Dow futures fell slightly after hours, along with S&P 500 futures and Nasdaq futures, as attention turned to the Federal Reserve’s meeting announcement on Wednesday. advanced micro devices (AMD) and overnight earnings at SNAP.
The stock market rebounded on Tuesday, recovering much of Monday’s slump. The Nasdaq Composite Index is now in a range direction of force.
Before the announcement of the Fed meeting on Wednesday afternoon, many key economic reports and the OPEC+ meeting will come in the morning.
A parent of AMD and Snapchat pop (pop) reported after closing.
AMD earnings and revenue Little beat views. The chipmaker expects first-quarter revenue to decline 10%, worse than the consensus but better than feared. AMD stock rose slightly after hours. Shares rose 3.7 percent to 75.15 on Tuesday. AMD stock is bottoming at 79.33 buy points. It is well below the 200 day line, but a real breakout would involve clearing this key level.
AMD competitor nvidia (NVDA) fell in late trading. NVDA stock rose nearly 2% to 195.37 on Tuesday, in a buying range from a short cup base.
windfall profits Views topped, but revenue just missed. The social network sees first quarter revenue tracking as a 2%-10% decline. SNAP stock fell 15% overnight. Shares rose 4.2 percent to 11.56 on Tuesday.
Snap earnings and guidance identification platforms (meta) And pinterest (pins). Facebook parent Meta platforms (meta) Wednesday Night Reports, with pinterest (pins) next Monday. META stock fell of late, after closing just below its 200-day line. PINS stock is down modestly. Pinterest has a narrowing three-week entry modestly above the major moving averages.
China EV sales
As early as Wednesday, Tesla’s competitor China New (NIO), Lee Otto (L.I) And Xpeng (XPEV) will report deliveries in January. The Lunar New Year holiday, as well as severe Covid infections, caused sales last month. So it’s hard to draw conclusions about February and beyond, especially in the aftermath Tesla (TSLA) price cuts to which competitors are still reacting.
Nio and Xpeng stocks are in bottom bases, but well below the 200-day lines. Li Auto is close to 200 days. Electric vehicle and battery giant BYD (BYDDF) flashes a strong entry from the 200-day line, with January sales due later this week. Tesla stock jumped nearly 41% in January, crossing the 50-day line, but has no clear buying point.
Fed rate hike expectations
the The Federal Reserve is set to slow down interest rate hikes For the second straight meeting, the fed funds rate increased by a quarter point at 2pm ET Wednesday, to a range of 4.5%-4.75%. This follows a half-point rise in December following four consecutive increases of 75 basis points in November.
Markets overwhelmingly expect another quarter-point rate hike in late March, to 4.75%-5%. But then investors tend towards no more increases.
So the central bank is hinting at the expectations of a rate hike, inflation and the economy will be key factors. Will the Fed’s policy statement keep the language that it expects “continued increases?”
Fed Chair Jerome Powell, speaking at 2:30 PM ET, will certainly reiterate the Fed’s commitment to keeping interest rates high to bring down inflation. But with rate hikes slowing and near a pause, Fed Chair Powell may be more cautious, keeping central bank options open.
Before the Fed meeting announcement, investors will get another batch of economic data. The ADP employment report for January will be released at 8:15 a.m. ET, with employment opportunities for December and the ISM manufacturing index for January at 10 a.m. ET.
The January jobs report is due on Friday. Before the March meeting, the Fed will have the February jobs report, as well as inflation reports for January and February.
Early Tuesday, the labor cost index came in slightly softer than expected. The ECI, a broad measure of workers’ compensation, rose 1% in the fourth quarter, the third straight quarter of slowing growth.
Dow jones futures today
Dow futures fell 0.2% against fair value. S&P 500 futures fell 0.3%. Nasdaq 100 futures fell 0.5%.
The 10-year Treasury yield fell 3 basis points, to 3.5%.
The Caixin China manufacturing index rose 0.2 points in January, to 49.2. The previous day, China’s official manufacturing index jumped 3.1 points to 50.1, just above the 50-point mark.
