Dow futures tilted higher overnight, along with S&P 500 futures and Nasdaq futures. Attention turns to the CPI inflation report ahead of Wednesday’s opening.
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The stock market rally was mixed on Tuesday, with indexes fading into the close.
Concerns about the growth of cloud computing have affected the giants Amazon.com (AZMN), Microsoft (MSFT) and the parent of Google the alphabet (Google). This has also plagued the names of cloud software such as snowflake (snow) And datadog (DDOG).
But medical products and services appeared to be strong, with Intuitive surgery (ISRG), alignment technique (ALGN) And Zimmer Biomet (ZBH) all blinking buy signals, with Shockwave Medical (SWAV) make a big move.
House builder Dr. Horton (DHI), Meritage Homes (MTH), Linar (flexible), Tree Point Homes (TPH), And Bolt Group (PHM) was doable, with a building materials company FirstSource builders (BLDR) Exit.
Skechers (SKX) also, as stocks of many shoes soared.
DR Horton, Skechers, Builders FirstSource, and SWAV stocks moved in well above average volume.
MTH stock is running leaderboard. DHI stock is on SwingTrader. MSFT stock is at IBD Long-Term Leaders. Meritage, Tri Pointe Homes and PHM stock is on the defect 50.
The video embedded in this article reviewed market action and analyzed BLDR, DR Horton and Shockwave Medical stocks.
Big bank reserves
The banks that made the largest tranches of deposits worth $30 billion to The first republic (FRCBloomberg said Tuesday evening that) will set aside about $100 million each for loss reserves. c. B. Morgan Chase (JPM), Wells Fargo (WFC), Citigroup (c) And American bank (Buck) each put up $5 billion. JPMorgan, Wells and Citi report on Friday, and Bank of America is due next week.
CPI inflation report
The Labor Department will release the Consumer Price Index inflation report at 8:30 a.m. ET. Economists expect the CPI to rise 0.3% in March, with annual CPI inflation falling to 5.2% from 6% in February. But the core CPI, which excludes food and energy, rose 0.4% from February. This should push the core CPI inflation rate to 5.6%, up slightly from 5.5% in February.
Annual CPI inflation rates are falling in part because prices were so high in early 2022. But those annual comparisons will soften later in the year, making it harder to bring inflation down. Meanwhile, economic data has finally softened, including jobs, while banking problems are starting to weigh on lending.
Investors see a strong chance the Fed will raise interest rates again in early May, but are betting that this will be the last move.
Dow jones futures today
Dow futures rose 0.1% against fair value. S&P 500 and Nasdaq 100 futures rose 0.1%.
The CPI inflation report is sure to move Dow futures, Treasury yields, and more.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live
Stock market rise
The stock market rally opened weak, pulled back, and then faded again of late. However, the indices closed mixed as they were for most of the session.
The Dow Jones Industrial Average rose 0.3% in stock market trading Tuesday. The S&P 500 was flat. The Nasdaq Composite fell 0.4%. Small-cap Russell 2000 rebounded 0.8%.
US crude oil prices rose 2.2% to $81.53 a barrel, the highest close since Jan. 23. Copper futures rose nearly 1%.
The 10-year Treasury yield rose 2 basis points, to 3.43%. The 2-year Treasury yield increased by 5 basis points, to 4.06%. The 3-month Treasury rate decreased slightly, but came to 5.03%. This sharp reversal of the 3-month to 10-year Treasury yield curve points to the Fed’s unfinished battle of inflation and rising recession risks.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) rose 0.7%. iShares Expanded Technology and Software ETF (IGV) was down 0.5%, with Microsoft IGV stock being the main lead. VanEck Vectors Semiconductor Corporation (SMH) also decreased by 0.5%.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(up 0.6% and the ARK Genomics ETF)ARKG) 1.2%.
