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Dow Jones Futures: Shares rise when Powell rules out even bigger rate hikes; Apple, Exxon Flash Buy Signals




Dow Jones futures declined overnight, along with S&P 500 futures and Nasdaq futures. The Federal Reserve raised interest rates by half a point on Wednesday, but the stock market rose sharply and government interest rates fell when Fed chief Jerome Powell signaled large rate hikes are off the table in June and July. Apple stock flashed an early entry while Exxon Mobile (XOM) broke out.




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Lithium giant Albemarle (ALB) and cybersecurity manager Fortinet (FTNT) were notable winners of after-hours earnings.

Bold meeting

The Fed meeting ended on Wednesday afternoon with an interest rate increase of half a point to a new target range of 0.75-1%. Politicians also voted to start scaling down the central bank’s huge balance sheet, with runoff rising to $ 95 billion a month in September. Both moves were expected.

Fed chief Powell says it is crucial that inflation is reduced quickly. But Powell said he sees interest rate hikes of “50 basis points” on the table for the next couple of Fed meetings. He added that decision makers do not actively assess 75 basis points. The markets had priced in a good chance of three-quarter points increases at the Fed meetings in June and July.

Fed chief Powell’s less hawkish than dreaded forecast for interest rate hikes sent equities sharply higher and government interest rates lower.

Key income

After the end, Albemarle rose 15% higher due to strong earnings and guidance. The ALB share already rose 9.3% to 215.47 in Wednesday’s ordinary session, and regains its 50-day line as a rival Livent (LTHM) shot up 30% on Wednesday on earnings and prospects, flashing early entries. The Albemarle share signals a gap above its 200-day line, which potentially breaks a trend line and another early entry.

Fortinet topped quarterly shows, although it provided some mixed guidance. The FTNT share rose 4% in late trading, but has some distance before it is in the buying area. The network security game fell during the day on Wednesday, and approached the 2022 lows before it picked up again for a record-thin win.

Shopify (SHOP) and Datahund (DDOG) report early Thursday. But the two former software leaders are close to 52 weeks’ lowest level.

Shares in buying zones

Exxon Mobil and LNG shares flashed with buy signals on Wednesday, with energy prices soaring and Cheniere energy (LNG) reports booming revenue growth.

Growth stocks picked up sharply on Wednesday, but are still damaged. apple (AAPL) just triggered a buy signal. The Tesla stock is the only other megacap over its 200-day and 50-day lines.

Tesla (TSLA) and LNG storage are on the IBD Leaderboard. The Fortinet stock is on IBD Long-Term Leaders. CF stock is on IBD 50. CF Industries and PXD stock is on IBD Big Cap 20, which is filled with energy, fertilizer and other brand names.

The video built into the article discussed Wednesday’s strong market rally and analyzed the XOM stock, Mattel (Food and General dynamics (GD).

Dow Jones Futures today

Dow Jones futures were reduced in fair value. S&P 500 futures fell 0.1% and Nasdaq 100 futures lost a fraction.

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 on Wednesday

The attempt at a stock market rally was up and down before the Fed meeting and right after. But the major indices moved sharply toward the end after Fed chief Powell signaled 75 basis point rate hikes from the table.

The Dow Jones Industrial Average jumped 2.8% in Wednesday’s trading session. The S&P 500 index rose 3 percent. The Nasdaq composition rose 3.2 percent. Small-cap Russell 2000 rose 2.7%.

The US crude oil price rose 5.3 percent to $ 107.81 a barrel. As expected, the European Union proposed phasing out Russian crude oil imports over six months. There is no final agreement yet.

The 10-year government interest rate fell 4 basis points to 2.92%, after exceeding 3% intraday once again.

Among the best ETFs, Innovator IBD 50 ETF (FFTY) rose 1.2%, while Innovator IBD Breakout Opportunities ETF (BOUT) rose 3.3%. iShares Expanded Tech-Software Sector ETF (IGV) rose 3%. VanEck Vectors Semiconductor ETF (SMH) increased by 3.4%.

