Dow Jones rises despite Microsoft selling Beware of buying the bright spot

Dow futures were little changed overnight, along with S&P 500 futures and Nasdaq futures.


Shares traded up and down on Wednesday, amid a Microsoft (MSFTA sell-off, stronger-than-expected economic data, and a still hawkish Fed, obviously worried about a rally in the market undermining their fight against inflation. The major indices finally closed slightly higher in a largely internal session.

an Apple (AAPL) And the Tesla (TSLA) rebounded, recouping a fraction of Tuesday’s steep losses.

China’s Internet stocks were higher on Wednesday, with BABA stocks, (Dinar) And the binduodu (PDD) after strong gains on Tuesday. Hopes are helping at the height of the coronavirus wave in China, with electric car makers in China and casinos focusing on Macau soaring. But a positive regulatory move to Ali Baba (BabaAffiliate Ant Group has given a special boost to e-commerce and Internet names. But JD stock and peers may have already been extended.

Neurobiological Sciences (nbix), General Electric (GE), Super microcomputer (SMCI), Rio Tinto (Rio), Starbucks (SBUX), Halozyme treatments (Hello) And the dexcom (DXCM) are all holding up relatively well.

NBIX stock is running IBD Leaderboard, while HALO stock is on the leaderboard watch list. SMCI stock and PDD stock are at defect 50. It was Rio Tinto on Wednesday IBD stock today.

GE stock and SBUX stock were arguably actionable on Wednesday, while RIO, Neurocrine Bio, Halozyme and Dexcom stocks are trading near key moving averages. But some of those names came from earlier heights, even closing in a bit slower.

But investors should be wary of “buying the blip” when stocks and the broader market show strength during the day or in a plenum. It’s still time to be careful about any new purchases.

The video embedded in this article discussed Wednesday’s market action and analyzed Alibaba, Rio Tinto, and SMCI stocks.

Dow jones futures today

Dow Jones futures fell against fair value. S&P 500 and Nasdaq 100 futures changed little. CEO Andy Jassy said in a note posted on the company’s blog late Wednesday that Amazon will cut more than 18,000 jobs, confirming a Wall Street Journal report. When the e-commerce and cloud giant announced in November that it had begun laying off workers, Amazon (AMZN10,000 jobs are expected to be cut. AMZN stock rose about 2% in extended trade.

Remember to work in overnight Dow Jones futures contracts and elsewhere that does not necessarily translate into actual trading in the next regular session Stock market share.

Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live

Fed Minutes, Economic Data

The Fed’s minutes from its December policy meeting, released at 2 p.m. ET on Wednesday, showed that Fed officials have continued to see interest rates elevated “for some time.” Not a single policymaker expected any rate cuts in 2023, though markets did price in some cuts late in the year.

One of the reasons policymakers are cementing their hawkish stance in the Fed’s minutes and recent rhetoric is to curb the rally in stock and bond prices that is undermining the battle for inflation.

Fed participants, noting that their expectations for interest rates were higher than market targets, said they feared that “undue easing in financial conditions” would “complicate” the central bank’s efforts. A bond rally that lowers market rates directly undermines the Fed’s efforts with official rates. A rise in the S&P 500 could increase consumer spending.

Policymakers would rather use rhetoric to dampen financial markets than get tougher on actual policy.

Earlier at 10 a.m. ET Wednesday, the Labor Department reported that job openings for November fell to 10.45 million from October’s revised upwards of 10.51. Economists had expected a decline to 10.1 million.

Also at 10 am, the ISM Manufacturing Index fell 0.7 points to 48.4, falling further below the break-even 50 level. But it slightly topped views of 48.1.

On Friday, investors will get the December jobs report. Fed Chairman Jerome Powell and his fellow policymakers will want to see slower growth in employment and wages.

stock market wednesday

The stock market fluctuated near the open, rebounded for a solid gain, and then pulled back somewhat in an up and down session.

The Dow Jones Industrial Average rose 0.4% on Wednesday Stock market trading. The S&P 500 rose 0.75%, with MSFT among the biggest losers. The Nasdaq Composite advanced 0.7%. small capital gain russell 2000 1.25%

Microsoft stock fell 4.4% as UBS downgraded Dow Jones on Azure cloud computing and Office software news. the supplier Arista Networks (network).

Apple stock rose 1%, off its intraday high. Tesla rebounded by 5.1%. Both were on the inside after days of aggressive selling on Tuesday to market lows.

US crude oil prices fell 5.3% to $72.84 a barrel. Despite China’s optimism among Chinese internet and casino stocks, the Covid wave in the country is adding to global demand concerns for energy and other commodities. Natural gas futures rose 4.6% but after falling in recent days and weeks.

