Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. The stock market suffered further losses on Wednesday amid rising Treasury yields, Apple iPhone woes and rising China Covid cases.
X
The Nasdaq is nearing its worst bear market close in more than two years. The Dow Jones dropped a key position.
Apple (AAPL) fell again, setting up a new bearish low. AAPL stock is at risk of falling below $2 trillion. Tesla (D.S.L.A), which ended another bear market and rose modestly. But that only pared a steep weekly loss.
Energy stocks tumbled as crude and natural gas prices tumbled, with natgas and coal producers hit hard.
But many energy stocks are showing resilience. Exxon Mobil (XOM), Chevron (CVX), Schlumberger (SLP), Valaris (VAL) and, to some extent, First Solar (FSLR) hold up reasonably well.
But whether these stocks make real progress from here depends on whether volatile energy prices rise.
Peaceful earnings
After closing, the egg maker Cal- Maine (peace) reported an increase in revenue that slightly missed fiscal Q2 views. CALM shares fell 5% in extended trading, as earnings jumped 110% and the egg producer declared a $1.35-a-share dividend. Shares fell 2.5% to 62.19 in the regular session on Wednesday. This pulled CALM shares back within the 5% chase zone of the 60.11 handle buy point. But Cal-Maine could open Thursday below that threshold.
Dow Jones Futures Today
Dow Jones futures fell 0.1%. fair value. S&P 500 futures were flat and Nasdaq 100 futures rose 0.3%.
The 10-year Treasury yield fell 3 basis points to 3.86%.
Remember that it is an overnight operation Dow futures The next routine elsewhere doesn’t necessarily translate into actual trading stock market session.
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Stock market on Wednesday
The stock market continued to decline, with all major indexes down more than 1%.
The Dow Jones industrial average fell 1.1% on Wednesday Stock market trading. The S&P 500 index fell 1.2%. The Nasdaq composite yielded up 1.35%. The small-cap Russell 2000 yielded 1.6%.
Apple shares fell 3.1% to 126.04, an 18-month low. TrendForce cut its 2022 iPhone shipment forecasts due to recent lockdowns at Foxconn’s Zhengzhou site. It cut its forecast for exports to early 2023, citing Foxconn’s labor shortage.
The Dow Jones tech titan is on track for its sixth straight weekly loss and its worst monthly loss in four years. The valuation of AAPL stock ended at $2.005 trillion.
Tesla rose 3.3% to 112.71 after falling 11.4% on Tuesday, ending a seven-day losing streak. The EV company is down nearly 15% for the month. Late Wednesday, Morgan Stanley analyst Adam Jonas cut his TSLA stock price target to an even higher 250, but cut his Q4 delivery target to just 399,000 EVs. Tesla rose 1% overnight.
U.S. crude oil prices were down 0.4% at $79.23 a barrel. Natural gas futures fell 5.8%.
The 10-year Treasury yield rose 3 basis points to 3.89%. That’s up 49 basis points from 3.4% on Dec. 7, almost all of the gain since Dec. 15.
ETFs
Among growth ETFs, the iShares Expanded Technology-Software Sector ETF (IGV) down 1.1%. VanEck Vectors Semiconductor ETF (SMHretreated 1.3%. Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) fell 0.5% to a fresh five-year low. ARK Genomics ETF (ARKG) yielded up 0.6%, which was lower than its June peer. Tesla stock remains significant across Arc Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 4% and the Global X US Infrastructure Development ETF (sidewalkDown 1.75%. US Global Jets ETF (JETS) decreased by 2.4%. SPDR S&P Homebuilders ETF (XHBfell by 2%. Energy Select SPDR ETF (XLE) retreated 2.2%, with XOM and CVX stocks easily the top components, and SLB stock coming in third. Fund Selection SPDR ETF (45Decreased by 0.35%. Health Care Select Sector SPDR Fund (XLVIt gave up to 0.65%.
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Energy Stocks to Watch
Exxon shares fell 1.6% to 108.38, below the 50-day line for the day after recently regaining that key level. XOM stock is 114.76 Point to buy From a flat surface above a frontal joint. But a move above Tuesday’s high of 110.47 would provide an early entry opportunity.
Chevron stock looks similar to ExxonMobil. The stock fell 1.5% to 176.98, falling below its 50-day low. CVX stock has a Flat base Next to the previous consolidation, with a buy point of 189.78 MarketSmith analysis. Investors could use 180.33, just above Tuesday’s high, as an early entry for CVX stock.
Schlumberger shares retreated 1.7% to 52.60, finding support at a 10-week line. SLB shares have a 16%-deep consolidation above/behind depth cup base. The official buy point is 56.14. But investors can use 54.28, just above the Dec. 5 high of 54.18, as SLB stock’s initial entry.
Valaris shares fell 2.6% to 64.74, slightly higher after testing the 10-day, 21-day and 50-day lines. The offshore contract drilling company has a 70.27 buy point above a 17%-deep cup base. Handle with cup method. Buy point is 70.27. Investors can use 67.75, just above Tuesday’s, early entry. It can develop into a perfect handle buying point in a few days.
First Solar fell 2.7% to 146.17, losing further ground from the 50-day line, but fell off an intraday low of 142.35. The FSLR stock needs some work and can easily break from this point. Other solar stocks that have been hit hard will also improve. But let’s see if First Solar can regain its 50-day and 21-day lines. Then there may be a trendline or maybe a dec. A move above the 21 high of 162.20 could provide an early entry. FSLR stock may make a new low by the end of next week.
Market analysis
The stock market had another rough session on Wednesday.
The Dow Jones, which made gains on Tuesday, was unable to resist on Wednesday. The Dow closed below its rising 50-day moving average for the first time since Oct. 21.
The S&P 500 continued to decline from its rising 50-day line. The benchmark index closed lower last Thursday, but finished with its worst result since November 9. The S&P 500 outperformed, Generic (GNRC) and Tesla shares were the S&P 500’s biggest losers in 2022. Not exactly encouraging.
The Russell 2000 pared Thursday’s lows, hitting its worst level in two months.
The Nasdaq composite fell 135 points from its Oct. 13 bear market intraday low. The tech-heavy index ended at its weakest close since July 2020. Apple stock and other growth names fell.
Until there is clarity on the Fed rate end game and the economic outlook – including China’s covid surge – the stock market will do well. Major indexes now perform even worse.
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What to do now
The stock market is not doing well. While some sectors are in better shape than others, it is difficult for any stock to make much progress. Sectors and individual stocks can also deteriorate quickly.
Investors may have small positions in some promising sectors, but should avoid growth for the time being. Nothing wrong with being money. Keeping your financial and mental capital intact is critical.
But work on your watch list. Many stocks from various sectors are near buy points or may be early if the market offers. Focus on stocks with strong relative strength and key positions. Don’t rule out flexible names that don’t yet have a clear buying point.
If you’re having a bad year, you’re not going to make it through the final two trading days of 2022 with market difficulty. Learn from your mistakes and prepare for the next sustainable market rally in 2023.
According to Big picture Each day should be in sync with the direction of the market and the leading stocks and sectors.
Follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.
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