Dow Jones Futures: GOP Set To Win House In Midterm Elections; Elon Musk Sells More Tesla Stock

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Midterm election results are coming in while Tesla CEO Elon Musk has sold TSLA shares.




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Stock markets rallied early Tuesday, driven by lower Treasury yields and a weaker dollar. Major indices posted strong gains as Bitcoin and other cryptocurrencies plunged on the surprise Binance-FTX acquisition deal. But the stock rallied somewhat after the close.

Bitcoin-related stocks such as cryptocurrency exchanges coin base (COIN), trading app Robinhood Markets (HOOD), the cryptocurrency custodian Silvergate Capital (SI) and Bitcoin mining Marathon Digital (MARA) sold.

Looking ahead, the Consumer Price Index is large.

Main income

Walt Disney (DIS), Suddenly petroleum (oxy), Tesla (TSLA) rival Lucid Motors (LCID) and Array Technologies ( ARRY ) reported late Tuesday.

Disney stock fell sharply overnight on earnings and was lower, though Disney+ subscriber growth was strong. OXY stock, more than 20% owned by Warren Buffett Berkshire Hathaway (BRKB), is low on mixed income. LCID stock sank amid weak Q3 results and falling Lucid Air reservations. ARRY stock rose higher on strong earnings and guidance.

In other news, Meta Platforms (META) will begin widespread layoffs Wednesday morning, according to multiple reports.

Tesla stock

Tesla CEO Elon Musk disclosed that he sold 19.5 million shares for $3.95 billion on November 4, 7 and 8. That could help pay off his current Twitter deal, though Musk said in early August that a share sale was the last he needed. .

Musk’s latest share sale has helped drive Tesla stock’s recent decline. Increased China subsidies and concerns about Elon Musk’s Twitter reign could also take a toll on TSLA stock.

Tesla stock fell 2.9% in Tuesday’s session to 191.30, having fallen to 186.75 intraday, above a May 2021 low.

mid-term elections

On Tuesday night, the results of the mid-term elections started coming in. Republicans are a virtual lock to retake the House of Representatives, but it’s not shaping up to be a big GOP wave. The Senate is up for grabs, but final results in key races could be days away.

After all, President Joe Biden and the Democrats will no longer have full control of the White House and Congress. Financial markets want to do well with the gridlock in Washington. Stocks traditionally do well even in the third year of a president’s term.

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So a divided Congress could be positive for Wall Street, and good news for defense firms, private prisons and drugmakers. So, the markets may have already priced something in.

Dow Jones Futures Today

Dow Jones futures were little changed vs. fair value, with DIS stock weighing in on the blue chips. S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.3%.

China’s consumer inflation rose less than expected. Wholesale prices fell.

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


Join IBD experts as they analyze actionable stocks during the stock market rally on IBD Live.


Stock market rally

The stock market rallied higher on Tuesday morning but then gave back in the afternoon as bitcoin’s decline spilled over into stocks. The S&P 500 and Nasdaq briefly turned negative before recovering.

The Dow Jones Industrial Average rose 1 percent in Tuesday’s stock market trading. The S&P 500 index climbed 0.6%. The Nasdaq Composite advanced 0.5%. The small cap Russell 2000 benefited.

Tesla’s stock sank to its May 2021 intraday low.

Apple stock and Microsoft rose 0.4%, Google stock added 0.5% and Amazon added 0.5%. All are up this week but after last week’s mess.

The 10-year Treasury yield retreated 9 basis points to 4.13%.

The US dollar has fallen sharply for the third day in a row, reaching its lowest point since late September.

US crude oil prices fell 3.1% to $88.91 a barrel. Natural gas futures fell 11.6%, continuing its large daily swing.

Bitcoin Dives

Despite a weaker dollar, Bitcoin plunged as the world’s No. 1 cryptocurrency exchange agreed to buy rival Binance FTX, which faced a liquidity crisis. While there is some doubt that the Binance-FTX deal will actually happen, FTX has been facing massive withdrawals over the past few days. A few months ago, FTX and founder Sam Bankman-Fried looked like a potential savior for other ailing crypto firms.

