The market rally is mixed as the White House sees Covid “stabilize”; Tesla Rival Nio gains exceed views

The market rally is mixed as the White House sees Covid “stabilize”; Tesla Rival Nio gains exceed views

Dow Jones futures were little changed Wednesday night, as were S&P 500 and Nasdaq futures, with rival Tesla Nio (NIO) headlining day-to-day earnings reports. Growth fell behind again in Wednesday’s stock market rally, as the recovery takes the lead amid a contained inflation report and the White House sees coronavirus cases “stabilizing”.


The Dow Jones and S&P 500 hit new all-time highs, along with steel, materials, industrials, finance and some retail businesses. The Nasdaq composite pulled back slightly, reducing losses even as Treasury yields fell following a colder-than-expected consumer price index. But many growth stocks suffered larger losses, including chip and software names such as Applied materials (AMAT) et CrowdStrike (CRWD), these graphics starting to look more damaged.

Amid tentative signs of spike in new Covid cases, coronavirus vaccine makers Modern (MRNA) and BioNTech (BNTX) sold hard. Supplier Maravai Life Sciences (MRVI) erased a big post-profit gain. Other Covid coins, such as Zoom video (ZM) and DocuSign (DOCU), has also receded, as better news about the virus may have weighed on popular software names in general.

On the bright side, a few recent IPOs surged on earnings on Wednesday, including Holdings reached (UPST), Proximity (DOCS) and Unity software (U).

But for the most part, growth took a back seat as the recovery games drove the advance.

Housing related businesses HR (HR) et Home deposit (HD) points of purchase compensated, with the manufacturer Lennar (LEN) undoubtedly exploitable. Related to shipping Text editor (TGH) and industrial play Crane (CR) erupted, while a trucking operator Former Domination (ODFL) flirted with a point of purchase. A capital letter (COF) and Five below (FIVE) have extended their recent breakouts.

Conclusion: sector rotation is indeed present in the stock market rally. Investors should adjust their portfolios and watch lists, but not change their holdings either.

After the closing, the Nio share, eBay (EBAY), high-end musical speaker Sonos (SONO) and American cannabis producer Green thumb industries (GTBIF) reported profits exceeding expectations.

Energy drink machine Celsius fund (CELH) reports early Thursday. Shares rose 1.2% to 77.81 on Wednesday, the eighth consecutive advance. CELH stock closed with a buy point of 83.10.

Tesla stock is on IBD Leaderboard and SwingTrader. MRNA, Celsius, CrowdStrike and Maravai shares are on the IBD 50. The CR share was the IBD share of the day Wednesday. COF action was the action of the day on Tuesday. RH Stock and Lennar were recent picks from Stock Of The Day.

The video embedded in this article analyzes Unity, Textainer and Crane stocks, as well as the overall market rally.

Dow Jones Futures Today

Futures contracts on Dow Jones increased slightly from fair value. Futures contracts on the S&P 500 were stable. Futures on the Nasdaq 100 fell 0.1%.

Keep in mind that overnight action on futures contracts on Dow and elsewhere doesn’t necessarily translate into actual trades during the next regular trading session.

Join the IBD experts as they analyze the exploitable stocks in the stock market rally on IBD Live

Coronavirus news

Coronavirus cases around the world have reached 205.32 million. Deaths from Covid-19 have exceeded 4.33 million.

Coronavirus cases in the United States have reached 36.97 million, with deaths exceeding 635,000.

There are signs that new cases around the world and in the United States could peak. The White House said on Wednesday that some states with an increase in the number of cases are seeing new infections level off. Vaccinations in the United States have increased dramatically in recent weeks, especially in states with low vaccination rates. Social distancing also appears to be on the rise.

Meanwhile, the European Medicines Agency is looking to probe for potential new side effects of mRNA vaccines, including certain skin reactions and kidney problems.

The mRNA inventory plunged 18% and the BNTX inventory plunged 17%, accelerating losses from Tuesday after coronavirus vaccine makers had huge runs. Maravai, which provides supplies to help manufacture Moderna and BioNTech’s mRNA vaccines, initially jumped 13% to an all-time high on strong profits. But MRVI stock closed 0.4% lower.

After the close, CNN reported that the FDA is expected to allow booster shots of the Covid vaccine within the next two days for immunocompromised Americans, who are less protected from jabs than others. Booster shots for the elderly and others could arrive in the coming weeks.

But Moderna and BNTX shares fell slightly overnight.

Stock exchange rally

The stock rally continued to show a sector rotation of growth towards recovery stocks.

