Will Powell’s testimony threaten the stock market rally? Apple, Tesla in focus
Dow Jones futures were little changed before Tuesday’s open after the Dow Jones Industrial Average pared gains to just 40 points on Monday. Federal Reserve Chairman Jerome Powell’s testimony comes on Tuesday. apple (AAPL) stock jumped on an analyst buy rating, while Tesla ( TSLA ) shares fell after the company’s extra round of price cuts.
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Powell’s testimony
Fed chief Powell is set to begin two days of congressional testimony on Tuesday, where he will get a chance to explain the central bank’s planned response to a more resilient economy. Last month, the Fed raised interest rates by a quarter of a percentage point, and investors will look for clues to the increase at this month’s meeting on 21-22. March.
Currently, traders are placing a 69% chance of a quarter-percentage-point rate hike at the next meeting, according to CME’s FedWatch Tool.
Next, Friday will feature the Labor Department’s employment report for February. Nonfarm payrolls are expected to come in at 215,000 in February, down from January’s 517,000 gain, per the Econoday estimate.
Guide wire (GWRE) reported mixed Q2 results late Monday. Shares rose around 1% in extended trading. The share is building a bottom base with a buy point of 78.76.
Several key earnings reports this week include BJ’s Wholesale (BJ), CrowdStrike (CRWD), Dick’s Sports Equipment (DKS), JD.com (JD), MongoDB (MDB), Thor Industries (THO) and Ulta Beauty (ULTA).
The stock market today
On Monday, both the Dow Jones Industrial Average and the S&P 500 rose 0.1% each. The tech-heavy Nasdaq composite reversed down 0.1% after giving up solid gains.
Electric car giant Tesla traded down 2 percent on Monday. Among the Dow Jones stocks, Apple rose 1.85% and Microsoft ( MSFT ) climbed 0.6% in today’s stock market action.
IBD Leaderboard stock Alteryx (AYX), Arista Networks (A WEB), Palo Alto Networks (PANW) and Salesforce (CRM) – as well as Dow Jones stocks American Express (AXP) and JPMorgan Chase (JPM) — is among the best stocks to buy and watch amid the recent rally in the stock market.
Alteryx is an IBD Leaderboard stock. And Salesforce was featured in this week’s Stocks Near a Buy Zone column.
4 top growth stocks to buy and watch nowra stock market rally
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 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 trading session.
The 10-year US Treasury yield rallied on Monday, settling at 3.98%. Oil prices reversed early losses to rise around 1% as West Texas Intermediate futures traded above $80 a barrel. WTI futures were trading around their recent highs.
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What to do in the strengthening 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 strong gains in recent sessions.
The current uptrend is strengthening, justifying holding a higher exposure level of 60% to 80%. But investors should increase exposure in a disciplined manner in case Powell’s testimony spoils the party this week.
(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: American Express, JPMorgan
American Express is building a giant cup-with-handles base showing a buy point at 182.25. Shares are just 2% below the buy point, when they fell on Monday. Bullishly, the stock’s relative strength line is at new highs, which is a particularly positive sign ahead of a potential breakout.
Banking giant JPMorgan is in buy territory above its 138.76 flat buy point despite Monday’s 0.6% loss, according to IBD MarketSmith chart analysis. Shares are also pulling back from their key 50-day moving average.
JPM stock sports a solid 94 IBD Composite Rating out of a perfect 99, per IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
Top stocks to buy and watch: Palo Alto, Salesforce
Cybersecurity leader Palo Alto Networks is within striking distance of a base buy point at 193.01 after a 12.5% gain on Feb. 22. Shares fell 1.9% on Monday, closing about 2% off their last entry.
Back story: Last week, the cybersecurity giant announced very 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.
Last week, Dow Jones leader Salesforce staged a bullish breakaway gap past 178.94 buy points on strong fourth-quarter results. The shares rose 11.5% on Thursday and are in the buy zone of 5% which goes up to 187.89.
Back story: Salesforce sells software under a subscription model. The software helps companies organize and manage sales operations and customer relations. The company has expanded into marketing, customer service and e-commerce. Salesforce said it has disbanded its “M&A committee” and indicated it will not make any more big acquisitions, amid growing pressure from activist investors.
Arista, Alteryx Hit Latest Purchase Points
Arista Networks moved back into buy territory above 140.91 buy points from a cup base after Monday’s 1.35% gain. A decisive retracement places the stock in the buying area, which goes up to 147.96.
Back story: Arista sells switches that provide faster communication between racks of data servers packed into data centers. According to analysts, Arista is gaining ground in the so-called “enterprise” market — large companies, public agencies and educational institutions. Earnings rose by 72% in the last quarter.
IBD Leaderboard stock Alteryx managed a trendline buy point of 66.50 within a handle of an early-stage cup on Friday. Aggressive investors can buy on the breakout above the trendline, while a conventional entry at 70.73 is also in play. Shares are about 5% away from this buy point.
Back story: The Irvine, Calif., firm created a self-service data analytics platform. Demand is clearly strong as sales have risen from a low of $100 million per quarter in 2021 to $216 million in Q3 2022, up 75% compared to a year ago, and $301 million in Q4 2022, up 73% . This rapid revenue growth is one of the reasons why Alteryx also posted a profit of 84 cents per share in the 4th quarter, likely the largest quarterly earnings in the company’s history.
Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live
Tesla shares
Tesla shares fell 2% on Monday after the electric car giant cut prices on U.S. vehicles again Sunday evening, the latest demand for Tesla vehicles may be slowing after the first boost came from price cuts in January.
On Sunday, Tesla cut the price of a Model S by $5,000, bringing the base version to $89,990. Meanwhile, the price of a Model X SUV dropped by $10,000, bringing a base version to $99,990, according to prices on Tesla’s website.
Despite their strong rally since January 6, shares are still below the 200-day mark. That key level looms as a potential resistance area. Shares closed Monday about 50% off their 52-week high. Aggressive investors can use the February 16 high of 217.65 as a potential entry. To be safe, however, Tesla stock should clear the 200-day line, which is now below 221.
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 jumped 1.85% on Monday, closing at their highest level since February 15. Early Monday, Goldman Sachs initiated coverage with a buy rating and 199 price target, which was a 31% premium to Friday’s close.
Microsoft shares moved further above the 200-day line after Monday’s 0.6% gain. The stock is still around 20% of its 52-week high after the latest decline. MSFT shares rose 0.3% on Monday.
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