Futures: Fed Meeting, Big Earnings On Deck; What To Do Now
Dow Jones futures were lower ahead of Tuesday’s open after the Dow Jones Industrial Average fell 260 points Monday. The Federal Reserve’s policy meeting headlines the week, along with big earnings results from Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL) and Meta Platforms (META).
Fed Meeting, Big Earnings Results
The Fed’s two-day meeting will start Tuesday, and the central bank is widely expected to raise the target federal funds rate by 25 basis points, to a range of 4.5% to 4.75%. Investors place a 99% probability of that size hike, according to the CME’s FedWatch tool.
Late Monday, Apple supplier NXP Semiconductors (NXPI) declined 4.5% in extended trade after reporting its fourth-quarter earnings results.
Meta’s earnings are due out late Wednesday, while Alphabet, Amazon and Apple earnings are set for Thursday after the close.
More key earnings this week include Advanced Micro Devices (AMD), Exxon Mobil (XOM), Dow Jones member Merck (MRK) and Starbucks (SBUX). Automakers Ford (F) and General Motors (GM) are also due to report.
Stock Market Today
On Monday, the Dow Jones Industrial Average fell 0.8%, and the S&P 500 dropped 1.3%. The tech-heavy Nasdaq composite sold off 2%. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 2% and the SPDR S&P 500 (SPY) fell 1.2%.
IBD Leaderboard stock Impinj (PI), Etsy (ETSY) and Wingstop (WING) — as well as Dow Jones stocks Chevron (CVX) and JPMorgan Chase (JPM) — are among the top stocks to buy and watch, with the ongoing strength of the market rally.
Dow Jones Futures Today: Oil Prices, Treasury Yields
Ahead of Tuesday’s opening bell, Dow Jones futures moved down 0.3% vs. fair value, and S&P 500 futures lost 0.35%. Tech-heavy Nasdaq 100 futures were down 0.5% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
The 10-year U.S. Treasury yield ticked higher to 3.55% Monday, extending a win streak to three sessions. Last week, the 10-year yield barely ended a three-week losing skid.
Oil prices were down more than 2% as markets look toward this week’s OPEC meeting. West Texas Intermediate futures fell below $78 a barrel. Ministers from the Organization of Petroleum Exporting Countries and its allies, including Russia (OPEC+) will meet on Wednesday. OPEC is widely expected to maintain current oil production levels but may discuss possible policy tweaks.
What To Do In The Ongoing Stock Market Rally
Now is an important time to read IBD’s The Big Picture column with the stock market trend in a “confirmed uptrend” amid strong gains in recent sessions.
With more encouraging action last week, it makes sense for investors to increase exposure to 60% to 80%. But be ready to move quickly as things can rapidly change on the stock market, especially during this week’s news-driven market.
Dow Jones Stocks To Buy And Watch: Chevron, JPMorgan
Energy giant Chevron fell sharply for a second straight session, sliding 2.9% Monday. Shares broke below the 50-day average support level. Despite recent weakness, CVX stock is adding a handle to a cup base, lowering the entry from 189.78 to 187.91, according to IBD MarketSmith chart analysis.
Banking giant JPMorgan remains in buy range above a 138.76 flat-base buy point despite a 0.9% loss Monday. JPM stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.
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Top Stocks To Buy And Watch: Impinj, Etsy, Wingstop
IBD Leaderboard stock Impinj ended Monday below a 129.12 buy point in a cup base following its recent breakout move, as shares dropped 2.9% Monday. Look for a decisive retake of the buy point to signal another chance to buy shares.
Backstory: Impinj’s expertise lies in RF (radio frequency) semiconductors to identify, locate and authenticate items. While losing money in 2020, the company earned 25 cents per share in 2021. And annual earnings are expected to surge 284% to 96 cents per share this year.
Etsy is back below a 137.01 buy point in a cup with handle after Monday’s 2.25% drop. If the stock regains the entry, the 5% buy area goes up to 143.86.
Backstory: The company is a provider of an online e-commerce platform where creators of arts and crafts, vintage items and other unique goods go to sell their products. It has a unique business model that, in the last few years, has gone from a niche e-commerce marketplace to a top-of-mind shopping destination across numerous categories.
Wingstop is rapidly approaching a 170.97 buy point in a lopsided cup base. Keep an eye out for a potential handle to offer a lower entry.
Backstory: The Dallas-based restaurant chain has over 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Columbia, Panama, Singapore and the U.K. The company added a net 40 stores in the prior quarter. Earnings are due out Feb 22. EPS is expected to grow 71%, with a 40% jump in revenue to $101.1 million vs. the year-ago period.
Tesla stock dived 6.3% Monday, snapping a six-day win streak and giving up a part of last week’s 33% surge. Despite their strong rebound since Jan. 6, shares are still below the 200-day line. Tesla stock closed about 56% off its 52-week high.
Early Monday, Tesla stock received an upgrade at Berenberg from hold to buy. The new price target is 200, down from 255.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares stumbled 2% Monday, ending a two-day win streak. But they are still holding above their 50-day line following strong gains in recent sessions. The stock remains around 20% off its 52-week high. Apple will report its quarterly earnings on Thursday.
Microsoft stock slid 2.2% Monday, finishing just above its 50-day line, which it regained last week. Shares remain 23% off the 52-week high.
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