Overnight Dow futures tilted higher, along with S&P 500 futures and Nasdaq futures. The stock market rally pulled back from major resistance on Monday amid inflation and recession fears heading into key economic data, along with renewed concerns over China.
The Nasdaq, which led last week’s gains on the major indexes, posted the biggest losses on Monday. Treasury yields still upside down, a warning of recession.
Chinese stocks were a big loser, as Covid restrictions returned and regulators imposed fines for shares. Technology companies, including Ali Baba (Baba).
BABA and . stock Lee Otto (LI), which entered the week around point buying, fell on Monday. at the same time, AstraZeneca (AZN) and Hershey (HSY) performed well, reflecting the defensive trend.
Tesla (TSLA) and TWTR stock plummeted after Tesla CEO Elon Musk moved late Friday to end Twitter’s $44 billion acquisition. Twitter (TWTR) vowed to fight in court to close the deal.
Li Auto, Hershey and AZN stocks are listed at IBD 50. Hershey was Monday’s stock IBD. The video included in the article highlights market movement and analyzes BABA, AstraZeneca and Hershey stocks.
Dow jones futures contracts today
Dow futures rose 0.1% against stocks. fair value. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.1%.
Crude oil prices fell 1%.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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stock market rise
The stock market rally lost steam on Monday, with major indexes closing near session lows.
The Dow Jones Industrial Average was down 0.5% in stock market trading on Monday. The S&P 500 fell 1.15%. The Nasdaq Composite Index fell 2.3%. Small capital Russell 2000 decreased by 2%.
US crude oil prices fell 0.7% to $104.90 a barrel, off its morning lows.
The 10-year Treasury yield fell 11 basis points to 2.99%. The two-year yield fell 5 basis points to 3.07% inverted again along a large portion of the yield curve. The one-year Treasury yield rose 4 basis points to 2.99%, matching the 10-year rate.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) lost 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 0.7%. The ETF (IGV) in the iShares Expanded Tech-Software Sector (IGV) fell 1.7%. VanEck Vectors Semiconductor Index (SMH) slid 2.4%.
The SPDR S&P Metals & Mining ETF (XME) is down 1.65% and the US Global X Infrastructure Development Index (PAVE) is down 0.4%. The US Global Jets ETF (JETS) fell 2.3%. The SPDR S&P Homebuilders ETF (XHB) is down 0.5%. Shares of Energy Select SPDR ETF (XLE) and Financial Select SPDR ETF (XLF) fell 0.8%. SPDR Fund (XLV) for the healthcare sector fell 0.25%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) sold 6.9% and the ARK Genomics ETF (ARKG) 5%. Tesla stock continues to dominate among Ark Invest ETFs.
Top 5 Chinese stocks to watch right now
Over the weekend, the regulators fined Alibaba, Tencent (TCEHY) and several other technology companies for failing to disclose some of their previous acquisitions. The fines of 500,000 yuan were relatively small, but it raised concerns that Beijing’s crackdown on the Chinese. The tech giants are not done.
Macau has closed casinos and most businesses for a week, reviving concerns about China’s Covid restrictions.
Alibaba shares fell 9.4 percent (109.57 percent), to close below its 21-day moving average for the first time since late May. Last Thursday, BABA stock moved above the 200-day line and shed some resistance above the 121 level, providing a solid entry. Shares fell below those key levels on Friday.
While a strong move above last week’s highs could be actionable, BABA ideally would form a consolidation above the 200 day line.
me stock cars
Li Auto stock fell 4% to 37.33. Just below 37.55 buy points. Stocks are still significantly extended from the 50-day line. LI stock is likely to form a shallow base above the long and deep consolidation. The past few weeks can be seen as a handle to a rule dating back to late 2020.
AstraZeneca stock fell 0.3% to 66.75 after flirting with a 67.50 double-bottom buying point, according to MarketSmith analysis. AZN stock’s relative strength line, the blue line in the provided charts, is just below the rise.
HSY stock rose 0.4% to 220.65, just below 222.75 cups with a buy point handle. While defensive stocks are preferred at the moment, that doesn’t mean they are safe. Several food and beverage plays, including Hershey’s stock, fell on May 18. However, stocks have rebounded since late June.
Musk vs. Twitter Saga
In the face of buyer’s remorse, Musk said late Friday that he no longer wanted to buy Twitter, something he’s signaled vigorously over the past several months. Twitter said the deal is a bargain, and it’s moving to force Musk to go ahead with the $44 billion, $54-a-share acquisition. Twitter hired a heavyweight merger law to represent it. Legal experts say Musk has a weak case.
Twitter’s stock fell 11.3 percent in Monday’s regular session to 32.65, its lowest since mid-March. TWTR stock hit a two-year low of 31.30 on February 3rd. 24.
After the shutdown, Twitter, via his attorney, said Musk’s attempt to terminate the acquisition was “invalid and illegal.”
Tesla stock, which rose slightly near the open, fell 6.55% to 701.99. It is possible that some or even most of Monday’s losses reflected market weakness caused by growth and China concerns. TSLA stock fell back below the 50-day line after closing above that level on Friday for the first time in two months. Stocks also fell slightly below the 21-day line.
Tesla archive goes into production ramp up
Market Rise Analysis
Given the market’s gains last week to key levels, Monday’s pullback was not surprising, especially with negative China news and a lot of major data released.
The Nasdaq has pulled back from its 50-day and 10-week moving averages. which served as a major resistance in 2022. This does not mean that this test has already failed. The indicator can stop around these levels for several days or weeks before the breakout.
The Nasdaq closed just below its 21-day moving average. The S&P 500, Dow Jones and Russell 2000 also undermined that level in the short term.
Away from China news, it’s hard to be brave at current levels with major news.
Wednesday’s CPI is expected to show a slight rise in inflation from a 40-year high in May at 8.6%. Core inflation should cool down a bit. With gasoline prices dropping significantly since the June 14 peak, and with commodity prices falling sharply over the past several weeks, headline inflation should ease. So it is unclear how the markets will react to the June inflation data.
It looks like a 75 basis point Fed rate hike in late July, with little chance of a full percentage point. The real impact will be on the impact of future interest rate hikes by the Fed. But policymakers will get two more CPI and jobs reports before the September meeting, with a slew of other data by the November Fed meeting.
at the same time, c. B. Morgan Chase (JPM), Morgan Stanley (MS) and Delta Airlines (DAL) early Wednesday, with many other banks and United Health (un) on tap later in the week.
Guidance will be key amid rapid changes in the economy.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
With the market reaching resistance ahead of major economic and corporate news, investors may not want to increase their modest exposure in the very short term. Some sectors are operating, notably defensive or defensive growth names such as HSY and AbbVie stocks. But if the market rebounds strongly, defensive names may sell off or lag. So don’t focus too much on a particular sector or topic.
Investors may want to take partial profits from any recent winners.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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