Dow Jones futures rose on Thursday, along with S&P 500 and Nasdaq futures. Tesla bounced solidly ahead of the open.
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The stock market took further losses on Wednesday as rising Treasury yields, Apple’s iPhone woes and rising Covid cases in China added to selling pressure across major indexes.
The Nasdaq is near its bear market low, setting its worst close in more than two years. The Dow Jones down a key level.
Litter (AAPL) fell again, setting a new bear low. AAPL shares are at risk of falling below a $2 trillion valuation. tesla (TSLA), which also set another bear market low, rallied modestly. But that just wiped out a big weekly loss.
Energy stocks have fallen as oil and natural gas prices have fallen, with natgas and coal producers hardest hit.
But several energy stocks are showing resilience. Exxon Mobil (XOM), chevron (CVX), Schlumberger (SLB), valaris (VAL) and, to some extent, First Solar (FSLR) are holding up reasonably well.
But whether these stocks make real progress from here depends a lot on whether unstable energy prices rise.
CALM Earnings
After closure, egg producer cal maine (CALM) reported rising earnings that slightly missed fiscal second-quarter views. CALM shares were down 5% in extended trade, even as revenue rose 110% and the egg producer announced a dividend of $1.35 a share. Shares fell 2.5% to 62.19 in Wednesday’s regular session. That pulled CALM shares back into the 5% chase zone from a buy point of 60.11. But Cal-Maine could open Thursday below that entry.
Dow Jones Futures Today
Dow Jones futures advanced 0.2% from fair value. S&P 500 futures were up 0.4% and Nasdaq 100 futures were up 0.8%, helped by TSLA shares.
The 10-year Treasury yield fell 1 basis point to 3.88%.
Crude oil futures fell 1%.
Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate to actual trading in the next regular stock market session.
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stock market wednesday
The stock market continued to slide, with all major indexes down more than 1%.
The Dow Jones Industrial Average was down 1.1% in Wednesday’s stock market trades. The S&P 500 index fell 1.2%. The Nasdaq compound gave up 1.35%. The small-cap Russell 2000 gave up 1.6%.
US crude oil prices fell 0.4% to $79.23 a barrel on Wednesday. Natural gas futures fell 5.8%.
The 10-year Treasury yield rose 3 basis points to 3.89%. This represents an increase of 49 basis points from the low of 3.4% on Dec. 7, with almost all of the gain since Dec. 15.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) was down 1.1%. The VanEck Vectors Semiconductor ETF (SMH) fell 1.3%. Reflecting stocks from more speculative histories, the ARK Innovation ETF (ARKK) fell 0.5%, setting a new five-year low. The ARK Genomics ETF (ARKG) was down 0.6%, just above its June low. Tesla shares are still a significant stake in Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) was down 4% and the Global X US Infrastructure Development ETF (PAVE) was down 1.75%. The US Global Jets ETF (JETS) was down 2.4%. SPDR S&P Homebuilders ETF (XHB) fell 2%. The Energy Select SPDR ETF (XLE) shed 2.2%, with XOM and CVX equities easily the top components and SLB equities coming in third. The Financial Select SPDR ETF (XLF) was down 0.35%. The Health Care Select Sector SPDR Fund (XLV) was down 0.65%.
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apple stock
Apple shares fell 3.1% on Wednesday to 126.04, an 18-month low. TrendForce cut its 2022 iPhone shipment forecasts due to the recent lockdowns at Foxconn’s base in Zhengzhou. It also cut its forecast for early 2023 shipments, citing Foxconn’s labor shortage.
Tech titan Dow Jones is on course for its sixth consecutive weekly loss and its worst monthly loss in four years. AAPL’s stock valuation closed at $2.005 trillion, threatening to drop below $2 trillion.
AAPL shares rose 1% on Thursday.
Tesla stock
Tesla rose 3.3% to 112.71 after falling 11.4% on Tuesday, ending a seven-day losing streak. The giant EV is still down nearly 15% on the month. Late Wednesday, Morgan Stanley analyst Adam Jonas cut his TSLA stock price target to 250, but also cut his fourth-quarter delivery target to just 399,000 EVs.
Tesla was up 4% in premarket trade.
Energy stocks to watch
Exxon shares fell 1.6% to 108.38, below the 50-day line after recently resuming that key level. XOM shares have a buy point of 114.76 from a flat basis above the prior consolidation. But a move above Tuesday’s high of 110.47 could offer an early entry.
Chevron shares look a lot like Exxon Mobil. Shares fell 1.5% to 176.98, dropping below 50 days. CVX shares have a flat base close to a prior consolidation, with a buy point of 189.78, according to MarketSmith analysis. Investors can use 180.33, just above Tuesday’s high, as an early entry into CVX shares.
Shares in Schlumberger fell 1.7% to 52.60, finding support near the 10-week line. SLB stock has a 16% deep consolidation above/beside a deep cup base. The official buy point is 56.14. But investors can use 54.28, just above the Dec. 5 high of 54.18, as an early entry into SLB stock.
Valaris shares fell 2.6% to 64.74, rising slightly from a test of the 10-day, 21-day and 50-day lines. The offshore contract drilling company has a buy point of 70.27 of a 17% deep cup base above a standard deep cup with cable. The buy point is 70.27. Investors can use 67.75, just above Tuesday’s high, as an early entry. This can turn into a proper control point of purchase in a few days.
First Solar fell 2.7% to 146.17, losing more ground off the 50-day line, but exited from an intraday low of 142.35. The FSLR stock needs some work and could easily break from this point on. Ideally, other solar stocks, which are hit even harder, will also improve. But watch to see if First Solar can recover its 50-day and 21-day lines. There may be a trend line, or perhaps a move above the Dec 21st high of 162.20, to offer an early entry. FSLR shares could see a new base late next week.
Market analysis
The stock market had another tough session on Wednesday.
The Dow Jones, which made gains on Tuesday, could not resist on Wednesday. The Dow closed below its 50-day rising moving average for the first time since Oct. 21.
The S&P 500 continued to decline from its 50-day ascending cross. The benchmark held above last Thursday’s lows but ended with its worst close since Nov. 9. The best performers of the S&P 500, generation (GNRC) and Tesla stocks, were the S&P 500’s biggest losers in 2022. Not exactly inspiring.
The Russell 2000 chipped off Thursday’s low to hit its lowest level in two months.
The Nasdaq composite is down to just 135 points from the intraday low of the Oct. 13 bear market. The high-tech index ended with its weakest close since July 2020. Shares in Apple and a host of other rising names fell.
Until there is clarity on the Fed’s rate end game and economic outlook – including the rise of Covid in China – the stock market is likely to be shaky at best. And the major indexes are doing much worse than that right now.
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What to do now
The stock market is not doing well. While certain sectors are holding up better than others, it’s hard for any stock to make much progress. Sectors and individual stocks can also deteriorate quickly.
Investors may have small positions in some promising sectors, but should avoid growth for now. There’s nothing wrong with being all cash. Keeping your financial and mental capital intact is critical.
But work on your watch lists. Many stocks across a variety of sectors are close to buying points, or could be quickly if the market recovers. Focus on stocks with strong relative strength and holding key levels. Don’t exclude resilient names that don’t already have a clear point of purchase.
If you’ve had a bad year, it’s not going to make up for the last two trading days of 2022 with the market struggling. Learn from your mistakes and prepare for the next sustained market recovery in 2023.
Read The Big Picture every day to stay in sync with market direction and key stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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