Is that X?
On Tuesday, the major indexes all confirmed a new market rally. The rally ran into trouble on Wednesday. The rally that began after the May 12 lows of the S&P 500 and the Nasdaq ended after just a few days. Friday’s losses were erased by a final-hour rebound, but the major indexes were still down for the week.
The broad, wide sell-off was triggered by retailers such as Target. Apple, Alphabet, and especiallyTesla were all major loser.
Even though BYD had a good week, its stock was hit hard. BYD’s Seal EV is a new rival to the Model 3. China EV startup Xpeng is expected to report early Monday.
With inflation squeezing consumers and businesses and the Fed rapidly raising rates, the economic outlook looks difficult at best. The stock market is adjusting to a new reality where a hard landing is a possibility.
Individual investors have to adjust to that reality as well.
Eli Lilly, ZIM Integrated Shipping and World Wrestling Entertainment are all worth watching. LLY stock is near a buy point with its relative strength lines close to highs.
The stock of ZIM is on the IBD 50. CVX is on the Big Cap 20. This week’s New America feature focuses on the stock of the World Wrestling Entertainment. The weekly action in detail is discussed in the video embedded in this article.
There is a futures market today
The futures are open at 6. S&P 500 futures will be on Sunday.
According to the Wall Street Journal, Apple wants to increase production outside of China. Beijing’s “zero- Covid” policies are one of the reasons. Apple is looking at ramping up production in India and Vietnam.
It’s important to remember that overnight action in futures doesn’t translate into actual trading in the stock market.
The stock market rally will be analyzed on IBD Live.
The stock market is listed on the stock exchange.
On Tuesday, the stock market showed some promise, but ended up with another week of big losses.
The stock market fell in last week’s trading. The S&P 500 fell 3%. The index lost 3.8%. The small-cap Russell 2000 lost steam.
Walmart stock plummeted to the lowest point since 2020 on weak earnings and guidance. Ross Stores was down 21.9% on weak results. This coming week, Dollar Tree and Costco Wholesale will report.
The theme of rising costs and weaker demand spread to trucking firms and even food producers, which are traditionally a safe haven.
Apple stock fell for the eighth week in a row. The stock of the internet giant fell on the advertising concerns. The EV giant’s stock crashed due to several factors.
After tumbling 19 basis points in the prior week, the 10-year Treasury yield skidded 15 basis points to 2.78%). Concerns about economic growth are what led to the retreat in Treasury yields.
U.S. crude oil futures rose 2.5% last week.
They have an exchange rate for ETFs.
The Innovator IBD 50 Exchange Traded Fund (FFTY) gave up 1.6% last week, while the Innovator IBD Breakout Opportunities Exchange Traded Fund (BOUT) fell 5%. The IGV and SMH both fell.
Last week, the SPDR S&P Metals & Mining exchange traded fund was up 0.6%. The Global X U.S. Infrastructure Development fund retreated. The U.S. Global Jets Exchange Traded Fund rose 0.6%. The S&P Homebuilders Exchange traded down 3.6%. Chevron stock is a major component of the Energy Select SPDR. The Financial Select Exchange Traded Fund lost 1.8%. LLY stock is a notable holding in the Health Care Select Sector SPDR Fund. WMT stock and TGT stock were major holdings in the SPDR S&P RetailETF.
Reflecting more-speculative story stocks, the ARK Innovation Exchange Traded Fund (ARKK) retreated 2.5% last week while the ARK Genomics Exchange Traded Fund (ARKG) was up 0.6%. It is no longer the No. 1 position in ARKK, though it is still the No. 1 holding across Ark Invest’s ETFs. Ark Invest has some BYD stock.
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After briefly topping a 174.86 buy point on Monday, the stock pulled back and ended the week at 167.88. The stock is supported by its 21-day and 50-day lines.
After the FDA approved a “novel” diabetes drug that also could be an obese treatment, LLY stock jumped from around the 50-day line for an early entry in a flat base. On Thursday, shares fell back below their 50-day line, but rebounded on Friday. Eli Lilly stock rose 2.5% last week. LLY stock is one of the major drugmakers that has held up well during the bear market.
ZIM stock ended the week with a 1.65% gain to 64.70. The shares seem to be working on a handle in a cup base. ZIM Integrated reported a 190% increase in earnings as revenue more than doubled. The ZIM also announced a dividend.
