Dow Jones Futures Await Fed Rate Hike, But This Is What Matters; Tesla is flirting with points of purchase

Dow Jones futures edged higher overnight, along with S&P 500 futures and Nasdaq futures, focused on the Fed meeting announcement. Major indices retreated on Tuesday as the Federal Reserve began its two-day policy meeting.




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Despite weaker-than-expected signs, Tesla stock briefly displayed an aggressive buy signal. Tesla (D.S.L.A) is required in China. It comes in a big middle Ford Motor (F) delivery costs, as well as warning of unfinished vehicles. Ford shares fell 12% General Motors (GM) fell 5.6% despite the EV supply deal Hertz (HTZ)

Except for Tesla, chipmakers In semiconductor (Ann) and Imp (PI) show strength together Neurocrine Biosciences (NBIX) and lithium giant SQM (SQM)

Apple (AAPL) rose for the second consecutive session. Apple stock is below key levels. Meanwhile, fellow megacap tex stocks Microsoft (MSFT) and Google Parents letters (Google) are at 52-week lows.

NBIX stock is in motion IBD Leaderboard. TSLA shares and On Semiconductor, also known as Onsemi IBD 50. On stock available IBD Big Cap 20. Impinch Tuesday IBD stock of the day.

A video embedded in this article discusses Tuesday’s market action and analyzes Neurocrine Bioscience, Wolfspeed (Wolf) and the PI share.

Ooty crowd

Policymakers seem locked in Central bank rate hike for the third time 75 basis points, the announcement will be made on Wednesday at 2 PM ET. Markets see little chance of a big full-point rise.

What matters is what the central bank sees now. Quarterly projections indicate where the central bank sees the fed funds rate under what economic conditions at the end of 2023. Federal Reserve Chairman Jerome Powell made clear in his August 26 Jackson Hole speech that the Fed is willing to risk recession to bring inflation under control.

Powell will speak at 2:30 pm ET, possibly giving some hints about Fed rate hikes. Currently, markets are betting on a fourth 75-basis-point move in November, followed by 50 basis points in December. It will raise the year-end fed funds rate to 4.25%-4.5% from the current 2.25%-2.5%. Ahead of the August consumer price index on September 14, markets had expected 3.75%-4% by the end of 2022.

Dow Jones Futures Today

Dow Jones futures rose 0.2% versus fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.3%.

Remember that it is an overnight operation Dow futures The next routine elsewhere doesn’t necessarily translate into actual trading stock market session.


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Stock Market Tuesday

Stock markets fell on Tuesday’s announcement of the central bank meeting. An afternoon hopping close and disappearing.

The Dow Jones industrial average fell 1% on Tuesday Stock market trading. The S&P 500 index lost 1.1%. The Nasdaq composite fell 0.95%. The small-cap Russell 2000 lost 1.4%.

Apple shares, a composite of the Dow Jones, S&P 500 and Nasdaq, rose 1.6% to 156.90. AAPL stock hit its 21-day resistance and is below its 50-day and 200-day lines after last week’s big pullback. But a decisive move above the 50-day and 200-day lines could provide a fresh initial entry.

October US crude fell 1.5% to $84.45 a barrel. November crude oil futures, now almost a monthly contract, fell 1.7% to $83.94.

The 10-year Treasury yield rose 8 basis points to 3.57%, another 11-year high.

ETFs

in the middle Best ETFsInnovator IBD 50 ETF (FFTYretreated 1.3%. iShares Expanded Technology-Software Sector ETF (IGVfell 1.5%. VanEck Vectors Semiconductor ETF (SMHfell 1.4%.

SPDR S&P Metals & Mining ETF (XMEfell 2.7%. Energy Select SPDR ETF (XLE) fell 0.7% and fund pick SPDR ETF (XLF) 1.5% Health Care Select Sector SPDR Fund (XLVGave up to 1.2%.

Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) fell 2.5% and the ARK Genomics ETF (ARKG) retreated 1.6%. TSLA shares are a key player across ArcInvest’s ETFs.


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PI share

Shares of Impinj fell 2.5% to 89.66 on Tuesday. Shares of the tracking chips maker are finding support at the 21-day and 10-week lines. PI stock is working on a new consolidation, which should be the perfect floor with a 99.10 buy point at Friday’s close. Investors can use 93.46, an early entry that is just above the short-term high and still close to the 10-week line.