SPDR S&P Metals & Mining ETFs (XME(Boosting 1.5% and the US X Global Infrastructure Development Fund (ETF) )cradle) 0.8%. US Global Gates Foundation ETF (Planes) climbed 1.5%. SPDR S&P Homebuilders ETF (XHB) increased by 2%. Energy Defined Fund SPDR ETF (xle(jumping nearly 1% and the SPDR Healthcare Sector Choice Fund)XLV) increased by 0.3%.
SPDR Financial Selection Fund (XLF) an advance of 0.9%. SPDR S&P Regional Banking ETF (KRE) increased by 0.3%.
Top five Chinese stocks to watch now
Cloud computing concerns
Cloud computing growth is likely to slow further, analysts from UBS and Jefferies reported, with negative analyst comments about Microsoft Azure, Google Cloud and Amazon Web Services.
MSFT stock fell 2.3% to 282.83, but it’s still in a range of 276.86 to buy a flat base.
GOOGL, the least exposed to cloud computing of the three, fell 1% to 105.35. That’s just below the 106.69-point Buy Cup with Handle faded on Thursday.
AMZN stock fell 2.2%, to 99.92. Amazon is working on a bottom base, but it is forming below the 200 day line.
Meanwhile, some cloud-related software and network names have fallen behind. SNOW stock was the notable loser, down 5.8%.
Stock buy indicators flashing in volume
DHI rose 3.7% to 99.77, back above a 99.08 cup handle buy point after flashing bullish signals earlier in the session, according to MarketSmith analysis.
BLDR rose 4.2% to 92.37, clearing 90.31 buy points from a flat base next to the 14-month consolidation top. Last week, Builders FirstSource fell amid a sell-off in the construction and industrial space, but held support at the 21-day moving average. While it is still in a buy territory, it has crossed the 50 day line by more than 10% now. On the upside, the line of relative strength for BLDR stock has reached a new high.
SWAV rose 10.6% to 251.05, crossing the 200-day line for the first time since December. Investors could have used this move as a solid income stream. However, Shockwave stock is now trading around the bottom of a base from last fall that ended in a failed breakout. Investors may want to wait for SWAV stock to rise, and then form a handle.
Shockwave soared as Medicare’s new rule could resolve copayments for its systems.
SKX rose 3.4% to 48.70, removing 47.80 cups from a buy handle point. Volume was slightly above average, although it didn’t turn positive until late in the session. Skechers stock jumped 2% Monday on the day of the setup.
Market rally analysis
The stock market rally looked poised to close near the session highs again, but fizzled out in the last hour of trading. But the main indices still looked healthy, while the blue-chips showed strength.
The Nasdaq Composite lagged, but held above 12,000, and paused below key resistance and support.
The S&P 500 has continued to trade tightly over the past several days. The Dow Jones index reached its best level since February 17th. The Russell 2000 is back above the 21-day line.
While some tech giants like Microsoft and Amazon have weighed in on the indices, the Invesco S&P 500 Equal Weight ETF (RSP) rose by 0.65%, hitting a one-month high, to close at the 50-day line. First Trust NASDAQ-100 Equal-Weighted Index (QQEW) closed fractionally higher versus the 0.6% decline in the Nasdaq 100.
The bulls led the losers on Tuesday, especially in the New York Stock Exchange. Even in the morning, when the S&P 500 and Nasdaq were near session lows, the winners were outpacing the losers.
In addition to homebuilders, medical products, and footwear, a variety of groups are showing strength, including gold and copper miners, drug makers, restaurants, several software plays, and the broad chip sector.
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What are you doing now
The stock market rally has stabilized after some sharp selling in industrial and growth stocks last week. A large number of blue-chip stocks are again flashing buy signals as market breadth improves.
Investors can gradually add exposure again. Do not buy extended and do not concentrate too much. Sectoral rotation could still take a toll in some areas as others fall into place. The overall market rally could take off to new highs with a good day or two – or break key levels with a sell-off
So stay connected and be smart. Discover potential leaders by working on extensive watchlists while researching fewer stocks on the cusp of overbought areas.
In addition to the CPI inflation report, earnings season is about to begin.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
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