Dow Jones futures, S&P 500 futures and Nasdaq futures were little changed Wednesday morning after the Bank of Japan unexpectedly maintained its dovish stance. Shares of United Airlines and Moderna rose on the news. Microsoft is likely to make significant layoffs on Wednesday.
x
The stock market rebound was relatively quiet despite the Dow’s sharp drop.
tesla (TSLA) continued to bounce off bear market lows, up 7.4% to 131.49. The stock price is slightly higher than the 21-day line, but still far below the 50-day line, especially the 200-day line. Tesla’s China EV registrations rebounded in the latest week after a recent sharp price cut. But it may be a while before investors get a clear picture of the impact of Tesla’s global price cuts and demand. Tesla’s fourth-quarter earnings report will be released on January 25.
Pausing for a few days will allow more stock to build. This includes stocks that rallied from early entry and may use the handle.
Chevron (CVX), Vertex Pharmaceuticals (VRTX) and TJX Cos. (TJX) are three stocks to play right now.
But in general, investors should be patient.
Bank of Japan holds steady
The Bank of Japan kept monetary policy unchanged. The Bank of Japan maintained its policy of keeping interest rates and Japan’s sovereign debt close to 0%. In December, the Bank of Japan effectively raised interest rates, bringing the 10-year JGB yield to 0.5%. This has fueled speculation that the BOJ will end its zero interest rate policy entirely.
The BOJ’s decision to hold steady sent Dow futures, U.S. Treasury yields and the dollar volatile.
main benefit
united airlines (UAL) and Interactive Brokers (IBKR) reported Tuesday night.
United Airlines’ earnings handily beat fourth-quarter estimates, while the airline also gave bullish guidance. UAL stock rose slightly after hours. Shares fell 0.9 percent to 51.20 on Tuesday, but after eight straight sessions of sharp gains.
Earnings from Interactive Brokers also topped expectations. IBKR shares rose slightly overnight. Shares fell 2 cents to $77.19 on Tuesday, operating from an $80.95 buy point at the bottom of the double bottom. Friday’s move above the 50-day line provided an early entry point, but just ahead of gains.
Charles Schwab (SCHW) and trucking companies JB Hunter Transport Services (JBHT) expires early Wednesday. SCHW shares edged up 0.6 percent to 83.49 on Tuesday, in buy territory. JBHT shares fell 0.3% to 176.29, between the 50-day and 200-day lines.
UAL stock sits at the IBD 50. VRTX stock is in the IBD Big Cap 20.
Modern RSV Vaccines
Moderna reported strong results for its respiratory syncytial virus (RSV) vaccine late Tuesday. The biotech’s RSV vaccine uses its mRNA technology. MRNA stock rose steadily in extended trading, pointing to a strong rebound from near its 10-week line. Moderna RSV Vaccine Follows Positive RSV Results Pfizer (PFE) and GlaxoSmithKline (GlaxoSmithKline).
Microsoft layoffs looming
Simultaneously, Microsoft Bloomberg quoted sources as saying that Microsoft ( MSFT ) could announce new job cuts as early as Wednesday. The level of layoffs could be “significantly higher” than previous layoffs. Sky News reported that the Dow Jones software giant may cut 5% of its workforce, or 11,000 jobs. In October, Microsoft cut about 1,000 jobs.
MSFT shares rose 0.5 percent to 240.35 on Tuesday, their seventh straight gain, just below their 50-day moving average. The Microsoft benefit is due on January 24th.
The video embedded in the article reviews CVX stock, Eli Lilly (LLY) and free market (Merry).
Dow Jones Futures Today
Dow Jones futures were little changed compared to fair value. S&P 500 futures rose 0.1%, while Nasdaq 100 futures rose 0.15%. Futures were slightly lower ahead of the BOJ announcement.
The 10-year government bond yield fell 5 basis points to 3.48%, reversing lower on the Bank of Japan’s decision.
The dollar rose against the yen.
Crude oil prices rose slightly.
Keep in mind that overnight moves in Dow futures and elsewhere don’t necessarily translate into actual trading during the next regular stock market session.
Join IBD experts as they analyze actionable stocks in a stock market rally on IBD Live
stock market rebound
Stocks posted a mixed rally Tuesday, showing generally modest intraday volatility.
