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Dow Jones Futures: Bank of Japan Surprises; Tesla jumps

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Dow Jones futures were little changed early Wednesday, along with S&P 500 and Nasdaq futures after the Bank of Japan unexpectedly remained dovish. Shares in United Airlines and Moderna rose on the news. Big job cuts at Microsoft could come on Wednesday.




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The stock market rally had a relatively quiet session despite a solid drop in the Dow.

tesla (TSLA) continued its rebound from bear market lows, jumping 7.4% to 131.49. Stocks moved slightly above the 21-day line but remain well below the 50-day line and especially the 200-day line. Tesla’s EV registrations in China have surged in the last week after major recent price cuts. But it may be some time before investors get a clear picture of the impact of Tesla’s global price cuts and demand. Tesla’s earnings for the fourth quarter will be released on January 25th.

A break of a few days would allow for more stock to be built up. This includes actions that have recovered from initial entries and can use grips.

chevron (CVX), Vertex Pharmaceuticals (VRTX) and TJX Cos. (TJX) are three actions that are actionable now.

But overall, investors should be patient.

Bank of Japan remains stable

The Bank of Japan kept its monetary policy unchanged. The BoJ maintained its policy of keeping rates and Japanese sovereign debt close to 0%. In December, the BoJ effectively rallied, letting the Japanese 10-year yield rise to 0.5%. This raised speculations that the Bank of Japan would end the zero rate policy entirely.

The BoJ’s decision to stay the course shook Dow futures, Treasury yields and the dollar.

main earnings

united airlines (UAL) and interactive brokers (IBKR) reported late on Tuesday.

United Airlines earnings comfortably topped fourth-quarter views, while the carrier also gave bullish guidance. Shares in UAL rose modestly after hours. Shares fell 0.9% to 51.20 on Tuesday, but after a sharp eight-session rally.

Interactive Brokers earnings also beat views. IBKR shares rose slightly overnight. Shares fell 2 cents to 77.19 on Tuesday, working from an 80.95 buy point on a double basis. Friday’s change over the 50-day line offered an early entry but just short of gains.

Charles Schwab (SCHW) and transport company JB Hunt Transport Services (JBHT) are due on Wednesday. Shares in SCHW rose 0.6% to 83.49 on Tuesday, remaining in a buy zone. JBHT shares fell 0.3% to 176.29, between the 50-day and 200-day lines.

UAL stock is at IBD 50. VRTX stock is at IBD Big Cap 20.

Modern RSV Vaccine

Moderna on Tuesday reported strong results for the respiratory syncytial virus, or RSV, vaccine. Biotech’s RSV vaccine uses its mRNA technology. MRNA shares rose solidly in extended trading, signaling a strong bounce around the 10-week line. The Moderna RSV vaccine follows positive RSV results from pfizer (PEF) and GlaxoSmithKline (GSK).

Microsoft job cuts loom

About that, Microsoft (MSFT) could announce further job cuts as early as Wednesday, Bloomberg reported, citing sources. The cuts could be “significantly larger” than in previous layoffs. Sky News reported that software giant Dow Jones could cut up to 5% of staff, which would represent 11,000 jobs. In October, Microsoft cut about 1,000 jobs.

MSFT shares rose 0.5% to 240.35 on Tuesday, its seventh consecutive advance and just below the 50-day line. Microsoft earnings are due January 24th.

The video embedded in the article analyzed CVX’s actions, Eli Lilly (LLY) and Free market (MELI).

Dow Jones Futures Today

Dow Jones futures were little changed from fair value. S&P 500 futures were up 0.1% and Nasdaq 100 futures were up 0.15%. Futures were slightly lower ahead of the BoJ’s announcement.

The 10-year Treasury yield fell 5 basis points to 3.48%, reversing down on the Bank of Japan decision.

The Dollar bounced against the Japanese Yen.

Crude oil prices rose slightly.

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.


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


stock market rally

The stock market rally had a mixed session on Tuesday, generally showing modest intraday swings.

