Dow Jones futures fell on Wednesday morning, along with S&P 500 futures and Nasdaq futures. Midterm election results point to a GOP House while Tesla CEO Elon Musk sells more TSLA stock. Disney and Meta platforms are also in focus, along with Bitcoin.
Stock markets rallied on Tuesday morning, boosted by falling Treasury yields and a falling dollar. Major indexes rallied as Bitcoin and other cryptocurrencies plunged in a surprise Binance-FTX takeover deal. But stocks recovered somewhat by the end of the session.
Stocks related to bitcoin, such as crypto exchanges Coinbase (COIN), trading app Robinhood Market (HOOD), cryptocurrency custodian Silvergate Capital (SI) and Bitcoin miners Digital Marathon (MARA) sold out.
In the future, the consumer price index skyrocketed.
However, Disney stock has been consistently falling in pre-market trading due to earnings and declines Disney + subscriber growth very strong. OXY stock, more than 20% owned by Warren Buffett Berkshire Hathaway (BRKB), a slight decrease in mixed income. LCID stock plunges amid weak Q3 earnings and Lucid Air booking refusal. ARRY stock surged in Strong earnings and guidance.
Meta Job Cuts
Facebook parents Meta . Platform (METACEO Mark Zuckerberg told employees on Wednesday morning he would lay off more than 13,000 employees, or 13% of employees, taking responsibility for the company’s mistakes. Wednesday’s layoffs were widely expected.
Zuckerberg also showed less spending on infrastructure.
META stock, which recently hit a multi-year low, was up 5% in pre-market trading.
Arista Networks (NET), spiked after Meta’s Q3 report pointed to a large, slight drop in metaverse spending.
Tesla shares were up more than 1% Wednesday morning. Late Tuesday, Tesla CEO Elon Musk revealed that he sold 19.5 million shares for $3.95 billion on November 4, 7, and 8 that could help pay off. for his recent Twitter deal, though Musk said in early August that subsequent stock sales were the last. he will need.
Musk has yet to declare that he has completed his latest sale.
Musk’s latest stock sale may have helped Tesla stock drop recently. Rising Chinese subsidies and concerns about Elon Musk’s Twitter reign could also affect TSLA stock.
Tesla shares fell 2.9% to 191.30 in Tuesday trading after falling to 186.75 on the day, just above the May 2021 low.
The results of the midterm elections are still being released. Republicans are likely to retake the House, but the Republican wave will likely be a ripple. The Senate is still up for grabs, with a possible Georgia run towards a run. Another 50-50 Senate is possible.
Whatever the end result, President Joe Biden and the Democrats will likely no longer have full control of the White House and Congress. Financial markets tend to perform better with a standstill in Washington. Traditionally, stocks also rallied well into the third year of a presidency.
A divided government could be a positive for Wall Street and good news for defense companies, private prisons and especially drug manufacturers. Then again, the markets may have priced in some of it.
Dow Jones Futures Today
Dow Jones futures are down 0.25% from fair value, with DIS stock weighing on blue-chip stocks. S&P 500 futures fell 0.2%. Nasdaq 100 futures lost 0.1%, even as META and Tesla shares rallied.
The yield on the 10-year Treasury note rose 1 basis point to 4.14%.
Crude oil futures fell 1%. Natural gas sinks 4%. Copper fell slightly.
Bitcoin slipped again, pushing Bitcoin-related stocks like Coinbase lower.
China’s consumer inflation rose less than expected. Wholesale prices drop.
Rally stock market
The stock market rally edged higher on Tuesday morning but then bounced back in the afternoon as the Bitcoin meltdown spilled over into equities. The S&P 500 and Nasdaq briefly turned negative before recovering.
The Dow Jones Industrial Average rose 1% on Tuesday stock market trading. The S&P 500 index rose 0.6 percent. The Nasdaq composite rose 0.5%. The small-cap Russell 2000 posted gains.
Tesla stock is about to drop near its May 2021 low.
Apple and Microsoft shares rose 0.4%, Google shares rose 0.5% and Amazon fell 0.5%. All are up this week but after falling last week.