The Dow Jones Industrial Average fell 1.1% in Tuesday’s stock market trading, but that was largely due to Goldman Sachs (GS) and traveler (TRV) weighs blue chips.The S&P 500 fell 0.2%, with Tesla shares and Morgan Stanley (MS) top performer. The Nasdaq Composite rose 0.1%. The mini-Russell 2000 edged down 0.1 percent.
U.S. crude edged up 0.4% to $80.18 a barrel, closing above $80 for the first time in two weeks. Crude oil futures hit $81.23 intraday.
The 10-year Treasury yield rose 2 basis points to 3.53%.
ETF
Among growth ETFs, the Innovator IBD 50 ETF (FFTY ) fell 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) edged up 0.3%, with Microsoft stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) rose 0.6%.
The ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) rose 2.9% and ARK Genomics ETF (ARKG) 1.8%, respectively, reflecting more speculative stocks, both extending gains from their 50-day lines and heading toward their 200-day levels. moving average. TSLA stock remains the top holding in Ark Invest’s ETF, with Cathie Wood adding more shares in recent weeks.
The SPDR S&P Metals & Mining ETF (XME) fell 1%. The US Global Jets ETF ( JETS ) edged up 0.4%, with UAL shares heavily held. The SPDR S&P Homebuilders ETF (XHB) fell 0.8%. The Energy Select SPDR ETF (XLE), which holds mostly CVX shares, rose 0.2%. The Financial Select SPDR ETF (XLF) fell 0.7%. The Healthcare Select Sector SPDR Fund ( XLV ) fell 0.5 percent.
The five best Chinese stocks to watch right now
stocks in the buy zone
Chevron rose 1.65% to 180.49, breaking through its 50-day line and a short-term high of 180.23. According to MarketSmith analysis, CVX stock has a basic buy point of $189.78.
VRTX stock rose 3.7% to 311.58, bouncing back above its 50-day line in above-average trade. This provided an early entry point for Vertex with a flat-bottom buy point at $324.85. VRTX stock also regained its previous buy point at 306.05. The biotech stock hit a record 324.75 on Dec. 8, but then fell to its 200-day line by the end of the year. Vertex stock bounced back from there last week. Investors can wait and see whether the stock price will stagnate near the 50-day line.
TJX shares closed up 2 cents at 81.55 after bouncing off a test of the 81.29 flat-bottom buy point that cleared on Jan. 6. Shares have since consolidated in buy territory. The 5% deep flat bottom is just above a long 31% deep cupped integration.
Market rebound analysis
The stock market rebound has been relatively quiet after last week’s sharp gains.
The S&P 500 briefly returned to 4,000 and retreated, but only held above its 200-day moving average.
The Russell 2000 , which broke above its 50-day and 200-day moving averages last week, retreated after coming within 1 percent of its November high.
The Nasdaq Composite is holding above its 50-day line, with the December high and 200-day line acting as major resistance areas on the horizon. A lot of the strength Tuesday came from Tesla, chips and defeated cloud software names.
The Dow fell sharply, mostly because of GS stock and Travelers. The blue-chip index is comfortably above its moving average, with only the December high to watch.
The market rally still looks healthy. Many trends, including Nasdaq advance-decline lines and new highs and lows, have improved over the past few sessions.
A pause or a moderate pullback here is normal, even healthy. A decisive break of the S&P 500 below its 200-day line, and possibly its 50-day line, would be even more worrisome. On the bright side, the late 2022 high is the next key level.
While Chevron, TJX, and Vertex, among a few other names, are arguably viable, there isn’t much to buy right now.Some stocks that looked promising Tuesday morning, such as monster drink (MNST), withered by the close.
Many stocks have risen in the past few sessions, such as Mepac (MEDP) and MercadoLibre. Suspension would allow many of these names to form handles or shelves. At the same time, other stocks also appeared.
Time the Market with IBD’s ETF Market Strategy
what to do now
Patience is very important. With the market bracing for a possible pause, and not many stocks flashing buy signals, resist the temptation to buy extended stocks. If this uptrend works, you have a much safer chance. Include the most recent popular stocks if the table handles or hits a support level.
Be sure to run your leading stock screen to find stocks that show promising action.
If the market offers more stocks flashing buy signals, you can gradually gain exposure over time. Aside from various economic and Fed headwinds, the earnings season is well underway, and the upcoming two weeks may be the heaviest releases yet.
Read The Big Picture daily to stay abreast of market direction and leading stocks and sectors.
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