S. crude oil futures rose 1.4% to $66.50 a barrel, rebounding from intraday losses as OPEC+ signaled it’ll go ahead with plans to slowly increase production vs. pausing due to the omicron variant impact. But the the cartel is ready to meet ahead of schedule if conditions change.  Still, oil prices have plunged since Thanksgiving.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.6%, as did the Innovator IBD Breakout Opportunities ETF (BOUT). The iShares Expanded Tech-Software Sector ETF (IGV) bounced 1.7%. DOCU stock and Asana are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.3% as key holding Nvidia stock’s rise offset some other chip losses. MRVL stock also is an SMH holding.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) edged up 0.4% and ARK Genomics ETF (ARKG) 1.5%. Tesla stock remains the top holding across ARK Invest’s ETFs. ARK Invest also holds some BYD stock and has taken a new position in Xpeng.

SPDR S&P Metals & Mining ETF (XME) rebounded 2.3% and Global X U.S. Infrastructure Development ETF (PAVE) just over 3%. U.S. Global Jets ETF (JETS) soared 6.1% in a big day for travel-related stocks. SPDR S&P Homebuilders ETF (XHB) ran up 3.4%, with DHI stock and other builders powering higher. The Energy Select SPDR ETF (XLE) rose 2.9% and the Financial Select SPDR ETF (XLF) 3%.

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D.R. Horton Stock

DHI stock rose 5.1% to 102.78. Shares are now back in buy range after breaking out of a double-bottom base with a 99.75 buy point, according to MarketSmith analysis. Investors could view 104.44 as a handle entry as well.

Toll Brothers (TOL) and Century Communities (CCS) also cleared entries on Thursday, though luxury builder Toll reports next week. Lower interest rates are supporting builders, along with solid job and wage gains.

EV Stocks

Tesla stock lost nearly 1% to 1084.60 on Thursday, closing a fraction below its 21-day line. Shares reversed lower on Wednesday, losing 4.35%. But TSLA stock seems to be several weeks into a possible base. On Thursday, Elon Musk sold more than 934,000 Tesla shares worth just over $1 billion, according to overnight filings.

Rivian stock slid 4.25% to 110.77. It’s working on an IPO base, but is a long way from the 179.57 buy point. Lucid stock, after more than doubling from late October to the Nov. 17 peak, skidded 5.3% to 48.41, but found support near its 21-day. Fisker (FSR) sank nearly 4% to 18.99. FSR stock’s breakout from a 20.71 buy point has now failed.

China EV startups also weakened. Xpeng stock, which broke out on earnings late last month and hit a nine-month high Wednesday morning, tumbled 5.6% to 48.29. Shares closed just above their 48.08 buy point after rebounding near their 50-day moving average. Li Auto stock, another recent breakout that reversed from a nine-month high on Dec. 1, slumped 3.4% to 33.91. It’s now below a 34.93 entry, though it found support at its 21-day line.

Nio stock, the laggard, skidded 5.5%, losing sight of its 200-day line.

A move by the SEC on a delisting law, which essentially only affects U.S.-listed Chinese stocks, could have helped spur selling in Nio, Xpeng and Li Auto. The SEC announcement comes days after Beijing denied a report that it was gearing up to largely end the structure of most overseas listings of Chinese firms. As a practical matter, it could be years before delistings are an imminent threat.

BYD Sales Keep Soaring

China EV giant BYD reported 91,219 new energy vehicles sold in November, up 241% vs. a year earlier. That includes 46,137 EVs, up 153%, while plug-in hybrids shot up 500% to 43,984. That’s the sixth straight month that BYD has increased EV/hybrid sales by roughly 10,000.

Nio, Xpeng and Li Auto reported strong November deliveries on Dec. 1 but that didn’t help the stocks.

Toyota also reportedly will make a small EV car for the China market, using BYD Blade batteries.

BYD stock was not yet active Friday morning. On Thursday, BYDDF stock dipped 0.6%, still holding near record highs.

BYD stock, which is Hong Kong listed, largely moves during Hong Kong trading. However, the over-the-counter BYDDF stock presumably wouldn’t be affected by delisting concerns. XPEV stock and Li Auto both have a secondary listing in Hong Kong, with Nio soon to join them.