Prior to the opening, the Consumer Price Index continued to post strong gains from a year earlier. But base prices cooled somewhat, lower than analysts’ opinions, as hot used car prices were almost flat from June after rising in the previous two months. The 10-year Treasury yield fell 1 basis point to 1.33%, ending a six-game winning streak.

U.S. crude oil futures rose 1.4% on Wednesday after initially sinking following White House calls for increased OPEC production.

The Dow Jones Industrial Average rose 0.6% in Wednesday’s stock trading. The S&P 500 Index climbed 0.25%. The Nasdaq composite dipped 0.2%. The Russell 2000 small cap advanced 0.5%.

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) lost 0.5%, while the Innovator IBD Breakout Opportunities (BOUT) ETF gained 0.8%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 0.25%. The VanEck Vectors Semiconductor (SMH) ETF edged down 0.3%.

The SPDR S&P Metals & Mining ETF (XME) climbed 2.3% and the Global X US Infrastructure Development ETF (PAVE) gained 1.8%. The US Global Jets ETF (JETS) rose 1.4%. The SPDR S&P Homebuilders ETF (XHB) rose 2.3%. The Energy Select SPDR ETF (XLE) rose 0.8% and the Financial Select SPDR ETF (XLF) rose 1.15%.

Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) fell 0.1% and ARK Genomics ETF (ARKG) fell 1.3%.

Five best Chinese stocks to watch

Key gains

Nio’s profits exceeded views, with the electric vehicle maker offering bullish revenue forecasts. Nio stock rose 1% in extended trading. Shares fell 0.6% to 43.97 on Wednesday, below their 50 and 200 day lines. Nio stock is in a very deep consolidation after peaking at 66.99 in January. But after this week, the Nio stock will have a cup base in the larger model, with 55.23 buying points.

Meanwhile, Tesla’s stock was quiet late. Shares edged down 0.3% on Wednesday to 707.82, holding above a buy point of 700.10. TSLA stock appears to be forming another shelf in recent sessions.

EBay’s profits have exceeded and the e-commerce giant has raised its forecast. EBay shares fell 1% overnight. Shares rose just over 1% to 68.02 on Wednesday, just recovering the 50-day line. EBay stock hit a record 74.13 on July 29, but then sold lower Amazone (AMZN) sales and forecasts that day and continued to decline amid disappointing backdrop Etsy (ETSY) perspectives.

Sonos’ revenue comfortably exceeds sight as the music speaker maker upped its advice. SONO stock jumped 10% into extended action, signaling an early entry after a rebound from the 50 day line. Shares fell 1.2% to 34.80 on Wednesday, closing just above 50 days. SONO stock has an official buy point of 44.82.

Green Thumb earnings exceeded second quarter views. GBTIF stock, which is traded over-the-counter, was not active in day-to-day trading. Shares fell 5% to 31.30 on Wednesday. Green Thumb shares have been consolidating for six months with a buy point of 39.21. Investors could use 35.25 as early entry for GBTIF stock.

Truly (TCNNF), another U.S. pot producer, reported early Thursday. GrowGeneration (GRWG), a jar supplies retailer, is also on sale ahead of the opening.

Market rally analysis

Sector rotation is very much present in the stock market rally, with the recovery leading and growth struggling. For a second day in a row, the Dow Jones and S&P 500 hit record highs. The Nasdaq has fallen to its 21-day line but remains close to historical levels. The small cap Russell 2000 is not advancing towards its 50 day line.

But while the Nasdaq still looks good, many growth stocks have come under pressure.

AMAT stock fell 2.35% and CrowdStrike fell 5.1%. The two also suffered notable losses on Tuesday. Those charts didn’t look bad at Tuesday’s close, although AMAT and CRWD stocks reduced their 21-day lines. But on Wednesday, however, AMAT and CRWD stocks sliced ​​their 50-day lines, the latter reaching its lowest level since June 21.

Yes, stock UPST, Doximity, Unity Software and FuboTV (FUBO) had big wins on Wednesday, but those were exceptions.

Steel, industrial, financial, real estate and discount retailers looked strong, with a number of breakouts in recent days.

Time the market with IBD’s ETF market strategy

What to do now

As always, investors should follow the stock market. Right now, the market rally is turning in favor of recovery and away from growth. Investors are likely to diversify even if that is not their goal, as they remove some weaker software or other growth names from their portfolios and replace them with steel, housing, or financial services such as HR. , Crane or Capital One.

Bulk growth stocks don’t need to be bailed out. Some are moving forward – or holding on like Tesla’s stock. Sector rotation could easily return to growth in the coming days or weeks.

Keep working on these watchlists. If you use screens and do your homework, you’ll spot potential new leaders before they flash buy signals.

Read The Big Picture every day to stay in tune with the market direction and major stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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