Dow Jones Futures: As Fed Hawks Speak This, Market Rallies Back; Tesla Rival Soars

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Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. After recovering from large morning losses, the stock market rallied to close mixed on Thursday after two Fed officials who were hawkish eased their rate hike fears.




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Dow Jones component UnitedHealth Group (UNH) reports before Friday’s market open, kicking off quarterly earnings for health insurers and medical services firms broadly. UNH stock rose 0.2% from its 50-day level Thursday and closed at 502.43, close to a 518.90 buying point.

Bank giants Wells Fargo (WFC) and Citigroup (CAlso, ) were reported before the open. WFC stock, Citigroup and Citigroup are both in long-term downtrends. Citi stock plunged to its lowest level since late 2019 on Thursday due to weaker than expected earnings. JPMorgan Chase (JPM) and Morgan Stanley (MS).

Meanwhile, Dollar Tree (DLTR), BJ’s Wholesale (BJ( Lantheus Holdings (LNTHMcKesson (MCK) had a bullish shakeout.

China is a battery and electric vehicle giant BYD (BYDDFAlthough a surge in bullish earnings guidance led to a rise in, it is still down sharply this week due to rumors that Warren Buffett’s Berkshire Hathaway may be selling some of its BYD stock shares. China EV startup Li Auto (LI) remains actionable, while Tesla (TSLA) takes between two key moving averages.

Lantheus stock is available IBD Leaderboard. DLTR stock, Li Auto are both on SwingTrader. Dollar Tree, Lantheus (BJ’s Wholesale), McKesson. UnitedHealth and LI stock all have the same address IBD 50. MCK stock, Dollar Tree are also available. IBD Big Cap 20.

The article’s video embed discusses Thursday’s market activity and is analyzed. Apple (AAPL), Costco Wholesale (COST) and BJ’s stock.

Fed Hawks Show a Little Dove

Christopher Waller, a member of the Fed Board of Governors and James Bullard of St. Louis Fed President, were two Fed policymakers who are most vocal about front loading rate hikes. They lowered their expectations Thursday of a 100 basis-point rate increase later this month. After the June CPI report’s hot headlines and Raphael Bostic, Atlanta Fed President, declaring that “everything was in play”, Wednesday saw a surge in hopes of a full-point rate hike.


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Waller stated Thursday that 75 basis point is still his “base case for a rate increase at the July 26-27 meeting.” He said “markets may be a little ahead” on 100 basis points but he did not rule out a “larger move.”

Bullard said to Nikkei he supports a 75 basis-point move that would bring down the fed funds rate. He indicated that more tightening would be necessary, but that “we can assess” over the course of the year.

The producer price index unexpectedly rose in June, registering a record 11.3% increase compared to one year ago. Core inflation fell more than anticipated. Notably, core PPI increased 0.4% in May vs. May’s 0.7% increase. This was in contrast with core CPI which is experiencing accelerating month to month gains.

Markets now expect a 57% chance that Fed will raise rates by $75 basis points. From 8% on Tuesday, Wednesday’s odds of a full-point rise jumped to 80%.

Dow Jones Futures Today

Dow Jones futures increased 0.1% vs. fair values. S&P 500 futures advanced 0.1%. Nasdaq 100 futures rose 0.2%.

Remember, overnight action is possible Dow futuresTrading in one place doesn’t always translate to trading in another. stock market session.


IBD Live experts will be analyzing actionable stocks during the stock market rally.


Stock Market Rally

The weak earnings of JPMorgan and fresh inflation fears caused a tumble in the stock market Thursday morning. While key indexes finished lower than expected, they still reached their highest levels for the day.

The Dow Jones Industrial Average was down 0.5% in Thursday’s close Stock market trading. The S&P 500 index dipped 0.3%. The Nasdaq composite managed a small gain. Russell 2000, a small-cap Russell 2000, lost 1%.

U.S. crude oils prices dropped 0.5% to $95.78/barrel, not far from intraday lows but still below April’s lowest close. Oil futures plunged more than 1 percent, continuing a steep decline.

Although the 10-year Treasury yield rose 6 basis point to 2.96%, it closed near session lows. The two-year yield lost big gains and fell 1 basis points to 3.13%. The one-year Treasury yield dropped 3 basis points, to 3.18%. Although the yield curve remains inverted between the 1-year and 10-years, it is becoming less so.

ETFs

The list of Best ETFsThe Innovator IBD50 ETF is also available.FFTY) climbed 0.45%, while the Innovator IBD Breakout Opportunities ETF (BOUT) sank 0.5%. The iShares Expanded Software Sector ETF (IGV) sank 0.9%. VanEck Vectors Semiconductor ETFSMH) popped 2.1%, with Taiwan Semiconductor (TSM) earnings and guidance lifting the chip sector.

