Overnight, Dow futures were slightly higher, along with S&P 500 and Nasdaq futures. Advanced Micro Devices (AMD) and play lithium Levent (LTHMAddress another busy night of after-hours earnings. But investors’ focus is on the decision of the Federal Reserve’s meeting on Wednesday.
It’s the second day of a stock market rally attempt, but investors aren’t making big bets with the Federal Reserve raising interest rates.
AMD Securities, Livent & Shipping Matson (Matex) among the notable earnings reports after the close. AMD is only off its lowest in 2022, but its earnings and guidance are important to the semiconductor space. LTHM stock kicks off earnings for electric car battery material companies, with lithium giant Albemarle (ALB) Wednesday because of the rare earth miner MP . material (deputy) Thursday. MATX is among the shipping stocks that are trying to return to the top spot.
Early on Wednesday, LNG commander Cheniere Energy (liquefied natural gas) And Regeneron Pharmaceuticals (Region) on tap. LNG stockpiles are created in a new base. REGN stock has broken solid gains from a traditional buy point and early entry, although it hasn’t broken down.
There were some positive factors affecting the earnings on Tuesday. Stock LPX and Atcor (ATKR) are flashing buy signals on its strong results.
The video included in this article discusses market action on Tuesday and the announcement of the upcoming Federal Reserve meeting. It also analyzed Louisiana and Pacific stocks, ATKR stocks and ZIM Integrated Shipping (ZIM).
Dow jones futures contracts today
Dow futures are up 0.3% against fair value. S&P 500 futures rose 0.3%. Nasdaq 100 futures rose 0.4%.
Fed meeting decision
The Fed’s two-day meeting ends on Wednesday, with the Fed’s policy announcement at 2 PM ET and Fed Chair Jerome Powell’s press conference at 2:30 PM ET. The Fed is almost certain to raise rates by 50 basis points, to the 0.75%-1% range. Policymakers are also expected to agree to shrink the balance sheet, over three months, to about $95 billion a month.
The real question is whether the Fed and Fed Chair Powell’s statement will pave the way for a 75bp hike at the June-July meeting. Markets are already pricing in a strong opportunity to amplify the Fed’s rate increases as policy makers of late crack down on inflation.
Inflation may be peaking in terms of year-over-year earnings, but it may remain high for a long time, as workers get used to larger wage increases and companies are able to afford their higher costs.
The Fed also has to worry about recession risks from aggressive monetary policy, while the COVID-19 lockdowns in China and the Ukraine-Russia war have dented global economic activity while sourcing supply chains.
stock market rise
The stock market rally didn’t have much direction before the Fed’s meeting announcement, and eventually closed with little gains.
The Dow Jones Industrial Average rose 0.2% on Tuesday stock market trading. The S&P 500 rose 0.5%. The Nasdaq Composite Index advanced 0.15%. Small cap Russell 2000 rose 0.9%.
US crude oil prices fell 2.6% to $102.41 a barrel.
The 10-year Treasury yield fell 4 basis points to 2.96% after hitting a three-year high of 3% on Monday.
between the Best ETFsThe Innovator IBD 50 ETF (fifty) by 1.4%, while the Innovator IBD Breakout Opportunities ETF (fit) rose by 2.3%. iShares Expanded Technology and Software Fund (ETF)IGV) down 0.8%. VanEck Vectors Semiconductor Corporation (SMH) rose 0.8%, with shares of AMD notably held.
SPDR S&P Metals & Mining ETF (XME) rebounded by 2.3% and the US Global X Infrastructure Development Fund (ETF) )cradle) gained 0.8%. US Global Gates Foundation (ETF)Planes) rose 0.7%, ignoring the sell-off in hotel reservations and online shares. SPDR S&P Homebuilders ETF (XHB) rose by 1.15%. SPDR Specific Energy Fund (SPDR ETF)XLE) added 2.8% and the Financial Select SPDR ETF (XLF) 1.3%. SPDR Healthcare Sector Selection Fund (XLV) rose 0.3%
AMD earnings topped Expect with a 71% revenue increase. The chip giant was also guided by second-quarter sales. AMD stock jumped 7% overnight. Shares rose 1.4% to 91.13 on Tuesday, but are well below the major moving averages. AMD stock recently hit its worst level since last June.
living earnings It easily beats opinions, while the lithium miner also gave bullish guidance. LTHM stock is up 17% overnight, indicating a significant move above the 50-day and 200-day lines. Shares rose 2.6% Tuesday to 21.92. In late April, Livent stock fell below the 50-day and 200-day lines, but did not cut its lows in early March. ALB stock, announced late Wednesday, is up 3% in an extended move after rising 3% in the Tuesday session.
Matson earnings It narrowly beat while revenue just missed after the container shipping company provided upbeat preliminary numbers last month. MATX stock is up modestly in the extended business. Shares rebounded 3.4% Tuesday to 91.36, rebounding from the 200-day streak.
Market Rise Analysis
Tuesday’s modest gains are likely to be ideal as the Fed’s massive meeting decision approaches.
Market reaction to the Fed’s rate hike and guidance will be key, but don’t be surprised by the high volatility on Wednesday afternoon and beyond.
Tuesday marks the second day of the stock market’s bull run. Within two days, investors can start looking for a file Follow-up day On one or more major indicators to confirm a new market rally.
But we haven’t gotten there yet.
Sectors to watch
Energy stocks are formed again, especially those exposed to refining or natural gas, such as ExxonMobil (XOM) or Cheniere Energy.
Wood products companies and some building product plays look good. Louisiana-Pacific and Atcor made bullish moves on Tuesday in terms of earnings, while Weyerhaeuser (wye), Boys Cascade (bcc) And beacon supply ceilings (BECN).
Shipping companies had a strong business session. Dry Bulk Leaders Star Bulk Carriers (SBLK) And golden ocean group (GOGL) was doing well while container-focused Matson bounced off its major support and ZIM stock reclaimed its 50-day streak.
These are hopeful signs. And they might succeed if the stock market rally gains momentum. But other groups that have looked promising in recent weeks, such as REITs, medical products and travel theatres, have faltered or collapsed.
Meanwhile, growth stocks still look daunting. apple (AAPL) And Tesla (TSLA) are fighting around the 200-day moving average. Other massive covers look worse. Meanwhile, modest declines in IGV and ARKK suggest that even bargain hunters aren’t jumping into aggressive growth just yet.
What are you doing now
While an attempt is being made to rally in the market, it is not time to get much exposure, if any.
If the stock market rebounds due to higher Fed rates, investors may consider nibbling at a stock or two, or perhaps a broad sector of the ETF. But you have to be prepared to come back quickly.
There is nothing wrong with waiting for the follow-up day. Even when the market returns to a confirmed uptrend, you won’t want to rush to increase your exposure. Gradually expand your holdings as the market builds strength and be quick to exit if the rally falters.
For now, build these watchlists – in pencil, not ink. The REITs, miners, and medical products companies on your watch lists a week or two in advance will likely be replaced by new names. But the effort was not wasted. If you have an updated watchlist for when market trends become favorable, you will be in a good position to jump into new leaders early.
Read The Big Picture Every day to stay in sync with the trend of the market, stocks and leading sectors.
Please follow Ed Carson on Twitter at Tweet embed For stock market updates and more.
You may also like:
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”