Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures, respectively Tesla ( TSLA ) rose late as Elon Musk wavered following mixed Q4 earnings. Work Now (Now) and Research Lam (LRCX) reported later. Dow Jones weight Chevron (CVX).
United rental (URI), Steel Dynamics (STLD) and IBM (IBM) added, with Teradyne (TER) on tap tonight too.
The stock market rally stumbled Wednesday morning as Microsoft (MSFT) and Boeing (BA) was among the losers related to the initial investment. Major indexes tested or broke key levels but edged lower, closing at or near intraday highs for the fourth straight session. Key reasons: Boeing turned slightly higher and MSFT stock pared losses.
URI products are available in the IBD Leaderboard view. United Rentals, Lam Research and STLD stocks are in the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures are flat vs. good value, with CVX stock and IBM two blue chips. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.3%. Tesla, LRCX, NOW and STLD stocks are S&P 500 and Nasdaq 100 stalwarts.
The 10-year yield was down 2 points to 3.44%.
Early Thursday morning, investors will receive their first documents on economic growth for the fourth quarter. The GDP report will also include quarterly PCE inflation numbers, providing a strong signal for the December PCE inflation reading on Friday morning. Also Thursday, durable goods orders, new home sales and jobless claims are coming.
Remember that overnight events in the Dow Futures and elsewhere do not necessarily translate to the actual market in the next stock market session.
Tesla financial records
Tesla’s earnings were slightly lower than analysts’ expectations, which have fallen sharply over the past few weeks. Money has not yet been earned, according to FactSet. Tesla recognized $324 million in total operating income, which led to EPS gains.
The car market share fell to 25.9% from 27.9% in Q3 and 30.6% a year ago. That’s under contract. Margins are expected to fall sharply in 2023 following the global price cut earlier this month.
CEO Elon Musk was happy on the conference call. He said the order is doubling production now following the price cut. But the question is how strong will demand be in the coming weeks and months.
Tesla expects production of 1.8 million vehicles, but Musk said 2 million deliveries is the target. Tesla produced 1,369,611 vehicles in 2022, delivering 1,313,851. Transfers have been released by increasing numbers in the last three quarters.
Musk said that production of the Cybertruck will begin by the summer, but the “sound debut” may not happen until 2024. Tesla will provide more details about the upcoming car at the investor day in March 1. That could be a smaller, cheaper EV. That can open up a huge new market for Tesla, including in new markets, but it will face a large number of existing enemies.
Late Tuesday, Tesla said that it will invest $ 3.6 billion in its Nevada gigafactory to produce a semi-car with a 4680 battery. But most of the announcement reiterated the important features of Tesla’s plans that did not materialize from 2014.
TSLA stock jumped 5.5% in extended trading. Shares rose 0.4% to 144.43 in Wednesday’s regular session, coming in at the 50/10 day line after rising from a bear market decline on January 6.
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Chevron Stock Buyback
Chevron will buy $75 billion of its CVX stock, the Dow Jones energy giant said late Tuesday. That represents 20% of the outstanding shares. Chevron Company posted earnings from 6% to $1.51.
Oil majors will report earnings early Friday.
CVX stock rose more than 2% to top 183, returning to the 50-day line. Shares have 189.78 buys from a shallow key. But traders can use a move above Monday’s high of 182.55 as an entry.
Other key costs
ServiceNow’s revenue soared when revenue fell. The major marketing materials also provide guidance on how much you can earn from subscriptions. NOW stock fell sharply overnight, after initial losses. Shares rose 1.2% to 448.77 on Wednesday after breaking their 200-day intraday line.
Lam Research’s earnings beat fourth-quarter forecasts, but semiconductors gave weak guidance and announced job cuts. LRCX stock fell slightly in the long-term trend. Shares closed up 0.2% to 448.40 on Wednesday. Lam’s research product is working on a bottom base, with most of that above the 50-day and 200-day lines. The buy point is 504.65, but a move above Monday’s high will provide a slightly lower entry.
Teradyne’s earnings forecast is more than ideal, but the direction is also not good. TER stock has fallen sharply over time. Shares rose 0.4% to 103.44 on Wednesday, holding above the 200-day line.
Get LRCX and TER following the ASML trigger before Wednesday’s open, as well KLA CORP. (KLAC) by late Thursday.