The Dow Jones Industrial Average was down 1.1% in Tuesday’s stock market trades, but that was largely due to Goldman Sachs (GS) and travelers (TRV) weighing in blue chips. The S&P 500 index fell 0.2%, with shares of Tesla and morgan stanley (MS) top performers. The Nasdaq composite advanced 0.1%. The small-cap Russell 2000 was down 0.1%.

US crude oil prices rose 0.4% to $80.18 a barrel to close 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%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) was down 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) was up 0.3%, with Microsoft shares the main share. The VanEck Vectors Semiconductor ETF (SMH) was up 0.6%.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) was up 2.9% and the ARK Genomics ETF (ARKG) was up 1.8%, both extending gains from the 50-day line and advancing toward their 200-day averages. days. TSLA stock remains the top stock in Ark Invest’s ETFs, with Cathie Wood adding many more shares in recent weeks.

The SPDR S&P Metals & Mining ETF (XME) was down 1%. The US Global Jets ETF (JETS) was up 0.4%, with UAL shares higher. SPDR S&P Homebuilders ETF (XHB) was down 0.8%. The Energy Select SPDR ETF (XLE) was up 0.2%, with CVX shares the main holding. The Financial Select SPDR ETF (XLF) shed 0.7%. The Health Care Select Sector SPDR Fund (XLV) was down 0.5%.


Five best Chinese stocks to watch right now


Stocks in buy zones

Chevron advanced 1.65% to 180.49, moving above the 50-day line and a short-term high of 180.23. CVX shares have a flat basis buy point of 189.78, according to MarketSmith analysis.

Shares in VRTX rose 3.7% to 311.58, rebounding above the 50-day line in above-average trading. This provides an early entry for Vertex, which has a flat base buy point of 324.85. VRTX shares also rebounded from an earlier buy point of 306.05. Biotech reached a record high of 324.75 on Dec. 8, but dropped to the 200-day line later in the year. Vertex shares rallied last week. Investors can wait to see if the stock breaks out at the 50-day line.

TJX shares closed up 2 cents at 81.55, rebounding intraday from an 81.29 flat base offset buy point on Jan. 6. Since then, the stock has been consolidating in the buy zone. The 5% depth flat base is just above a long 31% depth cup consolidation.

Market Rally Analysis

The stock market rally had a relatively quiet session after last week’s big gains.

The S&P 500 briefly retook the 4,000 level and pulled back, but only holding above the 200-days.

The Russell 2000, which breached its 50-day and 200-day lines last week, pulled back after coming within 1% of its November highs.

The Nasdaq composite is holding above its 50-day line, with December highs and the 200-day line as major areas of resistance on the horizon. Much of Tuesday’s strength came from defeated Tesla, chips and cloud software names.

The Dow fell solidly, particularly in GS and Travelers stocks. The blue chip index is comfortably above its moving averages, with only the December highs to watch.

The market recovery still looks healthy. A number of trends, including the Nasdaq advance-decline line and new highs vs. minimum, improved in the last sessions.

A modest pause or retreat here would be normal or even healthy. The S&P 500 decisively breaking below the 200-day line, perhaps undercutting the 50-day line, would be more worrying. On the upside, the late 2022 highs are the next important level.

While Chevron, TJX and Vertex and a few other names are arguably actionable, there’s not much to buy right now. Some stocks that looked promising on Tuesday morning, such as monster drink (MNST), withered towards the end.

Many stocks have already risen in recent sessions, such as Medspace (MEDP) and Free Market. A break would allow many of these names to form handles or shelves. Meanwhile, other stocks are coming into play.


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What to do now

Patience is important. With the market ready, possibly on pause, and not many stocks flashing buy signals, resist the temptation to buy extended stocks. If this uptrend works out, you have safer opportunities ahead. This includes recently hot stocks if the form handles or touches support levels.

Definitely run your leading stock screens to find the ones that are showing promising stocks.

If the market offers more stocks flashing buy signals, you can gradually expose over time. Aside from a variety of economic and Fed crosscurrents, earnings season is underway, with the next two weeks likely to be the heaviest releases.

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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