In related news, China ride-hailing giant Didi Global (DIDI) said late Thursday that it will delist from U.S. exchanges and list instead in Hong Kong. Didi came public in late June, but Chinese regulators almost immediately imposed major restrictions on Didi’s operations, part of an overall crackdown on private enterprise, but especially data-centric firms. Didi stock rose early Friday.

Why This IBD Tool Simplifies The Search For Top Stocks

Market Rally Analysis

The stock market rally got a bounce. The Dow Jones rallied back above its 200-day line while the Nasdaq and S&P 500 reclaimed their 50-day lines. The Russell 2000 remains below its 200-day.

A rebound wasn’t a huge a surprise, given the spike in volatility Wednesday.

It’s nice for stocks to go up and close near session highs. But it’s unclear how meaningful Thursday’s action was. After all, the market rebounded Monday following Black Friday’s initial omicron sell-off and volatility surge, but selling quickly resumed. If the major indexes were to fall back through Wednesday’s lows, it would be a very bad sign for the stock market rally.

Market breadth improved Thursday, but has deteriorated over the past few weeks.

There aren’t many good-looking charts right now after the recent whipsaw selling.

Energy and financial stocks bounced back, but are generally damaged. Travel-related stocks were big winners Thursday, but after huge losses in recent weeks.

Wednesday morning’s chip breakouts have largely fizzled, though they aren’t broken per se. Xpeng and Li Auto stock have had a chilly start to December.

Homebuilders and REITs look healthy, but if the market rally turns into a correction they’ll likely come under pressure. Alternatively, if the market rally strengthens and Treasury yields power higher, DHI stock and REITs may lag or even decline.

Software stocks are a mess. While Snowflake (SNOW) rebounded on earnings, many more have extended big sell-offs. DocuSign and ASAN stock are just the latest examples.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

It’s still a market rally, albeit “under pressure,” and not a market correction, so investors don’t need to see a follow-through day. But the general concept — waiting for clear strength before moving seriously into the market — makes sense in the current environment.

One good day doesn’t signal a fundamental shift from the weakening market trend of the past few weeks. It’s better to wait for some follow up. For investors who waited for the mid-October follow-through to confirm the new market rally, there were still several weeks to take advantage of the solid uptrend.

As a practical matter, few stocks are flashing buy signals right now. And could you trust a morning breakout or buy signal to hold up by the close? On the flip side, you can’t count on stocks finding support, even though Apple stock did on Thursday.

It’s also unclear if some of the groups and sectors holding up the best right now would lead if the market revs highs.

Holding onto some long-term winners with overall modest exposure is a sound strategy for now. But overall, investors should still be thinking defensively.

The goal for active investors isn’t to try to make money in all markets, but to take advantage of rallies and minimize losses in corrections. If you want to be a big winner, be a small loser.

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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Dow Jones Futures: Market Rally Pauses As Tesla Dives; Upstart Leads 8 IPO Movers Late With Rivian On Tap

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Dow Jones futures fell slightly late Tuesday, along with S&P 500 futures and Nasdaq futures, as Upstart Holdings (UPST) and COIN stock headlined key earnings overnight. The stock market rally fell modestly as Tesla (TSLA) fell solidly again with the Rivian IPO on tap.




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UPST stock, Coinbase (COIN), FuboTV (FUBO), DoorDash (DASH), Toast (TOST), Unity Software (U), Doximity (DOCS), Global-e Online (GLBE) and Tesla EV rival Nio (NIO).

UPST stock, DoorDash, FuboTV and Unity Software came public in late 2020, while COIN stock, Doximity, Global-e Online debuted this year.

Nio stock, no longer a “new IPO,” began trading just over three years ago.

Most of these stocks have had been big winners, or at least have had strong runs over the past year. But many were big losers overnight, not a great sign for the market rally. Upstart earnings and guidance were strong, but UPST stock plunged about 20% after trading at key levels in recent days. COIN stock tumbled 10% as Coinbase earnings missed as crypto trading fell more than expected. Unity stock and DOCS also sold off hard following mixed results. TOST stock fell solidly while FUBO stock and Global-e did too.

DASH stock, however, soared about 20%. That signals a move back above its 50-day line and more for DoorDash stock.

Nio stock fell slightly after the China EV startup topped views but gave weak guidance.

Several more 2021 IPOs report on Wednesday, including Olaplex (OLPX), Applovin (APP), Monday.com (MNDY), Taskus (TASK) Dutch Bros (BROS) and Affirm Holdings (AFRM).