Bitcoin crashed to $17,484.20, the lowest since November 2020 and is currently trading at $18,500. The leading digital currency fell below $20,000 on Monday night. Ethereum, Dogecoin and other cryptocurrencies showed similar or even bigger losses.

The FTX token fell 80% on Tuesday after heavy losses in recent days and weeks.

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COIN stock sank 10.8% to a four-month low. Binance’s purchase of FTX could create a major new competitor for Coinbase, despite concerns about Bitcoin’s problems and crypto-related ventures.

HOOD stock, which includes Bankman-Fried as an investor, sank 19%. MARA stock fell 5.3% to its lowest since July. After the shutdown, Marathon Digital reported a bigger-than-expected loss while revenue plunged 75%.

SI stock sank 23% to its lowest since December 2020.

Tesla still owns some Bitcoin, while Elon Musk has held Dogecoin for a while.


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ETFs

Among the best ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.3%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) gained 0.1%. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.3%, with MSFT stock a major component. VanEck Vectors Semiconductor ETF ( SMH ) popped 2.2%.

The SPDR S&P Metals & Mining ETF ( XME ) rose 1.9%. The Energy Select SPDR ETF ( XLE ) rose 0.1%. The Health Care Select Sector SPDR Fund ( XLV ) climbed 0.5%.

Reflecting more speculative storied stocks, the ARK Innovation ETF ( ARKK ) slipped 0.4% and the ARK Genomics ETF ( ARKG ) rose 1.4%. Tesla stock remains a top holding in Arc Invest’s ETFs.


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Market Rally Analysis

The stock market rally was heavily damaged last Thursday due to hawkish comments by Fed Chairman Jerome Powell. But even with bitcoin’s problems over the past three sessions, it’s back.

Last week’s high was cleared after the Dow Jones reclaimed its 200-day line on Monday.

The S&P 500 rose slightly above its 50-day line, although it is still below its Nov. 1 short-term high.

The Nasdaq hit resistance at its 21-day moving average, weighed down by Tesla and technical issues. It is still below its 50-day and away from its 200-day lines.

But the Diexion Nasdaq-100 Equal Weighted ETF ( QQQE ) rose more than 1% to edge above its 50-day line.

Falling Treasury yields helped lift stocks on Tuesday, while the greenback has been a key driver over the past three sessions.

Midterm election results may drive market moves, but Thursday’s CPI inflation report could be key. The CPI reading may raise hopes for a slower Fed rate hike and Low peak rate. But yet another hot inflation figure could trigger a heavy selloff in stocks and bonds.

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Leading stocks

There weren’t many new shopping opportunities on Tuesday.

Global Foundry (GFS) bullish above a trend line and handle very low after earnings.

Albemarle (ALB) cleared the initial entry, but soon ran to its official buy point, closing just below that key level. However, ALB stock is above its 50-day line after a big move from the Nov. 3 intraday low.

Crocs (CROX) briefly retook a buy point while United Health (UNH) closed in a buy range.

Many LNG stocks are near the buy point.

Technical weakness is still a concern. Chip stocks are rebounding, with the SMH ETF confidently above the 50-day line. Like megacap technologies apple ( AAPL ) is trying to bounce back, but after a big sell-off. The same goes for cloud software.


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what to do now

The stock market rally is showing resilience after last week’s sharp losses, with the Dow Jones and S&P 500 regaining key levels. With the CPI inflation report looming, investors still want to be cautious. Also, there are many stocks that are not currently operational, although many are setting up.

Investors should be prepared to take action by getting involved and building your watchlists. Growth stocks are still generally out of favor, so make sure you’re casting a wide net to find stocks and sectors that are emerging leaders.

Be sure to be aware of earnings, which remain active. Some stocks have been big earnings winners, while others rebound mightily after an initial tumble. But there have also been some high-profile sell-offs, as Disney and Lucid stocks showed overnight.

Read the big picture every day to stay in sync with market direction and key stocks and sectors.

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

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