Dow Jones futures fell slightly Friday morning, while S&P 500 futures and especially Nasdaq futures retreated further, with FedEx (FDX) and Rivian continue with earnings. One day after a sharp rise in the stock market, Nasdaq sold out strongly, with large stock exchanges such as apple (AAPL), Adobe (ADBE), Nvidia (NVDA), AMD (AMD) and Tesla shares led the decline.
Confirm inventory (AFRM) dived and Block (SQ) – formerly Square – fell sharply when the Consumer Financial Protection Bureau (CFPB) launched a study on “buy now, pay later” credit.
On the plus side, commodity and finance-related groups were relatively good. Bancorp customers (CUBER), Alcoa (AA), Charles Schwab (SCHW), CBRE (CBRE) broke out on Thursday.
Nevertheless, there was a worrying follow-up after Wednesday’s follow-up day, which confirmed a new market rally.
Rivian (RIVN) reported a much larger loss than expected while revenue came in at $ 1 million, roughly in line. It was the first Rivian earnings report since the company’s IPO in November. Rivian, which had only had limited deliveries of its R1T electric pickups, said it would miss the 2021 production target with “a few hundred vehicles”. Furthermore, Rivian said that new orders placed today are unlikely to be filled until 2023.
Rivian expects to send the first batch of vans this year Amazon.com (AMZN), a major RIVN stock investor.
As expected, Rivian announced that they will build a new assembly plant in Georgia, along with a battery factory.
With low production, minimal sales and large losses, the Rivian share fell 8% in expanded trading, close to a low after the listing. The RIVN share fell 5% to 108.87 on Thursday.
The results and guidance from Rivia were also relevant to the EV giant Tesla (TSLA) and startup Sure (LCID).
Tesla shares fell 5% to 926.92 on Thursday, and fell below Wednesday’s lowest level. The shares are now 9.2% below the 50-day limit and close to a round-trip gain of 38% back to 900.50 buy points. Lucid stock fell 1.9% to 40.05. Both fell slightly in the pre-market trade.
Meanwhile, General motors (GM) fell modestly after Dan Ammann, CEO of GM’s majority-owned Cruise, left the self-driving car technology company.
FedEx earnings and earnings hit impressions with the shipping giant also announcing a $ 5 billion share buyback.
The FDX stock jumped 6% overnight, but is well away from 52-week highs. FedEx fell 0.9% to 238.52 on Thursday.
United Package Service (UPS) rose 1.5% overnight, signaling a break from a trend line. On Thursday, the UPS stock rose 1.1% to 208.02 as it jumped from its 50-day moving average. Ecommerce giant Amazon, a growing FedEx freight rival, changed little late. The AMZN share fell 2.6% in Thursday’s session.
CFPB without BNPL
CFPB seeks information from Affirm, Klarna, PayPal (PYPL) and Afterpay, which Block buys. CFPB looks at questions such as how much debt consumers can collect and buy now, paying for later data collection practices.
AFRM shares plunged 11%, reaching a three-month low and approaching the 200-day line. Confirm the stock has fallen almost 50% from the top in early November after launching several deals, including a partnership with Amazon. The SQ share fell 4.6% to a low of 13 months. The PYPL stock lost 1%.
Tesla, Adobe, AMD and Nvidia shares are on the IBD Leaderboard. The AMD stock is on SwingTrader. The Adobe stock is on IBD Long-Term Leaders. The AMD share and Nvidia are on IBD 50. The AA share was Today’s IBD share.
Dow Jones Futures today
Dow Jones futures fell 0.3% to fair value. S&P 500 futures fell 0.5% and Nasdaq 100 futures fell 0.9%.
Futures for crude oil in the US fell 2 percent. The 10-year government interest rate fell 2 basis points to 1.4%.
Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
Join IBD experts as they analyze powerful stocks in the stock market rally on IBD Live
Stock market rally
The stock market opened with modest gains, but conditions deteriorated rapidly, especially for technicians.
The Dow Jones Industrial Average fell 0.1% in Thursday’s trading session. The S&P 500 index rose 0.9 percent. The Nasdaq composite retreated 2.5%. Small-cap Russell 2000 lost almost 2%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 3.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.6%. iShares Expanded Tech-Software Sector ETF (IGV) retreated 3.1%. The Adobe stock is a large IGV stock, with several other software executives falling sharply on Thursday. VanEck Vectors Semiconductor ETF (SMH) fell 4.35%, with AMD and NVDA stock key holdings.
The SPDR S&P Metals & Mining ETF (XME) rose 2.1% and the Global X US Infrastructure Development ETF (PAVE) was just over break-even, with Alcoa shares owned by both ETFs. The US Global Jets ETF (JETS) fell 2.3 percent. SPDR S&P Homebuilders ETF (XHB) fell 1.6%. Energy Select SPDR ETF (XLE) increased 0.6% and Financial Select SPDR ETF (XLF) increased 1.3%.
As a result of more speculative history shares, the ARK Innovation ETF (ARKK) fell 3.7% and the ARK Genomics ETF (ARKG) 4.8%. The Tesla share is still number 1 across ARK Invest’s ETFs.
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Technical leaders fall
Apple stock fell 3.9%, a bearish external reversal and weighs down the Dow Jones, S&P 500 and Nasdaq. But the AAPL stock chart still looks good for now
Adobe shares fell 10% on weak guidance, reaching their 200-day moving average for the first time since May. The ADBE stock chart looks broken.
AMD and Nvidia shares were particularly disappointing. After keeping its 50-day lines, unlike many growth names, chip leaders rose from that key level on Wednesday. But on Thursday, the AMD stock lost 5.4% and Nvidia 6.8%. Most people who bought Wednesday’s returns are probably down in these positions, along with many other growth names that looked capable of action.
Market Rally Analysis
Wednesday’s follow-up day signaled that large institutions supported the new stock market rise. But not all confirmed rallies work. When they fail, they usually quickly begin to show negative action.
Technically, a market rally is in effect as long as it stays above the last lows. But closing below the lowest day for follow-up day is a very negative signal.
Nasdaq plunged through its 50-day line and wiped out Wednesday’s 2.15% gain. But that did not undermine Wednesday’s lowest level.
The S&P 500 index, which almost reached a record high intraday, found support on its 21-day line. The Dow Jones resisted selling for much of the session before going down in the red. Small-cap Russell 2000 is close to the last lowest levels.
Losers crushed winners, back to the trend of recent weeks. New downturns easily trumped new highs on the Nasdaq, but new highs came out on the NYSE.
The growth got another blow, with chip, software and EV games.
The commodity and finance groups did well, with Alcoa and Schwab among the prominent ones. However, as market sales intensified, many of these names diminished somewhat.
Overall, it was a disappointing session.
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What to do now
There were not many great charts that flashed with buy signals, especially among growth names, even at Thursday’s opening. Investors could have bought metal or financial stocks that break out, while medical conditions still look good.
But a confirmed market upturn that immediately triggers a growth-driven sell-off and sector rotation does not inspire confidence. The stocks and sectors that functioned on Thursday may continue to lead, or they may soon be out of favor.
Investors who bought growth stocks on Wednesday’s FTD must consider where they can go or at least start scaling out of these positions, if they have not already done so.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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