Dow Jones Futures falls in ailing market rally; Tesla CEO Elon Musk will not join the Twitter Board

Dow Jones futures rose early Monday along with S&P 500 futures and Nasdaq futures, while government interest rates continued to rise. Tesla China’s sales were solid in March, but the Shanghai plant is closed as China’s Covid restrictions intensify. Meanwhile, Tesla CEO Elon Musk will not join Twitter (TWTR) Board of Directors.




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The major indices and leading stocks had a negative week as a hawkish Federal Reserve and rising government interest rates took their toll. The stock market rise is “under pressure.”

The Tesla stock had an external negative turnaround week. But it now has control of a weekly chart after driving up sharply. Sales of Tesla China were strong in March, but a shutdown in Shanghai will take a heavy toll on production in April.

In the meantime Apple (AAPL) drove lower and gave a little more weight to its handle while still acting tight. While Tesla (TSLA) and Apple stocks are doing relatively well, most growth stocks are not.

In healthier parts of the market, Callon Petroleum (CPE) trades tightly on a weekly chart despite its “hedgehog” reputation. General dynamics (GD) also acts closely as it creates a new flat base. Molina Health (MOH) have traded tight in a buying zone, while finding significant support over the past week.

Investors should be careful about making new purchases in the current market week.

Elon Musk will not join the Twitter Board

In other news, Twitter’s CEO Parag Agrawa said Sunday night that Elon Musk will not join the company’s board of directors. Musk revealed on Monday that he had become Twitter’s largest shareholder with a 9.1% stake. On Tuesday, Twitter announced he would join the board. The TWTR share rose 27% on Monday. The stock opened up nearly 18% this week, but below Monday’s lowest level.

Tesla stock is on IBD Leaderboard. Tesla and CPE shares are at IBD 50.

The video embedded in this article discussed the action in the mixed market and analyzed Callon Petroleum, General Dynamics and MOH stocks.

Dow Jones Futures today

Dow Jones futures lost 0.5% at fair value. S&P 500 futures sank 0.6 pct. Nasdaq 100 futures fell 0.7 percent.

The 10-year government bond yield rose 7 basis points to 2.78%, signaling another three-year high.

US crude oil futures fell more than 2 percent.

China’s Shanghai shutdown and restrictions elsewhere in the country will take a toll on the Chinese and global economy.

Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


Join IBD experts as they analyze powerful stocks in the stock market rally on IBD Live


Stock market rally

The stock market rise retreated last week as the Nasdaq and small-cap Russell 2000 fell below their 50-day moving average.

The Dow Jones Industrial Average fell 0.3% in last week’s stock market trading despite modest gains at the end of the week. The S&P 500 index fell 1.3 per cent. The Nasdaq composite fell 3.9 percent. Russell 2000 toppled 4.6%.

The 10-year government bond yield rose 34 basis points last week to 2.71%, reaching a three-year high when the Federal Reserve signaled that it will soon begin to cut its massive balance sheet in addition to sharp rate hikes. The Treasury yield curve is no longer inverted as the two-year rose slightly to 2.52%.

US crude oil futures fell 1.2% last week to $ 98.26 per barrel. barrel.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 6.15% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) gave up nearly 2%. iShares Expanded Tech-Software Sector ETF (IGV) fell 4.3%. VanEck Vectors Semiconductor ETF (SMH) fell 7 percent.

As a result of more speculative history stocks, the ARK Innovation ETF (ARKK) fell 10.1% last week and the ARK Genomics ETF (ARKG) 9%. The Tesla stock is number 1 across Ark Invest’s ETFs.

The SPDR S&P Metals & Mining ETF (XME) fell 1.7% last week. Global X US Infrastructure Development ETF (PAVE) fell 3.8%. US Global Jets ETF (JETS) fell 7.3 percent. SPDR S&P Homebuilders ETF (XHB) fell 3.5%, extending a series of losses. Energy Select SPDR ETF (XLE) rose 3.2% and Financial Select SPDR ETF (XLF) fell 0.9%. Health Care Select Sector SPDR Fund (XLV) rose 3.7 per cent.


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Apple stock

Apple stock fell 2.5% to 169.98 last week, closing just below its 21-day line and just above its 50-day and 10-week averages. It adds a little more depth to its handlebars of 179.71. The relative strength line dropped slightly but is still close to record highs. Reports of weaker consumer electronics demand have taken a toll on chipmakers, including iPhone vendors, but the Apple stock itself has fared better. The App Store and other service revenue help isolate the technological titanium from changes in hardware demand.

Tesla shares

The Tesla stock jumped on record deliveries in the first quarter on Monday, hitting a three-month high of 1,152.87 on Tuesday, essentially hitting resistance at a trend line. The TSLA stock then turned lower on Tuesday and ended up falling 5.4% to 1,025.82 for the week, with highs and lows far exceeding the previous week’s low range. External negative turns are bearish action, but can be positive for the Tesla stock chart by offering a real pullback after a major race in just a few weeks. On a weekly chart, the Tesla stock now has a cup-with-handle buy point of 1,152.97, according to MarketSmith analysis. That handle will need one more day to appear on a daily chart.

