Futures Await the Fed; That’s what matters

Dow Jones futures rose early Wednesday, along with S&P 500 futures and Nasdaq futures, with focus on the Federal Reserve meeting announcement. Leading indicators fell on Tuesday as the Federal Reserve began its two-day policy meeting.




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Tesla stock flashed briefly with a strong buy signal, although there were weaker than expected signals Tesla (TSLA) Demand in China. It comes in a big middle Ford Motor (f) Warning of supply costs as well as incomplete vehicles. Ford stock fell 12%, with General motors (GM) down 5.6% despite an EV supply deal with hertz (HTZ).

In addition to Tesla, chip makers on semiconductors (ON) and demon (PI) show strength with Neurobiological Sciences (NBIX) and the lithium giant Square meters (Square meters).

apple (AAPL) stock rose for the second consecutive session. Apple stock is still below key levels. Meanwhile, huge technology stocks Microsoft (MSFT) and the father of Google the alphabet (GOOGL) hit 52-week lows.

NBIX stock is on the IBD Leaderboard. TSLA stock and On Semiconductor, also known as Onsemi, is on IBD 50. ON stock is at IBD Big Cap 20. Impinj is Tuesday’s stock IBD.

The video included in this article discusses market action on Tuesday and analyzes neurobiological sciences, Wolfspeed (WOLF) and PI stock.

Fed meeting

Policy makers appear to be tied for a third consecutive Fed rate hike of 75 basis points, due to be announced at 2 PM ET on Wednesday. Markets see a small opportunity for a massive 1 pip rally.

The key is what the Fed now sees. The quarterly forecast will indicate where the central bank sees the federal funds rate at the end of 2023, and under what economic conditions. Federal Reserve Chairman Jerome Powell, in his speech at Jackson Hole on August 26, made clear that the Fed is willing to risk a recession in order to control inflation.

Powell will speak at 2:30 PM ET, possibly giving some hints about a near-term rate hike by the Fed. Currently, markets are betting on a fourth move of 75 basis points in November, followed by 50 basis points in December. This should push the fed funds rate by the end of the year to 4.25%-4.5% from 2.25%-2.5% currently. Before the August CPI on September 14, markets were looking at 3.75%-4% at the end of 2022.

Dow jones futures contracts today

Dow futures rose 0.1% against fair value. S&P 500 and Nasdaq 100 futures rose 0.1%.

The 10-year Treasury yield fell one basis point to 3.56%.

Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.


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stock market tuesday

The stock market fell on Tuesday as the Federal Reserve meeting announcement was approaching. The late afternoon bounce faded into the close.

The Dow Jones Industrial Average is down 1% in stock market trading on Tuesday. The S&P 500 lost 1.1%. The Nasdaq Composite Index is down 0.95%. Small cap Russell 2000 lost 1.4%.

Shares of Apple, a member of the Dow Jones, S&P 500 and Nasdaq Composite, rose 1.6% to 156.90. AAPL stock hit the 21-day resistance and is still below the 50-day and 200-day lines after the big bearish reversal last week. But a decisive move above the 50-day and 200-day lines could provide a fresh early entry.

And US crude for the month of October fell 1.5 percent to $ 84.45 a barrel. Crude oil futures for November, now the near-month contract, fell 1.7% to $83.94.

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

ETFs

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) is down 1.3%. The ETF (IGV) in the iShares Expanded Tech-Software Sector (IGV) was down 1.5%. The VanEck Vectors Semiconductor Index (SMH) was down 1.4%.

The SPDR S&P Metals & Mining ETF (XME) was down 2.7%. The Energy Select SPDR ETF (XLE) is down 0.7% and the Financial Select SPDR ETF (XLF) is down 1.5%. SPDR Healthcare Sector Selection Fund (XLV) slid 1.2%.

Reflecting speculative story stocks, the ARK Innovation ETF (ARKK) is down 2.5% and the ARK Genomics ETF (ARKG) is down 1.6%. TSLA stock is a major ownership across Ark Invest’s ETFs.


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PI stock

Impinj shares fell 2.5 percent to 89.66 on Tuesday. The tracking chip maker’s shares are finding support on the 21-day and 10-week streaks. PI stock is making a new consolidation which should be a proper base by Friday close with 99.10 buy pips. Investors can use 93.46, just above the short-term highs, as an early entry still close to the 10-week line.

