Overnight Dow Jones futures slipped slightly, along with S&P 500 futures and Nasdaq futures, amid weak revenue and guidance from Cisco Systems. The stock market rally was sold off hard on Wednesday, as big Goal (TGT) The loss of profits raised major concerns about retailers, related sectors and the broader economy amid severe inflation and weak demand.
Wednesday’s sharp selling comes on the heels of the launch of the major indicators Follow-up day To confirm the new stock market rally, bearish signals flash.
after closing, Cisco Systems (CSCO) And Sociedad Química y Minera de Chile (Square meters), or SQM, reported earnings. Cisco’s earnings surpassed last year’s third-quarter financial views, but revenue was lost and so did the network giant Guided less for current Q4. CSCO stock is down 13% overnight. Arista Networks (Network) and other related stocks fell strongly.
SQM earnings are still on hold after hours of playing fertilizer and lithium. SQM stock is up 0.4% at 90.21 in Wednesday’s regular session after hitting 93.14 on the day, briefly surpassing 90.97. buy point.
Target Profits Bad News for Retail
Target profits fell 41%, much more than expected. The retailer blamed shipping costs as well as consumers shifting away from televisions and other discretionary items. Target sees margin pressures throughout the current fiscal year. It came a day later Walmart (WMT) missed EPS and directed decline, indicating higher freight, freight and labor costs. At the time, investors might have thought or hoped that Walmart’s problems were specific to the company, but Target’s findings pointed to a much broader problem.
The target stock is down 25% to 161.61. Wal-Mart shares fell 6.8 percent, after falling 11.4 percent on Tuesday. Both are at their lowest level since 2020.
If Walmart and Target are struggling in the current economic climate, it can’t be good for discounts, other retailers and in general.
dollar tree (DLTR) is down 14.4% after falling 3.2% on Tuesday. DLTR stock held up well, but fell below the 50-day streak on Tuesday and crashed to the 200-day streak. Costco Wholesale (recovery) lost more than 12%, after already fully faltering the breakout and falling below the major moving averages in recent weeks. Dollar Tree and COST report on stocks next week.
best buy (BBY), which was published early Thursday, fell 10.5% to a two-year low.
Trucking companies, Tesla, Apple Stock Hit
GB Hunt Transportation Services (JBHT) sold 9%, down from near the 10-week streak. With consumer demand weak, trucking companies may see weak demand, struggling to pass on high diesel prices.
Apple shares fell 5.6% to 140.82, their lowest closing level in six months, as a targeted warning about discretionary spending for consumers raised concerns about the tech giant Dow Jones. In the past several weeks, the iPhone manufacturer has held a contract with Foxconn and Taiwan Semiconductor (TSM), making chips for apple (AAPL) and many others, warned of weak demand for smartphones. AAPL stock is on track for its eighth consecutive weekly loss.
Tesla shares plunged 6.8 percent to 709.81, their lowest close since August. While poor consumer appreciation could theoretically hurt demand for expensive electric Tesla cars, total vehicle production is so low that supply is still the dominant factor. Tesla (TSLA) is under pressure alongside other high-value growth names, along with issues of Shanghai plant production and CEO Elon Musk’s persistence. Twitter (TWTR) epic takeover. Twitter’s stock fell 3.8% to 36.85, its lowest level in two months and even below Musk’s acquisition price of $54.20.
Also, the S&P 500 ESG index booted Tesla, largely on issues of company culture, sparking more angry tweets from Musk.
Meanwhile, the US National Highway Traffic Safety Administration is investigating a Tesla Model S crash earlier this month that killed, possibly on autopilot. NHTSA is investigating dozens of accidents related to autopilot.
Dow jones futures contracts today
Dow Jones futures are down 0.3% against fair value. S&P 500 futures were down 0.4%. Nasdaq 100 futures were down 0.6%. Cisco stock is a component of the Dow Jones, S&P 500, and Nasdaq. Many other networking and hardware stocks also fell.
US crude oil prices rose.
stock market rise
The stock market rally opened sharply lower and continued lower on Wednesday.
The Dow Jones Industrial Average fell 3.6% on Wednesday stock market trading. The S&P 500 fell 4%. The Nasdaq Composite Index fell 4.7%. Small-size company Russell 2000 shares fell 3.5%.
US crude oil prices slipped from a modest gain to a 2.5% drop to $109.59 a barrel. Gasoline futures are down more than 5%.
The 10-year Treasury yield fell 8 basis points to 2.89%.
between the Best ETFsThe Innovator IBD 50 ETF (fifty) slipped 3.8%, while the creator of the IBD Breakout Opportunities ETF (fit) lost 3.9%. iShares Expanded Technology and Software Fund (ETF)IGV4% surrendered. VanEck Vectors Semiconductor Corporation (SMH) decreased by 4.8%.
SPDR S&P Metals & Mining ETF (XME) fell by 4.15% and the Global Infrastructure Development Fund (ETF) in the United States (cradle) down 3.6%. US Global Gates Foundation (ETF)Planes) down 3.4%. SPDR S&P Homebuilders ETF (XHB) decreased 5.5%. SPDR Specific Energy Fund (SPDR ETF)XLE) and the Financial Select SPDR ETF (XLF) lost 2.75%. SPDR Healthcare Sector Selection Fund (XLV) decreased 2.6%
The SPDR S&P Retail ETF, which includes target stocks and Walmart as major components, fell 8.3% to its lowest level since December 2020.
Market Rise Analysis
When you get a brand new car, you don’t expect problems while driving away from the car. But if you do, you may have a lemon. On Tuesday, the main indicators organized a Follow-up daywhich confirms the rise of the new stock market.
But on Wednesday, the major indexes slipped, giving up all of the strong gains made on Tuesday and much more.
Weaker consumer and higher corporate costs are a bleak mix for retailers and discretionary makers. With consumers spending more than two-thirds of the US economy, the risks of a hard economic downturn increase as the Federal Reserve tries to bring down inflation. Violent increases in interest rates by the Federal Reserve will cause serious pain. But the alternative, which is to let inflation remain high, clearly affects demand as well.
Regardless of the reasons for the heavy selling, the technical action is clear. not all Follow-up day It works, and Wednesday’s move was a bearish signal.
Major indices closed below FTD lows. Eric Kroll, co-author of The Lifecycle Trade, says his research shows that when leading indicators do this, there is a 90% chance that the market rally will eventually fail.
The odds may be worse in this case. The Dow Jones and S&P 500 indices hit new 52-week closing lows on Wednesday, with the Nasdaq yet to do so.
However, the market rally is still in place until major indexes cut off their beginning high, in this case their intraday lows on May 12th. The Dow Jones in particular is close to a breakout lower. Another move down for the S&P 500 will surely push the benchmark index into a bear market, joining the Nasdaq.
Look at the weekly chart of the major indicators, and it’s hard to see the rally. The Dow, S&P 500 and Nasdaq are on track to extend their long weekly losing streaks.
What are you doing now
Wednesday’s heavy selling is why it’s a good idea to slowly enter a newly confirmed rally in the stock market. This was especially true for the current market rally, with major indices below the major moving averages and a few stocks in the center.
Investors who bought stocks or FTD ETFs on Wednesday should either expand or exit.
Keep working on your watchlists. Focus on stocks with strong relative strength. But a strong RS line is not a green light to buy a stock, especially in a weak market.
The sell-off in DLTR stock on Wednesday — and Apple over the course of the few weeks — shows how well stocks can hold up, if not. So wait for the stocks to flash a buy signal in a strong market, and be ready to exit.
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