First Republic Crashes on New Wall Street Bailout Calls; Fed meeting next

Dow Jones futures were little changed before Tuesday’s open, which JPMorgan chase (JPM) and other major banks made new efforts to stabilize troubled First Republic Bank (FRC). FRC stock crashed 47% on Monday, hitting a new low.


JPMorgan’s discussions, although preliminary, have focused on how the financial services industry could facilitate an investment that would increase the bank’s capital. Among the options on the table, the people said, is an investment in First Republic by the banks themselves.

The SPDR S&P Regional Bank ETF (KRE) rose 1.1 percent. western alliance (WAL) sold nearly 7%, while KeyCorp (KEY) was up 1.2%.

Fed meeting, performance results

The Federal Reserve’s two-day meeting starts on Tuesday, and the central bank may find it difficult to raise interest rates on Wednesday after the weekend saw rescue attempts for several US regional and community banks still faltering.

As of Monday, markets were pricing in 71% odds of a quarter-point rate hike at the conclusion of Wednesday’s Federal Reserve meeting. That would raise the Fed’s key interest rate to a range of 4.75% to 5%. The chance of a Fed rate cut fell to 28% from 38% on Friday.

Still, Goldman Sachs economists are sticking to their prediction that the Fed will pause interest rate hikes “due to stress in the banking system.”

Regardless of what happens this week, markets see rate cuts starting this summer and solid odds of a federal funds rate below 4% by the end of 2023.

Key earnings results this week include GameStop (GME), General Mills (GIS), KB Home (KBH), On (You too Nike (THE).

The stock market today

On Monday, the Dow Jones Industrial Average rose 1.2%, and the S&P 500 rose 0.9%. The tech-heavy Nasdaq composite rose 0.4% in a day of volatile trading.

Electric vehicle giant Tesla (TSLA) traded up 1.7% on Monday. Among Dow Jones stocks, apple (AAPL) rose 1.55% and Microsoft (MSFT) wobbled 2.6% in today’s stock market action.

Chip leader Advanced micro Units (AMD), IBD SwingTrader stock Meta platforms (META) and IBD Leaderboard stocks Palo Alto Networks (PANW) — as well as Dow Jones shares Nike and Salesforce (CRM) – are among the best stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard stock. Meta is an IBD SwingTrader stock. And Microsoft was featured in this week’s Stocks Near a Buy Zone column.

3 top growth stocks to buy and watch nowrent stock market correction

Dow Jones Futures Today: Oil prices, Treasury yields

Ahead of Tuesday’s opening bell, Dow Jones futures, S&P 500 futures and Nasdaq 100 futures were little changed. Keep in mind that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular session.

The 10-year US Treasury yield rose to 3.48% on Monday, as the banking crisis continues. Oil prices rose more than 1% on Monday after last week’s big losses. West Texas Intermediate futures traded below $68 a barrel.

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What to do in the ongoing stock market correction

Now is an important time to read IBD’s The Big Picture column with the stock market trending back into a “market in correction” after heavy losses in recent sessions.

With the market in correction, investors should mostly, if not completely, be on the sidelines until a follow-up day triggers another uptrend. Now is a good time to build a robust watchlist of stocks in leading groups.

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

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Nike, Salesforce

Since the Oct. 3 bottom, Nike shares have rallied as much as 59% to a recent high of 131.31. Now, the stock is consolidating within a flat base that offers a buy point at 131.41, according to IBD MarketSmith pattern recognition.

Amid recent rallies, Nike stock faces a crucial test of the 50-day moving average, a key level to watch. A decisive repeat would be bullish for base-building prospects, carving out the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

In recent weeks, Dow Jones leader Salesforce has shown great upside following strong results for the fourth quarter. The stock is above the 178.94 cup-with-handle entry after last week’s big rise. Nevertheless, the market is in a correction, so investors should avoid new purchases until the market environment improves.

Top stocks to watch: AMD, Meta, Palo Alto

Advanced Micro Devices broke out past an 89.04 buy point in a flat base last week and remains outside buy territory despite a 1.05% loss on Monday. The 5% buy range topped at 93.49. AMD was featured in Wednesday’s IBD Screen Of The Day column.

Back story: At the beginning of February, the chip manufacturer reported stronger sales of data center chips than expected in the fourth quarter. But AMD tempered that news with a soft outlook for the current period.

Facebook parent Meta Platforms retook a flat-base buy point of 197.26 during Monday’s 1.1% gain. Still, last week’s breakout attempt was a sign of strength within the general market’s weakness. Meta shares rose 0.25% on Monday morning.

Back story: Like its social media rivals, Meta is struggling due to a sharp reduction in ad revenue as clients reel over macroeconomic concerns, recession fears and higher interest rates. This comes as it spends billions of dollars in a risky effort to build the “metaverse,” a virtual reality world that has yet to catch on.

IBD Leaderboard stock Palo Alto Networks is trading just below a cup-with-handle buy point of 192.94 after Monday’s 0.2% gain. The relative strength line is at new heights.

Back story: On Feb. 21, the cybersecurity giant announced strong results for the quarter ended in January, with earnings reaching $1.05 per share, up 81% from a year earlier, on a 26% jump in revenue to $1.7 billion.

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

Tesla shares

Tesla shares rose 1.7% on Monday as it continues to see some support around its 50-day moving average. Shares closed Monday about 52% off their 52-week high.

On Tuesday, weekly China EV insurance registration data could be a key gauge of Tesla demand in the world’s biggest EV market, which is in the middle of a huge price war started by Tesla.

Dow Jones Leaders: Apple, Microsoft

Among the Dow Jones stocks, Apple shares rose 1.55% on Monday, recovering from Friday’s losses. Shares closed at their highest level since September 12.

Microsoft shares broke out above a flat base of 276.86 buy points on Friday. But the stock gave up that entry during Monday’s 2.6% decline.


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