SPDR S&P Metals & Mining ETF (XME) slumped nearly 3% and the Global X U.S. Infrastructure Development ETF (PAVE) fell 0.6%. U.S. U.S.JETS) descended 0.7%. SPDR S&P Homebuilders ETF (XHB) retreated 1.1%. The Energy Select SPDR ETFXLE) and the Financial Select SPDR ETF (XLF) both lost 1.9%. SPDR Fund for Health Care Select Sector (XLV) edged down 0.3%. UNH stock is an important component of XLV.

ARK Innovation ETF (ARK Innovation ETF) is a reflection of more-speculative stock stories.ARKK) fell 2.1% and ARK Genomics ETF (ARKG) 1.8%. Ark Invest’s top holding is Tesla stock. Cathie Wood’s Ark also holds some BYD stocks.


Five of the Best Chinese Stocks to Watch Now


Stocks Close to Buy Points

Dollar Tree stock increased 1.7% to 168.76. This pushed DLTR stock up above 166.45 cup-with-handleBuy point. The shares of the dollar store giant are 7.8% higher than their 50-day average. The Relative strength lineAccording to, the blue line at the top of the charts is indicating that, the blue line, has reached new highs over the past few weeks. Analysis of the market.

BJ’s stock climbed 2.95% to 70.16, just under a 71.10 double-bottomBuy point. The trendline was downward-sloping, which allowed for early entry. Volume was very low while BJ stock is 14% above its 50-day line. This should give investors some cause for concern. The ideal scenario is for the membership warehouse chain to consolidate at current levels and perhaps find a handle. BJ’s stock has hit new highs in the RS line.

LNTH stock rose 0.7% to 67.91. This is a rebound once more from its 50-day mark. Lantheus stock was actionable, even though it didn’t surpass Friday’s intraday high at 69.08. LNTH stock should be able to build a solid base with a 73.88 this week Buy Point.

McKesson stock started poorly Thursday. It fell below the 50-day mark to 315.78 intraday. However, shares recovered to close 0.4% higher at 362.55. MCK stock currently has a score of 340.04 flat-baseBuy Point, however investors could use 335.47 to enter early, just above Monday’s intraday high.

BYD Stock Spikes

Thursday’s announcement by the EV giant was that it expected first-half net profits to rise 139%-207% over a year ago in local currency terms of 2.8 billion-3.6 million yuan ($533million). Profit should soar to 578%-795%, excluding non-recurring gains or losses.

BYD stock surged 8.4% to 37.71. This rebounded back above the 50 day line after finding support at Wednesday’s 200-day. The shares are still falling sharply for this week. BYD stock dropped 11.3% on Tuesday, fueled by rumors that Buffett might be looking to sell his entire stake in the electric vehicle manufacturer. The rumors are still unconfirmed. However, BYD stock must be reorganized and forge a new base in addition to the deep consolidation that took place from November to June.

Li Auto, a smaller rival, saw a 0.4% increase to 38.18. LI stock is still viable after rebounding Wednesday from its 21 day line. Li Auto stock has begun a new consolidation process after more than doubled from early May to mid June.

Tesla stock rose 0.5%, to 714.94. The shares are now just above their 21 day line, but below their 50-day falling line. TSLA stock is now just above the 10-week line. Tesla earnings for the second half of 2015 are due July 20.


Tesla vs. ByD: Which EV-giant Is the Better Buy?


 

Market Rally Analysis

The major indexes dropped sharply for the second consecutive session. However, they soon recovered and the Nasdaq turned positive in the afternoon. On Thursday, the Nasdaq managed to scratch out a tiny gain, while the S&P 500, Dow Jones and Russell 2000 all fell for a fifth straight session.

All major indexes are in sharp decline for the week. This week started with Nasdaq breaking resistance at its 10-week moving median. The indexes all fall below their 21 day moving averages.

Perhaps the “uptrend under stress” has been bouncing after trending lower for several sessions. However, it does not have to happen any time soon. Thursday’s rally at lows may have been the “bounce.”

It is possible to argue that the major indexes are rangebound. The early or late June highs mark the top, while the mid-June lows mark the bottom. These ranges are full of volatility.

As earnings season heats up, adding to a whirlwind of inflation-recession-Fed uncertainty, volatility for the market rally and individual stocks seems highly likely to continue.


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What to do now?

Although UnitedHealth and McKesson were not looking great in the morning, they did rebound but investors shouldn’t expect intraday rallies that will save the day.

Market participants are looking for direction in a painfully long downtrend. This is not the right environment to be exposed. Profits can be locked in in a chaotic market if you are quick to grab some profits.

Make sure to keep an eye on key earnings over the next few days and weeks.

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

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

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