Without a doubt, Tesla shares could use a slightly deeper, longer handle. Getting below the 21-day moving average and 1,000 level may shake out some more weak holders. More time would also allow the 10-week line to catch up on something for TSLA shares.

Remember, the Tesla stock is an outlier. Very few stocks with a three-digit price-to-earnings ratio hold up well. Can Tesla continue to counteract the trend, or was last week’s turnaround the start of a larger sale? When you consider the latter scenario as an option, you can see how a move below 1,000 could shake out a number of investors.

On the news front, Tesla Austin held a “Cyber ​​Rodeo” Thursday night when the Model Y deliveries got underway. Tesla Berlin began limited deliveries in March. The factories were eventually to give a huge boost to Tesla’s production capacity, but production is likely to scale up slowly.

Tesla sold 65,814 vehicles from its Shanghai plant in March, the China Association of Automobile Manufacturers reported Monday. It was part of industry data for March EV and total car sales. Only 60 vehicles were exported. March reading was Tesla China’s second highest since December’s 70,847.

The Tesla Shanghai factory was closed on 16-7. March and again since March 28 due to the city’s closure amid soaring Covid cases there. It had a modest impact on March production and deliveries, but will have an even higher toll in April.

It is unclear when the plant may reopen. Although the site will be allowed to reopen, the Covid outbreak and restrictions may affect vendors.


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Callon stock

The CPE stock chart has a well-deserved reputation as a “hedgehog” with lots of morning peaks that fade or become negative. The Callon stock has also not had a big upswing like many other energy games. But there are some positive signals. Shares have moved from finding support on their 200-day line to their 50-day line and now their 21-day line.

Meanwhile, despite large intraday fluctuations, the CPE stock fell 0.8% last week to 61.94. It has now formed a three-week-tight offering a 66.48 entrance fee. The tight pattern is almost exclusively within a five-month consolidation, so investors can still use 65.55 as the operating buying point.

A number of other energy stocks are being created or in buying zones, including integrated giants Exxon Mobile (XOM) and Must (SHEL).

General Dynamics stock

General Dynamics shares have been consolidated again after breaking out with other defense contractors when Russia’s Ukraine invasion began in late February. Equities now have a flat base on a weekly chart with a buy point of 255.09. DG stocks have also forged a three-week density within the flat base. Investors could use the tight entry of 246.23, just above Friday’s high, as an early buy point over the bulk of General Dynamics’s latest trading.

Raytheon Technologies (RTX) also has a flat base while Lockheed Martin (LMT) and Northrop Grumman (NOC) is consolidating bullish.

Molina Health Stock

The Molina stock tested its 10-week line last week, then returned to close 0.6% to 337.82. The MOH stock is now close to four weeks and offers a buy point of 347.72. The tight pattern is formed almost exclusively within the buying zone of a former cup-with-handle base. Investors could use the tight entry as an add-on purchase or to start a new position.

Health insurance giants UnitedHealth (UNH) and Anthem (ANTM) has expanded from buying zones, with UnitedHealth earnings due in the coming week.

Analysis of market rally

The stock market rise took a generally negative turn last week, with growth, small caps and midcaps being sold. The trend has been “under pressure” since Wednesday.

The Dow Jones fell slightly for the week, holding support at its 50-day line, just below its 200-day line. The S&P 500 index fell just below its 200-day line, but remained above its 50-day high. The Nasdaq lineup fell sharply, closing the week below its 50-day line, joining Russell 2000 and the S&P MidCap 400.

Just two weeks ago, the market upturn looked broad, with strength across many sectors and with progress easily beating the downturn. But the convention is starting to look narrow and two-part, returning to 2021’s difficult environment.

Energy and other commodity stocks continue to lead, along with doctors, low-cost carriers and defense firms, while REITs and insurance companies are doing well. But growth, retail, housing, travel and traditional banks are struggling.

This is not surprising, with rising rates weighing on growth stocks and housing outputs, while hot inflation is beginning to weigh on discretionary spending.

In the coming week, the Ministry of Labor will publish the consumer price index and the producer price index. Inflation will be warm, but markets can rejoice at signs that price increases are leveling off. The latest retail sales report will indicate whether shoppers are pinching their ear during high inflation.

At the end of next week, China will release GDP data for the first quarter and March reports on retail and industrial production. But it will not provide much insight into the impact of Shanghai’s extensive Covid lockdown, which began on March 28. It will take a heavy toll on global economic growth in April and possibly beyond.

The earnings season is starting to pick up speed, with UnitedHealth on hold on April 14 and Tesla on April 20. It can be a catalyst for individual stocks or sectors or the broad market, up or down.

So while the market upswing is at a turning point, it may not break decisively higher or lower for some time.


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What should I do now

Split rallies are difficult. Even if you only play the strong sectors, the market can quickly rotate away from them quickly, or weakness becomes broad-based. So avoid getting too concentrated in a particular sector while keeping your overall exposure modest.

With volatile market conditions and the outlook for change, investors should remain committed and ready to trade. Resist the temptation to make a lot of new purchases. Focus on building your watch lists to spot the leaders in the next sustained market trend.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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