Dow Jones futures tipped lower overnight, along with S&P 500 futures and Nasdaq futures. The rise in equities fell from important resistance on Monday amid inflation and recession concerns heading into important economic data, along with renewed concerns for China.
Nasdaq, which led last week̵[ads1]7;s rise in the major indices, suffered the biggest losses on Monday. Treasury yields remain inverted, a recession warning.
China shares were big losers, as Covid restrictions came back and regulators imposed fines vs. technology companies, including Ali Baba (BABA).
BABA stock and Li Auto (LI), which entered the week around buy points, withdrew on Monday. Meanwhile, AstraZeneca (AZN) and Hershey (HSY) did well, reflecting the defensive bend.
Tesla (TSLA) and TWTR shares fell after Tesla CEO Elon Musk moved late Friday to end the $ 44 billion Twitter takeover. Twitter (TWTR) has promised to fight in court to end the transaction.
Li Auto, Hershey and the AZN stock are at IBD 50. Hershey was Monday’s IBD stock of the day. The video embedded in the article highlighted the market action and analyzed the BABA stock, AstraZeneca and Hershey.
Dow Jones Futures today
Dow Jones futures lost 0.1% at fair value. S&P 500 futures fell 0.1% and Nasdaq 100 futures fell 0.2%.
The price of crude oil fell by 1 per cent.
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 actionable stocks in the stock market rally on IBD Live
Stock market rally
The stock market rally lost ground on Monday, with the major indices closing close to bottom levels.
The Dow Jones Industrial Average fell 0.5% in Monday’s trading session. The S&P 500 index fell 1.15 percent. Nasdaq composites fell 2.3%. Small-cap Russell 2000 fell 2%.
The US crude oil price fell 0.7% to $ 104.90 a barrel, well outside the morning’s lowest level.
The 10-year government interest rate fell 11 basis points to 2.99%. The two-year interest rate fell 5 basis points to 3.07% once again inverted along a large part of the yield curve. The one-year government interest rate rose 4 basis points to 2.99%, corresponding to the 10-year interest rate.
Among the best ETFs, Innovator IBD 50 ETF (FFTY) lost 1.3%, while Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.7%. iShares Expanded Tech-Software Sector ETF (IGV) retreated 1.7%. VanEck Vectors Semiconductor ETF (SMH) gave up 2.4%.
The SPDR S&P Metals & Mining ETF (XME) fell 1.65% and the Global X US Infrastructure Development ETF (PAVE) fell 0.4%. US Global Jets ETF (JETS) fell 2.3%. SPDR S&P Homebuilders ETF (XHB) fell 0.5 percent. Energy Select SPDR ETF (XLE) and Financial Select SPDR ETF (XLF) gave up 0.8%. Health Care Select Sector SPDR Fund (XLV) tipped 0.25% lower.
ARK Innovation ETF (ARKK) reflects more speculative history shares, sold 6.9% and ARK Genomics ETF (ARKG) 5%. The Tesla stock remains a top stock across Ark Invest’s ETFs.
Five best Chinese stocks to see now
This weekend fined regulators Alibaba, Tencent (TCEHY) and several other technology companies so as not to disclose any previous acquisitions. The fines of 500,000 yuan were relatively small, but raised concerns that Beijing’s breakdown with technology giants is not over.
Macau closed casinos and most businesses for a week, reviving fears of China’s Covid restrictions.
Alibaba shares plunged 9.4% 109.57, closing below its 21-day moving average for the first time since the end of May. Last Thursday, the BABA stock moved above its 200-day line and managed some resistance above the 121 level, giving an aggressive entry. Shares fell below these key levels on Friday.
Although a strong pull over last week’s peaks may be actionable, the BABA stock would ideally form a consolidation above the 200-day limit.
Li Auto shares fell 4% to 37.33. just below 37.55 point of purchase. The shares are still sharply expanded from the 50-day line. It is possible the LI stock may form a shallow base on top of the long, deep consolidation. The last few weeks can be seen as a handle to a base that dates back to the end of https://www.lacasitatapaswinebar.com/situs-slot-gacor-hari-ini/.
AstraZeneca shares fell 0.3% to 66.75 after flirting with a 67.50 double-bottom buying point, according to MarketSmith analysis. The relative strength line of the AZN stock, the blue line in the charts, is just below a height.
The HSY share rose 0.4% to 220.65, just below a buy point of 222.75 cups with handles. Even though defense stocks are in favor right now, that does not mean they are safe. Many plays for food and drink, including the Hershey share, plunged on May 18. However, the shares have declined since the end of June.
Musk Vs. Twitter Saga
Faced with the buyer’s remorse, Musk said late Friday that he no longer wants to buy Twitter, something he had strongly signaled in recent months. Twitter said a deal is a deal, to force Musk to proceed with the $ 44 billion takeover, $ 54 per share. Twitter hired a heavyweight in the merger law to represent it. Legal experts say Musk has a weak case.
The Twitter share plunged 11.3% in Monday’s ordinary session to 32.65, the lowest since mid-March. The TWTR share reached a two-year low of 31.30 on 24 February.
After the closing, Twitter said, via its lawyers, that Musk’s offer to end the takeover was “invalid and unlawful”.
The Tesla stock, which rose slightly near the open, fell 6.55% to 701.99. It is likely that some or even most of Monday’s losses reflected growth-led market weakness and China’s concerns. The TSLA stock fell below the 50-day line after closing above this level on Friday for the first time in two months. The shares also fell slightly below the 21-day limit.
Tesla Archrival Going Into Production Overdrive
Market Rally Analysis
Given last week’s market gains to key levels, Monday’s retreat was not surprising, especially with the negative China news and so much key data in print.
The Nasdaq fell from the 50-day and 10-week moving averages. which has served as major resistance in 2022. This does not mean that this test has already failed. The index may stop around these levels for several days or weeks before breaking through.
The Nasdaq closed slightly below its 21-day moving average. The S&P 500, Dow Jones and Russell 2000 also undermine the short-term level.
Beyond the China news, it is difficult to be brave at the current level with important news in print.
Wednesday’s consumer price index is expected to show that inflation rose slightly from the 40-year high of 8.6%. Core inflation should cool down a bit. With petrol prices falling sharply since the peak on 14 June, and commodity prices falling sharply in recent weeks, headline inflation should decline. So it is unclear how the markets will react to inflation data from June.
A Fed rate hike of 75 basis points at the end of July seems deadlocked, with a small chance of a full percentage point. The real impact will be on the impact of future interest rate hikes in the Fed. But decision-makers will receive two more KPI and job reports before the September meeting, with a number of other data within the Fed meeting in November.
Meanwhile, JPMorgan Chase (JPM), Morgan Stanley (MS) and Delta Air Lines (DAL) report early Wednesday, with several other banks and UnitedHealth (UNH) in print later this week.
Guidance will be the key in the midst of rapid changes in the economy.
Time market with IBD’s ETF market strategy
What to do now
With the market facing resistance ahead of major economic and corporate news, investors may not want to increase modest exposure in the very short term. Some sectors work, especially defensive or defensive growth names such as HSY stocks and AbbVie. However, if the market rebounds sharply, defensive names may sell out or hang. So do not get too concentrated on a particular sector or topic.
Investors may wish to make a partial profit in any recent winners.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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