Rivian IPO

Capping the big week for new issues, the Rivian IPO will likely price Wednesday night, selling 135 million shares. Late Friday, the Amazon- and Ford-backed EV startup raised its expected RIVN IPO price range to $72-$74 a share from $57-$62. At the high end, RIVN stock would have an initial $65 billion valuation.

Rivian began limited deliveries of its R1T electric pickup in September, beating General Motors (GM), Ford (F) and Tesla to market. It’ll launch the large SUV RS1 by year-end. But much of its production focus will be on Amazon.com (AMZN), which has ordered 100,000 Rivian electric vans.

The Rivian IPO comes with Tesla stock pulling back, but after skyrocketing in recent weeks.

Why This IBD Tool Simplifies The Search For Top Stocks

Tesla Stock

TSLA stock tumbled 12% to 1,023.50 on Tuesday, following Monday’s 4.8% drop as CEO Elon Musk signaled that he would sell 10% of his Tesla stock stake. Late Monday, the company disclosed that Kimball Musk, Elon’s brother, sold $109 million worth of TSLA stock on Nov. 5.

But the EV giant has rallied for 11 straight weeks. Tesla stock is just below its 21-day line. It’s still well above a 900.50 cup-base buy point, according to MarketSmith analysis, but has given up the bulk of those gains.

Investors who bought at the 900.50 buy point have a decision to make on whether to take some TSLA profits — if they haven’t already locked in some gains. Earlier Tesla stock investors have a lot more leeway.

Tesla and OLPX stock are on IBD Leaderboard. Tesla, Affirm, Dutch Bros, Unity and UPST stock are on the IBD 50.

The video embedded in this article analyzed the market rally action as well as Tesla, MP Materials (MP) and Dutch Bros stock.

Dow Jones Futures Today

Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures dipped 0.1% and Nasdaq 100 futures declined 0.1%.

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 finally had a down day but didn’t give up much ground. The Dow Jones Industrial Average fell 0.3% in Tuesday’s stock market trading. The S&P 500 index lost 0.35% and the Nasdaq composite declined 0.6%, with TSLA stock and PayPal (PYPL) weighing on both. The small-cap Russell 2000 dipped 0.6%.

The 10-year Treasury yield fell 6.5 basis points to 1.32%, the lowest in several weeks.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 0.8%, while the Innovator IBD Breakout Opportunities ETF (BOUT) off 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) added 0.4%, with many software leaders delivering strong gains Tuesday. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.1%.

SPDR S&P Metals & Mining ETF (XME) gave up 0.75%and Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.3% after Monday’s infrastructure-fueled gains. U.S. Global Jets ETF (JETS) descended 0.5%. SPDR S&P Homebuilders ETF (XHB) popped 1.9%. The Energy Select SPDR ETF (XLE) rose 0.4% and the Financial Select SPDR ETF (XLF) sank 0.55%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) retreated 2.3% and ARK Genomics ETF (ARKG) lost 2.5%. Tesla stock is still the top holding across ARK Invest’s ETFs. Several ARK ETFs own COIN stock.

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Market Rally Analysis

After rising nearly 2,000 points from the early October low, the Nasdaq dipped 95.82 points on Tuesday, ending an 11-day win streak. The action on the stock market rally was perfectly normal and healthy. The Nasdaq is now 5.3% above its 50-day line while the Nasdaq 100 is 5.6% above that level. Both had been above the 6% mark, signaling they are extended.

Yes, a few leaders, notably Tesla stock, pulled back quite a bit. But in the context of huge moves over the past several weeks and months, the charts don’t look seriously damaged.

Ideally, the stock market rally would pause or pull back modestly for a few days or even weeks, letting the moving averages catch up and giving leaders a chance to offer new buying opportunities. If the Nasdaq quickly rebounded, it would be extended almost immediately.

The sell-off in UPST stock, COIN stock and more is worrisome. IPOs have been big winners since the coronavirus crash, putting the “new” in CAN SLIM. If Upstart, Unity stock and more run into trouble, it would be a bad sign for leading stocks and the market rally.

But, it’s just one overnight session for a handful of IPOs. UPST stock, et al. could rebound in Wednesday’s session or in the coming days. Or maybe these specific IPOs are due for a breather, but new issues and growth stocks in general still march higher.