The yield on the 10-year Treasury note fell 9 basis points to 4.13%.
The US dollar fell significantly for the third day in a row, hitting its lowest level since late September.
US crude oil prices fell 3.1% to $88.91 a barrel. Natural gas futures prices fell 11.6%, continuing to fluctuate widely on a daily basis.
Despite the weaker dollar, Bitcoin plunged as the world’s No. 1 cryptocurrency exchange Binance agreed to acquire rival FTX, which is facing a liquidity crisis. It is a doubt that the Binance-FTX deal will actually happen, with FTX facing massive withdrawals over the past few days. Just a few months ago, FTX and founder Sam Bankman-Fried looked like potential saviors for other ailing crypto companies.
Bitcoin fell to $17,484.20 on Tuesday, its lowest level since November 2020. Although it recovered slightly on Tuesday afternoon, it is currently trading around $17,500 after touching. $17,266 overnight. The pioneer digital currency broke below $20,000 on Monday night. Ethereum, Dogecoin and other cryptocurrencies also show similar or even greater losses.
The FTX token crashed 80% on Tuesday after massive losses in recent days and weeks.
COIN stock fell 10.8% to a 4-month low. Binance’s purchase of FTX could create a new major competitor to Coinbase, which is also reeling from Bitcoin’s woes and concerns about crypto-related businesses.
HOOD stock, which includes Bankman-Fried as an investor, fell 19%. MARA stock fell 5.3% to its lowest level since July. After closing, Marathon Digital reported a larger-than-expected loss while revenue fell 75%.
SI shares fell 23% to their lowest level since December 2020.
Tesla still owns some Bitcoin, while Elon Musk has been holding onto Dogecoin for a while.
Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) fell 0.3%, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) increased by 0.1%. iShares Expanded Software-Technology Sector ETF (IGV) rose 1.3%, with MSFT stock being the key component. VanEck Vectors Semiconductor ETF (SMH) increased by 2.2%.
Market aggregation analysis
The stock market rally looked badly damaged last Thursday following hawkish comments by Fed Director Jerome Powell. But it has bounced back in the past three sessions, even with Bitcoin’s woes.
The Dow Jones index erased last week’s highs after retrieving the 200-day line on Monday.
The S&P 500 index edged slightly higher above its 50-day line, though it remained below its November 1 near-term high.
Nasdaq, weighed down by Tesla and the tech disaster, has hit resistance at its 21-day moving average. It remains below the 50-day level and away from the 200-day level.
But the equally weighted Direxion Nasdaq-100 ETF (QQQE) rose just over 1% to break above its 50-day threshold.
Falling Treasury yields helped stocks lift on Tuesday, while the falling dollar was the main driver in the last three sessions.
Midterm election results could spur market movement, but Thursday’s CPI inflation report could be key. A tame CPI could give hope for a slower rate hike by the Fed and lower peak rate. Yet another hot inflation figure could trigger heavy selling of stocks and bonds.
Not many new buying opportunities on Tuesday.
GlobalFoundries (GFS) rises above the trendline and the handle is just too low after earnings.
Albemarle (ALB) cleared an early, but quick entry and ran to its official buy point, closing just below that key level. However, ALB stock is staying above its 50-day mark after a big move from the Nov. 3 intraday low.
Some LNG stocks are nearing a buy point.
Technological weakness remains a concern. Chip stocks are recovering, with the SMH ETF convincingly above the 50-day line. Megacap technologies such as Apple (AAPL) is trying to recover, but after major sell-offs. The same goes for cloud software.
What to do now
The stock market rally is showing resilience after last week’s sharp declines, with the Dow Jones and S&P 500 regaining key levels. Investors may still want to be cautious, with the CPI inflation report looming. Also, there aren’t many actionable stocks right now, although many are being set up.
Investors should be ready to take action by continuing to engage and build your watchlist. Growth stocks are still generally unpopular, so make sure you’re casting a broad net to find the stocks and sectors that are leading.
Definitely be aware of the earnings that still work. Some stocks have delivered big returns, while others have recovered strongly from their initial declines. But there have also been some high sell-offs, as shares of Disney and Lucid showed overnight.
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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