Dow Jones reverses lower ahead of Powell speech; 7 Best Stocks to Buy and Watch

Dow Jones futures were slightly lower in extended trading ahead of Federal Reserve Chairman Jerome Powell’s speech on Tuesday. The Dow Jones Industrial Average rose as many as 305 points on Monday before turning lower.


Powell speech, inflation data, earnings

Fed chief Powell will speak at the Sveriges Riksbank International Symposium on Central Bank Independence in Stockholm, Sweden. His speech is scheduled to begin at 9 a.m. ET. Powell’s speech comes on the heels of Friday’s jobs report, which saw wage growth cool much more than expected and workers clocking fewer hours for a second straight month. The data should allow the Fed to further reduce the pace of rate hikes.

Data for consumer inflation will arrive on Thursday morning. CPI is expected to come in unchanged for the month of December and 6.6% higher year over year, according to Econoday estimates. According to CME’s FedWatch tool, traders are placing a 77% chance of a 25 basis point rate hike at the next Fed policy meeting in late January/early February.

The 10-year Treasury yield ticked down to 3.51% on Monday, falling for a second session in a row.

Jefferies (JEF) reported earnings that met estimates, and sales that topped forecasts. Jefferies shares lost more than 3% in extended trading.

Other companies reporting later this week include KB Home (KBH), Taiwan Semiconductor Manufacturing (TSM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC). Dow Jones stocks JPMorgan Chase (JPM) and UnitedHealth Group (UNH) will also report this week.

The stock market today

On Monday, the Dow Jones Industrial Average fell 0.3%, and the S&P 500 lost 0.1%. The technology-heavy Nasdaq composite rose 0.6 percent. Among exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) rose 0.65% and SPDR S&P 500 ( SPY ) edged lower.

Electric vehicle giant Tesla (TSLA) traded up 5.9% on Monday. Among Dow Jones stocks, apple (AAPL) gained 0.4% and Microsoft (MSFT) rose 1% in today’s stock market.

Deere (DE), IBD Leaderboard stock ELF beauty (ALV), Rio Tinto (RIO) and IBD SwingTrader stocks Super micro computer (SMCI) – as well as Dow Jones names larva (CAT), Chevron (CVX) and Walmart (WMT) — is among the best stocks to buy and watch with the market back in rally mode.

ELF Beauty is an IBD Leaderboard stock. Super Micro is a new IBD SwingTrader idea. Caterpillar and Rio were featured in this week’s last column for stocks near a buy zone.

4 top growth stocks to buy and watch nowra stock market rally

Dow Jones Futures Today: Oil Prices

Ahead of Tuesday’s opening bell, Dow Jones futures were trading 0.3% below fair value, and S&P 500 futures were down 0.35%. Technology Nasdaq 100 futures were down 0.4% relative to fair value. Keep in mind that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular session.

US oil prices rose more than 1% on Monday, recovering somewhat from last week’s sharp losses. West Texas Intermediate futures traded just below $75 a barrel.

IBD’s latest newsletter, MarketDiem, brings you actionable ideas for stocks, options and crypto straight to your inbox.

What to do in the new stock market rally

Now is an important time to read IBD’s The Big Picture column with the stock market trending back in a “confirmed uptrend” after Friday’s sharp rally in heavy volume, a stark departure from recent action.

Friday’s positive action in high volume led the IBD market outlook to change to another stock market rally. Nevertheless, it is still an uncertain environment, and exposure should be increased in a measured way. Investors should stick to 20% to 40% exposure for now.

(Check out IBD stock lists like the IBD 50 and Stocks Near a Buy Zone for more stock ideas.)

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to buy and watch: Caterpillar, Chevron, Walmart

Dow Jones member Caterpillar remains squarely in buy territory above a flat-base buy point of 239.95 after Monday’s 0.9% decline, according to IBD MarketSmith pattern recognition. The buy zone goes up to 251.95. Bullishly, the stock’s relative strength line, an important technical indicator, is at new heights.

CAT stock scores a strong 98 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Energy giant Chevron again found strong resistance at its 50-day line as it continues to build a cup base that has a buy point at 189.78.

Discount retailer Walmart reversed 1.25% lower on Monday, falling back below its 50-day line. Shares are building a cup with handle that has a buy point of 154.74 and is about 6% away from the last entry.

Top stocks to buy and watch: Deere, ELF Beauty, Rio, Super Micro

Recent IBD Stock Of The Day Deere is building a flat base with a buy point of 448.50. Shares are approaching their last buy point, moving up 0.4% on Monday.

IBD Leaderboard stock ELF Beauty gave up its 57.03 flat-base entry amid Monday’s 3.9% decline. Shares broke out Friday on heavy volume, indicating strong institutional demand for the cosmetics leader. The 5% buy zone tops out at 59.88 if the stock is able to retrace its entry.

Recent IBD Stock Of The Day Rio Tinto pared gains to just 0.1% Monday, rising further above a cup with the handle’s 73.45 buy point. The buying range goes up to 77.13.

IBD SwingTrader stock Super Micro Computer is moving up quickly on the right side of a short consolidation that has a buy point at 95.32. Shares pared gains to 0.45% on Monday.

Shares to buy and watch in new stock market rally

These are seven top stocks to buy and watch in today’s stock market, including three Dow Jones leaders.

company name Symbol Right point of purchase Type of base
Deere (OF) 448.50 Flat base
ELF beauty (ALV) 57.03 Flat base
Rio Tinto (RIO) 73.45 Cup with handle
Super micro computer (SMCI) 95.32 Consolidation
larva (CAT) 239.95 Flat base
Chevron (CVX) 189.78 Cup base
Walmart (WMT) 154.74 Cup with handle
Source: IBD data as of January 9, 2023

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla shares

Tesla shares rose nearly 6% on Monday, adding to Friday’s upside. The shares remain strongly below the 50- and 200-day limits.

Last week, shares hit a 52-week low of 101.81. Tesla stock closed Monday about 68% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones shares, the Apple share rose 0.4 percent on Monday. Last week the stock hit a new 52-week low of 124.17. The stock is still around 20% lower than its 52-week high.

Microsoft shares rose 1% on Monday, adding to Friday’s gains. The software giant is about 30% off its 52-week high and remains close to its 52-week low of 213.43, reached on November 4.


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