Tuesday’s market rally was confirmed by all major indexes. But that rally was halted by a strong sell-off on Wednesday. The Dow Jones undercut its May 12 lows on Thursday, with the S&P 500 and Nasdaq doing so on Friday, ending the rally. Despite a final-hour rebound, the major indices were still down sharply for the week.
A broad, wide sell-off was sparked by retailers such as Target (TGT) and Walmart (WMT). Apple (AAPL), Alphabet (GOOGL) and Tesla (TSLA) were also major losers.
Tesla stock was hit particularly hard, while top rival BYD (BYDDF) had a solid week. BYD launched preorders for its new Tesla Model 3 rival on Friday. China’s Xpeng (XPEV) reports early Monday.
As a result of high inflation and the Fed raising rates rapidly – along with global supply-chain challenges – the economic outlook looks bleak at best. The stock market is still adjusting to the new reality where a “hard landing” is a possibility.
Individual investors must also adjust to that hard reality.
Among the Dow Jones giants worth watching are Chevron (CVX), Eli Lilly (LLY), and World Wrestling Entertainment (WWE). These other names are near bought points and their relative strength lines are at or near highs.
Dow Jones Futures Today
Dow Jones futures rose 0.7% vs. fair value. S&P 500 futures advanced 0.9% and Nasdaq 100 futures climbed 1.15%.
The 10-year Treasury yield rose 3 basis points to 2.81%.
Broadcom (AVGO) is reportedly in talks to buy VMware (VMW) for virtualization software. Despite being a chipmaker, Broadcom has acquired some big software companies in the past few years. The company’s stock closed Friday near a two-year low with a $40 billion market cap. Last week, AVGO stock fell 7.7% despite an early entry on Tuesday.
Sources told the Wall Street Journal that Apple wants to increase iPhone production outside of China. Among the reasons are Beijing’s “zero-covid” policies. Apple may ramp up production in India and Vietnam.
It is important to remember that overnight trading in Dow futures and elsewhere may not translate into actual stock market trading the next day.