The 10-year Treasury yield fell 8 basis points, to 3.71%. Bond traders fear that continued strong jobs data will keep the Fed raising interest rates, sending the US into recession.

Tesla vs. BYD: EV Giants Vy for the Crown, But Which One is a Better Buy?

Exchange Traded Funds

between the The best mutual fundsThe Innovator IBD 50 ETF (fiftyand creator of the IBD Breakout Opportunities ETF (fit) offering 0.5%. iShares Expanded Technology and Software ETF (IGV) rose 0.7%, even as Microsoft stock fell. VanEck Vectors Semiconductor Corporation (SMH) appeared by 2.5%.

SPDR S&P Metals & Mining ETFs (XME) gained 2.5%. US Global Gates Foundation ETF (Planes) climbed 5.2%. SPDR S&P Homebuilders ETF (XHB) by 2.45%. Energy Defined Fund SPDR ETF (xle) lost 1 cent. SPDR Health Care Sector Selection Fund (XLV) increased by 0.3%.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(jumped 4.3% and the ARK Genomics ETF)ARKG) increased by 3.8%. Tesla stock remains a major holding via Ark Invest’s ETF. Kathy Woods’ Ark has been uploading to TSLA again in recent months, including on Tuesday.

Top five Chinese stocks to watch now

Chinese stocks rose

Investors are bullish on China as it reopens after years of “zero Covid”. The resulting covid wave is taking its toll, but there is optimism that infections will peak in major cities, or will soon.

Meanwhile, Chinese regulators have agreed to allow billionaire Jack Ma’s Ant Group to raise $1.5 billion for the fintech giant’s consumer finance unit. E-commerce giant Alibaba owns 33% of Ant. China’s campaign against tech and internet giants kicked off in late 2020 with a last-minute pause to Ant Group’s planned initial public offering.

BABA stock rose 13%, rebounding from its 200-day line to the highest level since late August. Investors could have used a trend line or a short-term rally as early entries for Alibaba stock, but it looks like a stretched low.

Shares of Alibaba rivals and PDD rose 15% and 7.7%, respectively, adding to Tuesday’s gains. But both seem farfetched now.

Meanwhile, centered on Macau Las Vegas Sands (LVS) And the Wayne Resorts (where) jumped again, looked stretched too. Giant EV BYD (BYDDF) and startup Lee Otto (L.I) raced higher, extending gains from the 50-day streak, but still far from its 200-day averages.

Market rally analysis

The attempt to rally the market witnessed a session of ups and downs. Major indices closed higher, but once again hit resistance at some key levels.

The Dow Jones rose again above the 50-day and 21-day lines, during the day, and closed just below those key levels.

The S&P 500 reached its 21-day moving average, not too far from the 50-day, but closed below that key level. Russell 2000 did a similar job.

The Nasdaq rose but remained below the major moving averages.

The S&P 500, Russell 2000, and Nasdaq all held inside sessions.

Microsoft stock clearly hasn’t helped, especially with related companies also under pressure.

Invesco S&P 500 Equal Weight Fund (RSP), which do not gain bulky weight like MSFT stock, United Health (United nations), Apple and Tesla, they showed more fundamental strength. The RSP jumped 1.6%, moving above the 21-day, 50-day, and 200-day lines.

Major indexes have not yet been organized Follow-up day To confirm the attempt to climb the new market. Decisively clearing the 21-day and 50-day lines will be a major test for the S&P 500. Friday’s jobs report could be a catalyst for big market gains or a sell-off.

In addition to many tech and growth giants lagging behind, UnitedHealth giant Dow and other health insurers have been under pressure to start 2023, even the group leader. Cigna (CI).

It’s time to market with IBD’s ETF Market Strategy

What are you doing now

With major indexes higher for a full session, several potential leaders flashed buy signals on Wednesday, including General Electric and Starbucks. Rio Tinto, Hallozyme, Dexcom and Neurocrine Biosciences are ready for buy signals, along with many others.

if The market continues to advance, and investors who buy these stocks are likely to come out with winners. But the stakes are so high that the major indices will fall again, either with a sustained move toward recent lows or with a more volatile move.

So investors should be wary of “buying the bright spot,” and taking advantage of any sign of market strength to increase exposure. Many stocks reverse lower in days, hours or minutes. It’s still a good time to be mostly in cash, if not completely on the sidelines.

If you feel compelled to buy stocks in the current climate, keep your positions small. Take partial profits quickly to avoid quick round trips.

But those sellouts, buy signals and breakouts can quickly fade if the market pulls back again.

Read The Big Picture Every day to keep up with the market trend, stocks and leading sectors.

Please follow Ed Carson on Twitter at @tweet For stock market updates and more.

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