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What To Do Now

The stock market rally is still in good shape. There’s no strong reason to be reducing net exposure right now. But it may not be a great time to be making many new buys. If the market rally pulls back over the next several days, breakouts and early entries will likely struggle. If the market rally perks up over the next few days, how far could it go before flashing serious warning signs.

Tesla stock is a great example of why investors should not buy extended, even with a true market leader. Anyone who bought at one of several proper buy points in the past several weeks is still up solidly or sharply on TSLA stock. But if you bought at Thursday’s top, you’re down 18%.

This is a good time to let your portfolio work for you, while you work on your watchlists.

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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Business

Dow Jones Futures Rally: Tesla Hits $1 Trillion, Donald Trump SPAC Dives; Facebook Earnings Beat

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Dow Jones futures rallied 100 points early Tuesday after Monday’s stock market rally saw Tesla stock surge to all-time highs to hit the $1 trillion milestone. The Former President Donald Trump SPAC dived, but looked to rebound early Tuesday. And Facebook earnings topped estimates late Monday.




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On Monday, the Dow Jones Industrial Average moved up 0.2%. The S&P 500 rose 0.5%, while the Nasdaq led the way, rising 0.9%.

Among the Dow Jones leaders, Apple (AAPL) fell less than 0.1% in today’s stock market, while American Express (AXP), Goldman Sachs (GS) and JPMorgan Chase (JPM) eyed new buy points in the current rally.

Tesla (TSLA) surged nearly 13% Monday to hit more record highs.

Among companies reporting earnings, Facebook (FB) beat earnings targets late Monday, while Advanced Micro Devices (AMD) and Microsoft (MSFT) will report after the close Tuesday.

Among the top stocks to buy and watch, Cleveland-Cliffs (CLF), Nvidia (NVDA) and Olaplex (OLPX) are in or near new buy zones.

Microsoft, Olaplex and Tesla are IBD Leaderboard stocks. Nvidia was featured in this week’s Stocks Near A Buy Zone story, while Cleveland-Cliffs was Friday’s IBD Stock Of The Day.

Dow Jones Futures Today

Ahead of the stock market open Tuesday, Dow Jones futures rose 0.3% vs. fair value, while S&P 500 futures rallied 0.4%. Nasdaq 100 futures gained 0.55% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

U.S. Stock Market Today Overview
Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35743.78 +66.76 +0.19
S&P 500 (0S&P5) 4566.92 +22.02 +0.48
Nasdaq (0NDQC ) 15226.71 +136.51 +0.90
Russell 2000 (IWM) 229.65 +2.24 +0.99
IBD 50 (FFTY) 50.19 +0.80 +1.62
Last Update: 4:42 PM ET 10/25/2021

Among exchange traded funds, Innovator IBD 50 (FFTY) moved up 1.55% Monday. Nasdaq 100 tracker Invesco QQQ Trust (QQQ) gained 1%. And the SPDR S&P 500 ETF (SPY) ascended 0.5%.

Stock Market Rally

The stock market rally strengthened Monday, as the Dow 30 and S&P 500 notched all-time highs, while the Nasdaq recovered from Friday’s moderate loss.

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For daily stock market commentary, be sure to check out IBD’s The Big Picture.

On Friday, The Big Picture commented, “The Nasdaq and S&P 500 made it three straight weekly gains. In the past week, the Nasdaq added 1.3% and the S&P 500 rose nearly 1.7%. For the month of October, the Nasdaq is up 4.4% and the S&P 500 up 5.5%. Friday’s distribution day was a stumble for the stock market, but nothing to throw it off its new uptrend.”

Five Best Dow Jones Stocks To Watch Now

Dow Jones Stocks To Buy And Watch: Amex, Goldman, JPMorgan

American Express ended Monday in the 5% buy area above a 178.90 buy point in a cup with handle, according to IBD MarketSmith chart analysis. Shares lost 2.55% Monday.

Goldman Sachs is within striking distance of a 420.86 buy point in a flat base following Monday’s 0.1% rise. Meanwhile, JPMorgan remains at the top of the 5% buy zone past a 163.93 entry in a cup with handle amid a recent bounce off the 50-day moving average. The 5% buy area tops out at 172.13. JPM stock was down 0.5% Monday.