The cost of Steel Dynamics is beyond imagination. STLD stock rose after hours. Shares closed down 2.2% to 110.41 on Wednesday. Steel Dynamics stock tried to buy at 113.22 last week and pulled back.
Nucor’s earnings are due Thursday morning. NUE stock closed down 1.7% to 156.67. Nucor stock is near the 160.03 buy-to-let point.
United Rentals lost money when their revenue was in debt. But the big rental property has a big direction 2023. The URI application rose well in the night event. Stocks fell 0.3% on Wednesday to 392.48, just on the edge of buying territory from a buying point of 374.01 and the sum goes back to late 2021. URI gains and guidance could be key for equipment manufacturers as heavy as. Caterpillar (CAT).
IBM’s earnings are expected to rise as revenue falls. IBM stock fell slightly after hours. Shares were down 0.5% to 240.61 on Wednesday. IBM stock has formed a flat base at 153.31 to buy after a strong two-month run, but is currently trading below the 50-day mark.
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The stock market started negative but again improved to close little changed, near the best level of the day.
The Dow Jones Industrial Average rose slightly in Wednesday’s trading. The S&P 500 index ended below break-even. The Nasdaq composite fell 0.2%. The small-cap Russell 2000 rose 0.3%.
U.S. crude oil prices rose 2 cents to $80.15 a barrel. Natural gas fell 5.9% to its lowest level since June 2021.
The 10-year yield was down 1 basis to 3.46%.
Among the emerging ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 0.2%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) was down 0.3%. The iShares Expanded Tech-Software Sector ETF (IGV) was off 0.2%, with Microsoft and NOW stocks the main holdings. The highest price of the VanEck Vectors Semiconductor ETF is 0.1%. LRCX stock is SMH holdings
Turning to stocks with more dire news, the ARK Innovation ETF ( ARKK ) rose 0.1% and the ARK Genomics ETF ( ARKG ) rose 0.5%. Tesla is the main stock held across Ark Invest’s ETFs. Cathie Wood’s Uplifting Box.
The SPDR S&P Metals & Mining ETF (XME) climbed 1.25%, and the Global X US Infrastructure Development ETF (PAVE) was flat. US Global Jets (JETS) climbed 1.1%. SPDR S&P Homebuilders (XHB) climbed 0.4%. The Energy Select SPDR ETF (XLE) ended below the break, and the Financial Select SPDR ETF (XLF) rose 0.8%. The Health Care Select Sector SPDR Fund (XLV) received a small share.
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Trading Rally Analysis
The stock market was down on Wednesday morning, but it was up sharply. Major indexes closed higher for the fourth straight session.
The S&P 500 fell 1.7% intraday, breaking its 200-day line and approaching its 50-day line. But the signpost closed well.
The Nasdaq and Russell 2000 composites edged lower, well above their 50-day lines. The Dow Jones fell below the 50-day line, but closed again.
Dow giants Microsoft and Boeing edged higher, but retreated after a small change. Many cloud-related names fit Microsoft’s reduced-loss guidelines.
The leading stocks generally showed healthy behavior, including explosives, travel, health and housing stocks. It says something when one of the biggest complaints in leading stocks is that a stop or pullback in the past week would have been beneficial.
A number of recent breakouts have been pulled back below the buy factor but can still work, e.g. SLB (SLB) Pin (PI) and Medpace (MEDP). In the meantime, some other stocks that have extended from the ground base may be active in the long term, such as Boeing and Paying Shift4 (ANU).
The general market trend is encouraging. The key indexes have yet to clear their peak in late-2022, but they are continuing at those levels.
The fundraising season is still active, with Tesla and ServiceNow considering overnight sales.
Several major economic reports Thursday, Friday and next week, as well as the February 1 Fed announcement, will also stimulate markets in addition to cash.
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What You Should Do Now
Just because the main indexes and many leading stocks found support on Wednesday does not mean that they will continue to do so. A few weeks from now, it may seem obvious that investors should have exposure-up or go on an exit. But it’s not obvious now.
So be careful about adding exposure and stick to the loss reduction formula.
Work hard on your checklist. Cast a wide net: Different segments show strength, which in itself is a sign for marketing campaigns.
Read The Big Picture every day to stay in touch with the market leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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