Dow Jones futures rose on Thursday morning, along with S&P 500 futures and especially Nasdaq futures, focusing on Tesla’s profits. The stock market rally was split on Wednesday, with the Dow Jones breaking above key levels as the Nasdaq reached marked resistance after shares of FANG Netflix and Facebook fell.
x
Netflix (NFLX) crashed 35% on Wednesday, weighing on the Nasdaq. The surprise drop in Netflix subscribers and the weak outlook shook the streaming sector, from Disney (DIS) to Roku (ROKU). Meanwhile, a negative note from Cleveland Research on the slowdown in the growth of Meta Platforms (FB), a parent of Facebook, hit FB shares with a loss of 7.8%, making online gaming in general difficult.
Tesla (TSLA) topped profits after closing. Alcoa (AA), CSX (CSX), Steel Dynamics (STLD) and United Airlines (UAL) also reported.
Nucor (NUE), Union Pacific (UNP) and American Airlines (AAL) reported early Thursday.
Tesla shares jumped overnight as they operate on a cupped base. CSX shares have been rebounding after the turbulent last few weeks. UAL shares jumped on the upside, contributing to the recovery of the tourism sector.
Will CEO Elon Musk say something about his offer on Twitter (TWTR)? Shares of TWTR rose 1.2% to 46.72 on Wednesday, dispelling concerns about Facebook ads. Musk amassed a 9.1% stake in Twitter and offered to pay $ 54.20 per share for the rest. But he has not made an official offer and is apparently looking for partners to help fund the deal. It seems that Twitter is not interested in taking over Musk, at least at this price.
Tesla shares are on IBD Leaderboard and IBD 50.
Dow Jones futures today
Dow Jones futures rose 0.7% to fair value. S&P 500 futures rose 0.8%. Nasdaq 100 futures rose 1.15%. Shares of Tesla and UAL increase Nasdaq futures.
The yield on 10-year bonds increased by 3 basis points to 2.87%.
Crude oil futures rose slightly.
Remember that the action at night in Dow futures and elsewhere does not necessarily turn into actual trading in the next regular session of the stock market.
Join the IBD experts as they analyze the actions that can be taken in the stock market rally on IBD Live
Stock market rally
The stock market rally showed strong performance among blue chips and weakness among technology.
The Dow Jones Industrial Average rose 0.7% in stock trading on Wednesday. The S&P 500 lost less than 0.1%, with NFLX shares easily performing the worst. The Nasdaq index sank 1.2%. Russell 2000 with a small capitalization rose 0.4%.
US crude oil prices rose 0.1% to $ 102.19 a barrel.
Yields on 10-year government bonds fell 7 basis points to 2.84% after rising to 2.98% in trading on Tuesday night. The reference yield is still up for the week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) jumped 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) jumped 1%. The iShares Expanded Tech-Software Sector ETF (IGV) ETF fell 1.5%. VanEck Vectors Semiconductor ETF (SMH) fell 0.2%.
Reflecting the more speculative stock history, the ARK Innovation ETF (ARKK) fell 5.9% and the ARK Genomics ETF (ARKG) withdrew 2.1%. Tesla shares are the No. 1 holding in ARK Invest’s ETFs.
The SPDR S&P Metals & Mining ETF (XME) fell 0.1%, with Alcoa shares being a key component. The Global X US Infrastructure Development ETF (PAVE) rose 0.8%. The US Global Jets ETF (JETS) rose 0.3%. The SPDR S&P Homebuilders ETF (XHB) rose 1.1%. Energy Select SPDR ETF (XLE) advanced by 0.4% and Financial Select SPDR ETF (XLF) by 0.7%. The Health Care Fund for a selected sector SPDR (XLV) increased by 1.3%.
Five best Chinese stocks to watch now
Tesla’s profit
Tesla’s earnings rose 246 percent to $ 3.22 a share, with revenue rising 81 percent to $ 18.76 billion. Both were well above the outlook, with growth accelerating for the second consecutive quarter. Revenue from regulatory loans jumped to a new record $ 679 million, up 31 percent from a year earlier and more than double the $ 314 million in the fourth quarter.
Tesla’s profit publication does not offer new guidelines for deliveries in 2022 or more hints at Cybertruck’s schedule. Elon Musk, at the Tesla Austin “Cyber Rodeo” earlier this month, reiterated that he hopes production will begin sometime next year.