Stock market rise
The stock market rally had a strong session, as it rebounded from Monday’s slump.
The Dow Jones Industrial Average rose 1.1% on Tuesday Stock market trading. The S&P 500 jumped 1.5%. The Nasdaq Composite Index jumped 1.7%. Small cap Russell 2000 jumped 2.4%.
US crude oil prices rose 1.25% to $78.87 a barrel. OPEC+, which includes the oil cartel and key allies like Russia, meets on Wednesday morning. Markets do not expect any change in OPEC+ production quotas.
The 10-year Treasury yield fell 2 basis points to 3.53%, supported by the relatively weak ECI report.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) rose by just over 2%. iShares Expanded Technology and Software ETF (IGV) an advance of 1.4%. VanEck Vectors Semiconductor Corporation (SMH) rose 1.5%, with major holdings of AMD and NVDA stocks.
SPDR S&P Metals & Mining ETFs (XME(gained 1.15% and Global X US Infrastructure Development ETF)cradle) increased by 2.3%. US Global Gates Foundation ETF (Planes) climbed just over 1%. SPDR S&P Homebuilders ETF (XHB) rose 4.8% amid strong earnings. Energy Defined Fund SPDR ETF (xle(by 0.9% and the Financial Select SPDR ETF)XLF) 1.4%. SPDR Health Care Sector Selection Fund (XLV) rose 1.3%
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(jumped 3.7% and the ARK Genomics ETF)ARKG) figured 3.1%. Tesla stock is a major holding across Ark Invest ETFs. Cathie Wood’s Ark also owns a small stake in shares of Tesla rival BYD.
Market rally analysis
The stock market rally picked up on Tuesday, making Monday’s decline look like a normal halt around key levels amid a solid advance.
The Nasdaq Composite Index has regained its 200-day line, near the December highs. The S&P 500 and Dow Jones rose strongly, with blue chips finding support near their 50-day lines.
The Russell 2000 Index has recovered all of Monday’s losses, and then some, now clearly above its late 2022 highs.
Major indices decisively clearing their highs in late 2022 could be a very bullish sign.
The Nasdaq Composite Index and the Russell 2000 are now in a trend of strength, Meet all four conditions. There is no S&P 500 and Dow Jones. A strength trend is a positive sign, but in the past year the market has stalled several times shortly after strength trends took effect.
Wednesday’s Federal Reserve meeting looms. The market bullish expects the end of the rate hike in March or possibly May. Wednesday’s economic data and Friday’s jobs report will help markets interpret Fed Chair Powell’s comments.
Don’t forget about profits. AMD reported late Tuesday. Meta pads are scheduled to be delivered Wednesday night and an Apple (AAPL), Amazon.com (AMZN) and the parent of Google the alphabet (The Google) on tap Thursday night, along with hundreds of others.
These earnings reports can muddy up major indices as well as sectors and, of course, individual names.
Just as AMD’s earnings will affect Nvidia stock and Snap’s Meta moves, Meta’s spending plans will affect the likes of Arista Networks and pure storage (PSTG). Amazon’s earnings are likely to be a catalyst for Etsy stock. Apple’s profits will affect the iPhone ecosystem while Google’s profits will affect a variety of companies.
ANET Stock and Pure Storage are close to early entries, while Etsy, a SwingTrader Holdings, just below the point of purchase.
What are you doing now
The stock market rally is doing well, with a strong uptrend and only minor pullbacks. Leading stocks flashing buy signals that generally work. It was a good time to add exposure.
The announcement of the Federal Reserve meeting and Fed Chair Powell could be a catalyst for large market moves. But it can also be the case for earnings and economic data. Investors should not be too aggressive about taking new positions over the next couple of days, even if the technical picture for the market and certain stocks looks promising.
Remember, if you are going to be aggressive getting into a stock, you have to be ready to get out just as quickly.
Work on your watchlists. Dozens of stocks are setting up or flashing buy signals. You want to keep your eyes on it, and analyze potential targets before you pull the trigger.
Read The Big Picture Every day to keep up with the market trend, stocks and leading sectors.
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