The Relative strength line This is a positive sign for PI stock as it outperforms the S&P 500 index.

In stock

The semiconductor stock fell 2.4% to 68.48 after rising 1.8% on Monday. Shares of the EV-focused chipmaker closed below their 21-day and 10-week lines.

RS line for Onesemi stock is maximum.

After a breakout from a long base in late August, the stock may have a new, shallow base next weekend. Investors can use 73.03 as an aggressive entry, above the top of the previous consolidation.

NBIX stock

Neurocrine stock was down 0.7% at 107.09, again finding support at its 21-day moving average. NBIX share a Flat base With a buy point of 109.36, step MarketSmith analysis. The flat base is just above a front integration, which is a Basic-basic formulation. Investors can use a move above Monday’s high of 108.71 as a slightly lower entry. The RS line for NBIX stock is at a new high.

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Share of SQM

SQM stock fell 2.4% to 104.66 from its 21-day line. Shares of Chilean lithium and fertilizer companies tried to pull out of the mess Handle with cup Base earlier this month, but never closed above 113.80 Point to buy. The good news is that the 50-day line is starting to climb.

RS tax for SQM share is maximum.

Tesla stock

Tesla stock rose to 313.33, extending some gains and moving above a more aggressive 309.22 buy point. But the stock ended 0.1% lower at 308.73. TSLA stock is nearing a 314.74 buy point from a short consolidation, within a much larger consolidation that could be the perfect floor this weekend.

The RS line has been rising recently from its peak in early April.

Buying TSLA stock, or any stock at all, would be extremely aggressive in the current market environment.

CEO Elon Musk tweeted Tuesday about Optimus, the humanoid Tesla bot he may show off at the company’s AI Day on September 30. Most experts say a useful general-purpose humanoid robot is decades away. He also pointed to the improved Smart Summon or Autopark feature, which has had issues over the years.

However, Tesla is missing China’s sales expectations. Local sales should hit a record in September as Shanghai capacity expands again. But Tesla auto insurance registration Dropped in the latest week, a time when they usually make strong strides.

Tesla China’s wait times have fallen sharply in the past few weeks, as the EV giant sought a big insurance subsidy to fuel quarter-end sales. This may foreshadow actual price cuts later this year.


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Stock market analysis

Well, it’s a stock market correction. The S&P 500 and Dow Jones edged past Friday’s lows on Tuesday before paring losses somewhat.

The good news for Tuesday was that stocks did not rally on major Fed-related news. This is in contrast to the August 26 Jackson Hole Federal Chairman Powell’s speech or the September 14 CPI inflation report.

It’s no coincidence that the stock market struggles with Treasury yields screaming higher.

The summer bull case revolved around the central bank. First, the Fed was expected to reduce rate hikes soon, and then begin cutting rates in 2023. Later, there was still hope that the central bank would cut rate hikes to a halt by the end of the year.

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But now the Fed is on track to raise rates aggressively through the end of the year, with 2023 still possible. That means more pain to the economy.

The current low growth, high inflation environment is not good for companies. Ford, FedEx (FDX) and General Electric (GE) were among those warnings last week.

Ford stock’s sell-off after FDX and GE last week showed investors weren’t pricing in significant earnings. Expect more alerts in the next few weeks.

Given the weakness of the past several weeks, the market is likely to bounce Wednesday after the central bank meeting and Fed Chair Powell’s speech. Remember that the market often reverses in the two-day reaction to the Fed meeting.

Until there is clarity on when the central bank will begin to slow and stop its tightening, it will be difficult for markets to see a meaningful improvement. It’s not hard to see the major indices testing or breaking their June lows.


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What to do now

The market correction is back in effect, the Fed is set to raise rates sharply again, and there is no end in sight. Firms are issuing major warnings as severe economic conditions could worsen.

Investors should have little or no exposure and not make new purchases. Wait for a confirmed uptrend where major indices recover their 50-day moving averages. Even in that scenario, other technical hurdles, central bank and economic backdrop, should keep investors cautious.

For now, investors should work on their watch lists, focusing on relative strengths like NBIX stock, On Semi and Tesla. Remember, today’s relative winners may break if the correction intensifies.

According to Big picture Each day should be in sync with the direction of the market and the leading stocks and sectors.

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

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