The SPDR S&P Metals & Mining ETF (XME) rose 2.9% and the Global X US Infrastructure Development ETF (PAVE) rose 3.3%. The US Global Jets ETF (JETS) climbed 1.3%, even with crude oil prices at their peak. SPDR S&P Homebuilders ETF (XHB) rose 3.3%. Energy Select SPDR ETF (XLE) rose 4.15%, with the XOM stock as an important component. Financial Select SPDR ETF (XLF) picked up 3.1%. Health Care Select Sector SPDR Fund (XLV) decreased by 2.2%

ARK Innovation ETF (ARKK) reflects more speculative history stocks, jumping 5.1% and ARK Genomics ETF (ARKG) 4.35%, both recovering from heavy intraday losses. The TSLA share is still number 1 across Ark Invest’s ETFs.


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Exxon action

Exxon shares rose 4% to 91.70, and managed a buying point of 89.90 cups with handles in volume above average. The relative strength line is at a new high, a bullish sign. The RS line is the blue line in the diagrams that come with it.

While oil prices are high, refining margins increase significantly. This is good news for an integrated oil giant like Exxon Mobil.

LNG stock

The Cheniere Energy stock fell 4.2% to 145.89, topping a short buying point of 149.52 during the day. But LNG shares are capable of action from a jump from the 50-day line and break a shallow downtrend.

The RS line is at a new high.

Cheniere Energy reported a significant loss in the first quarter early Wednesday. But revenues rose by 142%, crushing impressions and the fifth consecutive quarter of accelerating growth. While crude oil and natural gas prices in the US rose sharply, electricity prices continue to skyrocket in Europe. This is good news for Cheniere Energy’s liquefied natural gas specialist.

Apple action

Apple shares fell 4.1% to 166.02 on Wednesday, moving above the 200-day moving average and just above the 50-day line. The movement above the 50-day line also broke a short downtrend, providing an early entry for AAPL shares. The official buy point is 183.04, although investors may use 179.71 as another early entry for the Dow Jones tech titan.

The RS line is at a new high point in a weekly chart. This reflects the strong performance of the Apple stock compared to the S&P 500 index. The RS line is the blue line in the diagrams that come with it.

Tesla has also regained its 200-day and 50-day lines, jumping 4.6% to 952.62 on Wednesday. The EV giant has some potential buy points, although the chart is not easy on the eye. The Tesla stock is also nowhere near an obvious early entry.


Tesla vs. BID: Which Booming EV Giant is the best buy?


Market Rally Analysis

The attempt at a stock market rally got a big boost on Wednesday afternoon when Fed CEO Powell eased the fear of interest rate increases a bit.

With such an important Fed meeting, and so many cross-currents for investors to consider, it would not be a surprise to see a second-day Fed reaction that returns much of Wednesday’s gains.

Nevertheless, investors may now be looking for a follow-up day to confirm the new trend. A follow-up day – at least a few days into a new rally attempt – means a large price gain on one or more of the large indices in higher volumes than the previous session. This indicates that large institutions are betting that the new market rally has legs. Confirmed trends do not always work, but they are a strong signal.

The energy sector still looks strong, with Exxon and LNG shares among the many in buying zones or establishments. Fertilizer manufacturers have recovered from key support. Some steelmakers also hold up around their 50-day lines. Some wood and building materials companies show bullish action, as well as some drug and biotechnology stocks. Airlines and a few other travel plays are possibly underway. Defense companies that had hung around key support in new bases made solid moves on Wednesday. Lithium spills as ALB stock suddenly look white again.

Some good market days and a lot of stocks would look interesting. But some bad days are likely to break more charts.


Time market with IBD’s ETF market strategy


What to do now

The share price rise has not been confirmed, but looks promising. Aggressive investors could have bought, for example, XOM shares or an ETF for a broad market to gain some exposure. But if you come in early, you need to be ready to scale out just as fast, if not faster.

There is nothing wrong with waiting for a confirmed market rally. This is especially true now, with few stocks in position yet. Even when it’s a follow-up day, add exposure slowly.

If this market rally has legs, you will have many opportunities to build up exposure and earn big profits. If the upside momentum disappears over the next few days, you’ll be glad your exposure is light.

For now, get your watch lists in shape, and pay extra attention to stocks that are close to being actionable.

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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