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Dow Jones Futures: Market Rally slips despite solid Rivian debut; Tesla reveals musk sales, confirms spikes




Dow Jones futures rose Wednesday night, while S&P 500 futures and Nasdaq futures rose slightly. Walt Disney (HAZE), Confirm inventory (AFRM) and SOFI shares were among the most important earnings overnight.

The rise in the share price retreated again on Wednesday, despite a solid Rivian IPO debut and a rise in Tesla shares, as government interest rates picked up again on hot inflation data.

Several major IPO winners, including Upstart Holdings (UPST), sold heavily on Wednesday on earnings. But Apple, Microsoft (MSFT) and Google parent Alphabet (GOOGL) gave up the hill, while many chip names such as Nvidia (NVDA) and Advanced micro devices (AMD) suffered major losses.

So far, the stock market rise seems to have a normal decline after being slightly extended.

Rivian IPO debuts

Rivian (RIVN) jumped 29% to 1[ads1]00.73 in Wednesday’s trading debut. The RIVN stock closed with a market value of 85.9 billion dollars, almost equal General motors (GM) ($ 86 billion) and above Ford Motor (F) ($ 77 billion).

The stock rose as high as 119.45 and as low as 95.20.

RIVN shares rose 6% overnight.

Rivian sold 153 million shares Tuesday night at $ 78 per share, above an already raised price range of $ 72-74. The much-anticipated RIVN IPO raised $ 11.9 billion, making it the largest new issue in many years.

Rivian has already started limited deliveries of its R1T electric pickup, with the R1S, a large SUV, to be delivered by the turn of the year. But much of its focus in the short term will be on making 100,000 electric vans for Amazon.com (AMZN).

Amazon owns 20% of Rivian, while Ford owns 12%.

Despite the strong first-day development for the Rivian stock, investors should not buy a new issue right away. Let some price discovery take place, and look for a listing base to be formed.

Tesla stock bounces

Meanwhile, Tesla shares rose 4.3% to 1,067.95, returning from an intraday low of 987.13 and regaining its 21-day moving average. The TSLA stock is still down almost 13% for the week after falling 4.8% on Monday and falling 12% on Tuesday.

These declines came after CEO Elon Musk this weekend signaled that he would sell 10% of his huge Tesla stake. Musk had 170 million shares, with several million in options.

Late Wednesday, the company revealed that Elon Musk sold 934,000 shares on Monday for around 1.1 billion dollars. near the TSLA stock peak. The SEC archive also showed that Monday’s disposal was part of an automatic stock sale plan set for Sept. 14, well before Musk “asked” Twitter followers on Nov. 6 for their approval.

It is possible Musk sold more shares on Tuesday or Wednesday. TSLA shares rose nearly 3% in overnight trading, with at least some of Musk’s sales out of the way.


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Key income

Disney shares as well as 2021 IPOs AFRM shares, AppLovin (APP), TaskUs (ASSIGNMENT) and Dutch Bros (BROS) reported after closing. So did SoFi technologies (SOFI), which was announced via a SPAC merger earlier this year.

Disney revenue was missed while Disney + subscribers came in well below estimates. The DIS stock fell overnight after closing below its 200-day and 50-day lines.

Confirm that revenue was lost, but revenue peaked along with other key figures. AFRM shares rose more than 25% in expanded trading after falling 15% on Wednesday, wiping out most of the October rise.

SoFi revenues topped the forecasts among thriving lending. SOFI shares rose 13% to almost 23 in overnight action. Shares in fintech previously fell 7.8% to close on Wednesday below a buy point of 21.88.

AppLovin’s revenue was missed, but revenue exceeded consensus. The APP share rose solidly after falling 7.6% on Wednesday, and retreated from record highs.

TaskUs revenues were in line while revenues hit. The TASK stock rose modestly in overnight trading after Wednesday’s 5.1% drop, below their 50-day line. TaskUs can offer an early entry over the 50-day and break a trend line.

Dutch Bros revenues and guidance cleared views. The BROS stock jumped late. The Dutch Bros share had fallen to just over a buy point on Wednesday. A strong move on Thursday may offer an aggressive entrance.

Tesla, AMD, Nvidia, Microsoft and Google stocks are on the IBD Leaderboard. Google and MSFT shares are on IBD Long-Term Leaders. AFRM shares, Nvidia, Upstart, AppLovin, Tesla and Dutch Bros shares are on IBD 50.

The video embedded in this article analyzed the market rally slide and covered the UPST stock, by Dash (DASH) and the VanEck Gold Miners ETF (GDX).