The RSI line is at the highest levels, which is a bullish sign for PI stock as it is overtaking the S&P 500.

in the store

On the semiconductor front, the semiconductor stock fell 2.4% to 68.48 after rising 1.8% on Monday. Shares of the EV-focused chip maker closed just below the 21-day 10-week streak.

Onsemi’s RS line is near the highs.

After a failed breakout in late August from a long base, ON stock could have a new shallow base next weekend. Investors can use 73.03 as a solid income, which will also be above the high of the previous fix.

NBIX stock

Neuron stocks fell 0.7% to 107.09, once again finding support at the 21-day moving average. NBIX stock has a flat base with 109.36 buying points, according to MarketSmith analysis. The flat base is slightly higher than the previous hold, making this base formation on the base. Investors can use the movement above Monday’s high of 108.71 as a slightly lower entry. NBIX stock RS line reached a new high.

SQM stock

SQM stock is down 2.4% to 104.66, right at the 21-day streak. Shares of the Chilean lithium and fertilizer giant tried to break out of the base of a teacup with a handle earlier this month, but never closed above 113.80 buying points. The good news is that the 50-day streak is starting to catch up.

SQM’s RS line is approaching highs.

Tesla Stock

Tesla stock rose to 313.33, extending its gains slightly and moving above a very strong buy point at 309.22. But the shares faded, ending 0.1% at 308.73. TSLA stock is approaching 314.74 buying points from a short consolidation, within a much larger consolidation that could be a suitable base this weekend.

The RS line was recently rising just below its early April highs.

Buying TSLA shares, or any stock, in the current market environment would be very aggressive.

CEO Elon Musk on Tuesday tweeted about Optimus, the Tesla robot bot it might show off at the company’s Artificial Intelligence Day on September 30. Most experts say a useful general-purpose robot is still a long way off. He also hinted at the improved Smart Summon feature or autopark feature, which has had problems over the years.

However, Tesla China sales are missing expectations. Domestic sales should continue to hit a record high in September, as Shanghai capacity expanded again. But Tesla’s vehicle insurance registrations have plummeted in the last week, a time when it’s usually skyrocketing.

Tesla China wait times have fallen sharply in the past few weeks, with the electric car giant resorting to massive insurance support to bolster end-quarter sales. That could portend an actual price cut later this year.


Tesla vs. BYD: Which EV giant is the best one to buy?


stock market analysis

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

The good news about Tuesday is that stocks did not rebound amid the big news regarding the Federal Reserve. This is in contrast to Jackson Hole’s August 26 speech by Federal Reserve Chairman Powell, or the September 14 CPI inflation report.

It is no coincidence that the stock market is struggling with rising Treasury yields.

The Summer Bull case revolved around the Federal Reserve. First, the Fed was expected to slow down the rate hike soon, and then start cutting rates in 2023. Then, there is still hope that the Fed will cut rates and pause by the end of the year.

But the Fed is now on track to raise interest rates aggressively through the end of the year, with more likely to happen in 2023. That means a lot of pain for the economy.

The current environment of low growth and high inflation has not been entirely easy for businesses. stronghold, FedEx (FDX) and General Electric (General Electric) was among those warnings last week.

The sale of Ford stock on Tuesday, after FDX and GE last week, shows that investors have not been pricing in disappointingly large dividends. Expect more warnings in the next few weeks.

Given the weakness in the past several weeks, the market is likely to rebound on Wednesday after the Fed meeting and Fed Chair Powell’s speech. Keep in mind that the market often reverses course in reaction over the course of the second day of the Fed meeting.

Until it becomes clear when the Fed may start to slow down and stop its tightening, it is hard to see markets making meaningful progress. It’s not hard to see major indexes test or lower their June lows.


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What are you doing now

The market correction is back in force as the Federal Reserve is close to raising interest rates sharply again, with no end in sight. Companies are posting big warnings amid tough macroeconomic conditions that are likely to get worse.

Investors should have little or no exposure and not make new purchases. Wait for a confirmed uptrend, which is likely to include the major indicators reclaiming their 50-day moving averages. Even in this scenario, other technical hurdles, in addition to the Federal Reserve and the economic background, should keep investors cautious.

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

Read the big picture every day to stay in sync with market trend, stocks and leading sectors.

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