Q2 will suffer a significant blow due to Tesla’s prolonged shutdown in Shanghai due to the blocking of Covid in the city. Tesla simply restarts production with some of the staff in a “closed cycle”, which means that they live on the spot. The return to full production will take weeks and will depend on how suppliers and logistics can work.
Tesla is running on 4680 batteries, but is not a breakthrough signal for mass production. This mass production is necessary to save costs and can be key to making Cybertruck, Semi and Roadster viable.
Musk said he was “aiming” to do special robots by 2024 without a steering wheel or pedals. He also continues to advertise a future Tesla bot called Optimus, although experts say general-purpose humanoid robots are likely to run for decades.
Tesla shares
Tesla shares jumped more than 7% in pre-market trading. The shares fell 5% on Wednesday to 977.20, continuing to trade around the level of 1000. According to the analysis of MarketSmith, the shares of TSLA have 1,152.97 cups with a handle, but the base is scattered.
The longer handle will allow the moving averages to catch up. Shares of Tesla closed 4.8% above its 50-day line on Wednesday. On April 5, the shares were 19.9% above this key level.
Alcoa’s profits
Alcoa’s profit exceeded views, but revenue was missed.
Shares of AA fell 6%, signaling a decline below the 50-day line. Shares of Alcoa rose 0.4% to 86.93 on Wednesday after gaining support for its 50-day period. The stock tested the 50-day / 10-week line several times after breaking in December, so a new rebound would be a riskier place to buy. AA shares are working on consolidation.
The line of relative strength of Alcoa shares is close to peaks.
STLD profits
Steel Dynamics’ profits exceeded forecasts.
STLD shares fell overnight. Shares fell 0.5% to 91.49 from the highs.
Shares of NUE fell 1.5% on Wednesday.
CSX Profits
CSX’s profits were better than expected, as rising prices increased unit revenues, offsetting a 2% drop in volumes.
Shares of CSX rose 2% on long-term action. Shares rose 1 cent to 35.30 on Wednesday. Shares of CSX are working on a buy point of 38.73 on a flat basis with some wild action up and down over the past few weeks.
Shares of LPG rose 0.6% on Wednesday.
Profits of United Airlines
United Airlines reported a slightly larger loss than expected as revenue came to light. But United expect to return to profitability in the second quarter.
UAL shares jumped more than 7% overnight. This is after closing by 1.2%. Shares rose along with shares of airlines and travelers in general over the past few sessions. Last Wednesday, Delta Air Lines (DAL) surpassed the number of views for the first quarter and said that customers are not worried about the big increase in tariffs so far.
Shares of AAL also rose after rising 0.6% on Wednesday.
Market rally analysis
The stock market rally was clearly divided on Wednesday. The Dow Jones moved above its 200-day line, approaching its peak in late March. The S&P 500 hit resistance for its 200 days. The composite Nasdaq hit resistance on its 200-day line and turned lower.
Russell 2000, meanwhile, moved above its 50-day line after closing just below that key level on Tuesday.
REITs, travel and a growing number of medical stocks were leading on Wednesday. Industries and companies related to infrastructure had a strong session.
Commodity names and defense companies held up well. A number of leading energy stocks are being consolidated, with several already having suitable bases after previous launches.
But growth stocks, after rebounding on Tuesday, were hampered again, especially speculative ARK-style growth. Some chip names have bounced off ASML (ASML) results, but most are quite out of position.
The collapse of Netflix and growing concerns about Facebook’s growth are bad news for many large Internet companies and do not bode well for discretionary spending in general.
Market Time with IBD’s ETF Marketing Strategy
What should we do now
The stock market rally is not very easy to deal with, except in the areas of the market that work. It is good to see that leadership is expanding to include REITs, travel and more medical services. However, much of the market is in poor shape.
Exposure should remain modest and focused on strong sectors. Investors should consider taking at least partial profits from the winners quickly to avoid two-way moves.
As the earnings season heats up and another big Fed meeting is set for early May, caution and profitability may be even more important in the next few weeks.
Read the Big Picture every day to stay in line with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MAY ALSO LIKE:
Want to make quick profits and avoid big losses? Try SwingTrader
The best growth stocks to buy and watch
IBD Digital: Unlock first-class IBD stocks, instruments and analysis today
Tesla vs. BYD: Which thriving EV giant is better to buy?
Add Comment