Dow Jones Futures today

Dow Jones futures fell slightly in real terms, with Disney stock hitting blue chips. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.2%. The Tesla share gives a boost to the S&P 500 and Nasdaq.

Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.


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Stock market rally on Wednesday

The stock market rally retreated for a second session in a row, led by growth names. The Dow Jones Industrial Average fell 0.7 percent in Wednesday’s trading session. The S&P 500 index rose 0.8 percent. Nasdaq composites fell 1.7%. Small-cap Russell 2000 fell 1.6%.

The 10-year government interest rate rose 13 basis points to 1.56%. The consumer price index warmed, with inflation reaching a 31-year high of 6.2%. Core inflation rose to 4.6 per cent. High inflation may encourage the Federal Reserve, which has just agreed to reduce bond purchases, to raise interest rates faster than expected. Higher interest rates are bad news for highly valued growth stocks, because investors will discount future growth prospects more.

U.S. crude oil futures fell 3.3 percent to $ 81.34 a barrel.

Apple shares fell 1.9% and Microsoft 1.5%, weighing on the Dow Jones, S&P 500 and Nasdaq. Google shares fell 2%, back below a recent buying point. So did Adobe (ADBE), which lost 3.1%. Nvidia shares fell 3.9% and AMD 6.1%, and retreated after major gains in recent weeks.

The UPST share plunged 18%, with FuboTV (FUBO) and Doximity (DOCS) among the notable IPO revenue losers.

ETFs

Among the best ETFs, Innovator IBD 50 ETF (FFTY) fell 4.3%, while Innovator IBD Breakout Opportunities ETF (BOUT) fell 1.9%. iShares Expanded Tech-Software Sector ETF (IGV) retreated 2.85%. VanEck Vectors Semiconductor ETF (SMH) gave up 3.2%, with Nvidia and AMD shares among the notable components.

The SPDR S&P Metals & Mining ETF (XME) fell 2.7% and the Global X US Infrastructure Development ETF (PAVE) fell 1%. US Global Jets ETF (JETS) fell 2.55%. SPDR S&P Homebuilders ETF (XHB) fell 1.5%. Energy Select SPDR ETF (XLE) fell 2.6% and Financial Select SPDR ETF (XLF) fell 0.2%.

ARK Innovation ETF (ARKK) reflects more speculative history stocks, losing 3.3% and ARK Genomics ETF (ARKG) 4%. The Tesla share is still number 1 across ARK Invest’s ETFs.


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Market Rally Analysis

The stock rise is in the middle of a decline. The Dow Jones and S&P 500 are on their 10-day lines, while the Nasdaq is still above its rising 21-day average. This retreat so far is normal and not surprising.

This retraction may be almost over, or it may end up being longer and deeper. There is certainly reason for a longer break, especially for growth names.

FFTY ETF fell to its 50-day line on Tuesday.

Tesla, Nvidia, AMD and some other popular stocks had moved vertically up to this week. It had to end, even if only for a short time. Titans like Microsoft and Google have been market leaders since the corona crisis. A number of recent IPOs with conspicuous valuations have skyrocketed in 2021.

The UPST share plunged 18% – despite strong results and guidance – along with many other major IPO losers on Wednesday, also indicating that high value growth also needs a break. Then again, Sofi and AFRM shares suggest that some new new problems have not cooled down.

And while growth was hardest hit on Wednesday, losses were broadly based, with energy, steel, shipping, retail and housing sectors all retreating.

Maybe the Rivian IPO, along with the Tesla stock and Sure (LCID), which increases with initial deliveries, will mark a short-term peak for EV games. Maybe not.

A withdrawal in the market over several weeks would not be fun, especially if it was a direct correction. But it will also allow leading stocks to set up real bases or retreat to moving averages.


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What to do now

The current withdrawal shows the benefits of taking a partial profit on the way up, especially when the market upswing begins to extend. If you make further profits now, or close a position completely, the average selling price will probably still be reasonably high. Alternatively, by locking in some gains on the way up, you have more leeway to let a stock retreat, hoping to ride it out and see long-term gains.

This is not a good time to make new purchases. Recent outbreaks and early entries have generally suffered. Make sure you cut losses quickly, and don’t let double-digit gains turn into losers.

Taking these steps will reduce the exposure somewhat.

Beyond that, you can take more explicit steps to reduce your exposure, depending on how highly invested you are at the moment. Other factors include your willingness to risk further losses now in hopes of greater gains along the way, as well as the cost basis of your positions.

This is not an obvious “correct” answer. If the market rally goes higher on Thursday, it’s better to hold on. If stocks fall into a correction, it is better to go for cash or have a few core positions.

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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