After finding support just above the 200 day line in the prior week, the stock rose 4.6% to 60.91 last week. According to MarketSmith analysis, the shares are working on a flat base. The stock closed on a trendline, just above the 50-day line.
The stock of the company is listed on the OTC Bulletin Board.
Last week, the stock fell to the lowest level since late July. A break below the February 24 and May 12 levels was provided by Friday’s 6.4% loss. TSLA stock didn’t rebound from the lows like in other cases.
Heavy selling days have been common in the past four weeks.
The broad market sell-off is one of the reasons that TSLA stock is likely to be affected.
The wind is coming from the north
Since late March, Covid restrictions have weighed on production, so the company is still working on one shift. The Chinese government said Saturday that the factory has produced over twenty thousand vehicles since the end of the shutdown a month ago. The China Passenger Car Association data shows that in the month of May, it has made over 15,000 vehicles. Under normal conditions, the city of Shanghai can make 2,600 vehicles a day.
As China EV and battery giant BYD (BYDDF), little affected by Covid lockdowns, passesTesla in vehicle sales, it comes as a surprise. BYD began pre-orders for the Seal sedan, a Model 3 rival with longer range, faster acceleration, but $10,000 cheaper. BYD stock was up 10% last week to 33.33
“Elon Musk’s Crash Couse” was a New York Times documentary that looked at issues with Musk’s promises. As the NHTSA investigates another fatal crash, it’s part of a major probe into autopilot-related accidents.
TSLA stock sales and Musk’s ongoing distraction are negatives, as investors fear more. Business Insider reported that Musk had paid a settlement to an employee of his company.
What matters most to investors is how the stock reacts. There is a sell-off in the stock of the company. Anyone who bought a car from the company in the past year should not be around anymore. Longer-term investors have to decide when to take profits and when to hold them. There is no easy answer.
There is a debate between the electric car company, tesla, and the other electric car company, tHe other electric car company, tHe other electric car company, tHe other electric car company, tHe other electric car company How these two EV giants match up.
Analysis of the market.
The recent rally failed so quickly that the best thing to say about it is that it failed. The bear market rally in late March offered more temptation.
Major indexes staged follow-through days on Tuesday to confirm the new stock market rally. There were many reasons to be skeptical and few stocks to buy. Bill O’Neil wanted to make sure that he and other investors didn’t miss new rallies, even if they didn’t work out.
The sell-off was a major expectation breaker. When the major indexes close below the low of their follow-through days, they all fall below that level on Wednesday. The official end of the uptrend was close.
There has been a sell-off since April.
The S&P 500 was down more than 20% from its Jan. 4 peak for most of the session until a final rally off the lows.
The S&P 500 eked out a small gain on Friday, so that technically marks the start of a new market rally. A “pink rally” day is when the Nasdaq closes in the upper half of the daily range. If the major indexes don’t undercut Friday’s lows, the major indexes could stage FTDs later next week.
Inflation is smothering consumers and businesses alike, with growth and hiring already slowing as a result. The Fed is raising rates in order to cool inflation. It would be very difficult to bring down inflation while avoiding a recession. Powell and his colleagues may feel a modest economic slump is necessary to bring inflation under control.
There are few economic scenarios that look attractive in the coming months because of supply chain chaos from China and the Russia-Ukraine war.
At some point in the future, the stock market will price in the negative news and see a brighter future. It’s not today.
It is time to sell your stock.
What can we do now?
This is not a time to be clever. It’s a good time to be aware of your risk.
You can keep a minimal exposure if you have some energy stocks that have good gains. You might want to take partial or full profits. There are decisions to be made about big long-term winners, such as Apple orTesla stock.
There should be investors on the sidelines. It’s possible that ZIM, Eli Lilly, Chevron or WWE stock will cause buy signals in the near future, but any purchases would be very risky, and the upside could be limited.
It is better to wait for a better market to develop. That is more than a strong open or close, or even a big day.
When there is another rally, be quick to exit.
When inflation was a major threat, bear markets and corrections from the late 1960s to early 1980s.
And work on watchlists. Get ready to do some major changes if you haven’t updated them this week. Many stocks with strong lines have fallen. Look for new winners out there.
Stay in sync with the market direction and leading stocks and sectors by reading The Big Picture.
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