American Express and Goldman Sachs both have strong relative strength lines. A strong relative strength line at the start of a new uptrend is indicative of a potential market leader.

Dow Jones Earnings: Microsoft

Software giant Microsoft fell 0.3% ahead of Tuesday’s earnings results. Shares remain in buy range above its latest buy point. The flat base had a 305.94 buy point and the 5% buy zone tops out at 321.24.

The blue chip will report earnings late Tuesday. Analysts expect the company to earn $2.08 per share on revenue of about $44 billion.

Facebook Earnings

Late Monday, social media giant Facebook reported its quarterly earnings results. The company earned $3.22 per share on sales of $29 billion, topping earnings forecasts but missing top-line estimates. Facebook shares gained almost 3% in premarket trade.

On Friday, Facebook shares tumbled more than 5% in the wake of disappointing revenue and guidance from rival Snap (SNAP). Facebook stock is testing its long-term 200-day moving average. Shares reversed from early losses to rally 1.3% Monday, ending the session just above its long-term 200-day line.

Stocks To Buy And Watch: AMD, Cleveland-Cliffs, Nvidia, Olaplex

Advanced Micro Devices broke out past a 114.59 buy point out of a double-bottom base last week — according to IBD MarketSmith chart analysis — and is now extended following Monday’s 2.1% rise. Earnings are due out Tuesday after the close.

According to IBD Stock Checkup, AMD boasts a perfect 99 IBD Composite Rating. The IBD Composite Rating identifies stocks with a blend of strong fundamental and technical characteristics.

Friday’s IBD Stock Of The Day, Cleveland-Cliffs, is rapidly nearing a 26.61 buy point in a cup base amid Monday’s 6.6% climb. Meanwhile, the stock triggered a new entry during Friday’s sharp move back above its 50-day moving average. Per Stock Of The Day analysis, “The high-volume move past its 50-day line, along with a break above the downsloping trend line from CLF stock’s Aug. 13 intraday high of 26.51, offered investors an early entry point.”

IBD SwingTrader stock Nvidia is trying to break out past a cup-base’s 230.53 buy point for a second straight session. NVDA shares briefly topped the entry Friday before closing beneath it. The stock rallied nearly 2% Monday, closing just above the buy point. Positively, the stock’s relative strength line is near new highs, reaffirming the stock’s leadership status.

IBD Leaderboard stock Olaplex closed Monday in the 5% buy area past an IPO base entry at 27.84. Shares reversed nearly 3% lower Monday, but remain above the entry. The buy area tops out at 29.23. Per Leaderboard analysis, it also cleared an aggressive trendline entry near 27.

Join IBD experts as they analyze leading stocks in the new stock market uptrend on IBD Live

Donald Trump SPAC Dives

Digital World Acquisition — a special-purpose acquisition company, or SPAC, merging with Trump Media & Technology Group — dived 11% Monday, reversing lower and giving back a part of Friday’s 107% surge. DWAC stock rallied about 3% in premarket trade. Last week, former President Trump announced plans to launch a social media company named Truth Social. There will also be a subscription-based video-on-demand service to be called TMTG+.

A SPAC, also known as a blank-check company, is an alternative to a traditional initial public offering. These blank-check companies have no assets beyond cash. They trade on stock exchanges and then merge with private companies, taking those companies public.

Tesla Stock

Tesla stock surged 12.7% Monday, hitting a $1 trillion valuation after car rental giant Hertz ordered 100,000 Tesla vehicles for its fleet. Meanwhile, Morgan Stanley boosted its price target on Tesla from 900 to 1,200, citing higher volume expectations after the company’s third-quarter report.

On Sunday, Tesla Chief Executive Elon Musk tweeted that the company’s full self-driving software, FSD Beta 10.3, was “seeing some issues,” so the company was rolling back to Beta 10.2. But then early Monday, he tweeted that FSD Beta 10.3.1 was “rolling out now.”

The stock hit new highs Monday, trading as high as 1,045.02. TSLA shares are sharply above a 764.55 buy point in a cup with handle, as well as earlier entries at 700.10 and 730.

Dow Jones Leaders: Apple

Among the top Dow Jones stocks, Apple fell 0.1%, adding to Friday’s 0.5% loss.

A new cup base is forming that has a 157.36 buy point, according to IBD MarketSmith chart analysis. Be on the lookout for a potential handle to offer a more risk-optimal entry.

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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