Dow Jones Futures: Tesla, Shockwave, Other Elastic Stocks Buckle as Treasury Yields Soar
The Dow Jones futures rose slightly overnight, along with the S&P 500 futures and Nasdaq futures. The stock market closed lower on Thursday, with resilient growth leaders selling as Treasury yields skyrocketed.
Tesla (TSLA), Celsius Holdings (CELH), Shockwave Medical (SWAV), Enphase Energy (ENPH) and On Semiconductor (ON) are the five holdout stocks that are now coming under heavy pressure.
These shares are not broken yet. It is possible that the recent action will end as a bullish shakeout and a test of key support. But anyone who has bought these names in the past few sessions is sitting at a good loss, with the risk that these holdouts will be broken in the coming days.
CELH stock and Shockwave Medical are on the IBD leaderboard watchlist. Tesla Stock, Celsius, Shockwave, Enphase Energy are all up at IBD 50. ENPH Stock and Onesemi IBD Big Cap are at 20.
FedEx (FDX) released official first-quarter results during Thursday’s session after announcing disastrous preliminary data last week and pulling guidance amid global economic weakness. On Thursday, FedEx announced higher package rates and cost-cutting measures to save $2.27 billion from $2.2 billion in fiscal 2023. The shipping giant stuck with fiscal 2025 EPS and sales targets.
FDX stock rose 0.8% to 154.41 after hitting a two-year low intraday.
Costco Wholesale (COST) reported earnings late Thursday.
Costco earnings and sales topped fiscal fourth quarter views. The warehouse giant said it has no plans to increase membership fees right now, despite some speculation that an announcement could be made on Thursday. Most of Costco’s profit comes from membership fees.
COST stock fell marginally overnight. The stock fell 1.2% to 487.17 in Thursday’s session, hitting a two-month low.
dow jones futures today
Dow Jones futures rose 0.2% versus fair value. S&P 500 futures rose 0.2% and Nasdaq 100 futures rose 0.1%.
Remember that overnight action in Dow futures and elsewhere does not necessarily entail actual trading in the next regular stock market session.
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stock market thursday
The stock market fell sharply, led by tech and small caps, as Treasury yields turned higher. The Dow Jones remained positive in the afternoon, but again approached close.
The Dow Jones Industrial Average fell 0.4% in Thursday’s stock market trading. The S&P 500 index lost 0.85%. The Nasdaq Composite retreated 1.4%. The small-cap Russell 2000 dropped 2.3%.
US crude oil prices rose 0.7% to $83.49 a barrel, well off early morning highs. US natural gas prices fell 8.9% to a two-month low.
The 10-year Treasury yield rose 20 basis points to 3.71%, the highest since February 2011.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slipped more than 3%. The iShares Extended Tech-Software Sector ETF (IGV) offered a 1.5% discount. The VanEck Vector Semiconductor ETF (SMH) was down 2.8%.
The SPDR S&P Metals & Mining ETF (XME) dropped 0.4%. The SPDR S&P Homebuilders ETF (XHB) dropped 2.1%. The Energy Select SPDR ETF (XLE) was down 0.4%. Health Care Select Sector SPDR Fund (XLV) rose 0.5%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) fell 4.3% and the ARK Genomics ETF (ARKG) fell 2.8%. Tesla stock is a major holding in Arch Invest’s ETF.
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Celsius stock fell 8.5% to 89.90, breaking below its 50-day line for the first time in three months and lowering its recent consolidation low. After this, the stock of CELH fell 3.9 percent on Wednesday. The energy drinks leader deserves a breather after tripling from early May to late August. In the next few weeks, CELH stock may find fresh ground with a buy point of 118.29.
Its relative strength line is just below record highs. The risk is that this relative winner turns into an absolute loser.
SWAV stock fell 9.1% to 258.84 on Thursday, sinking its 50-day moving average. On Wednesday, shares of the medical products firm fell 1.85% after falling below an intraday high of 300.96. Perhaps this is where Shockwave stock could find support and a bullish rally.
Enphase stock fell 6.9% to 283.63, below its 21-day line and testing its 10-week line for the first time since July. Shares fell just 15 cents on Wednesday, but rose intraday to 318.49. This could be a foothold for Enphase stock. The RS line for Enphase stock has just dipped after hitting new highs for weeks.
The stock on Semiconductor fell nearly 5% to 64.96, breaking below its 50-day line for the first time in two months and a recent low. Intraday Wednesday, the stock rose to 71.77, briefly flashing various buy signals before lowering for a 0.2% loss.
Tesla stock fell 4.1% to 288.59 below its 200-day line and was finding support on its 50-day line. On Wednesday, the stock declined by 2.6 per cent to fall below 313.80 intraday. This could be a healthy shakeout, assuming TSLA stock can stay around the current levels. At the close of Friday, its recent short consolidation would be a reasonable base within a much larger pattern. The buy point would be 314.74 but a handle with a slightly lower entry of 313.90 on the weekly chart.
Meanwhile, Tesla is seeing demand issues in China, partly due to increased production in Shanghai. With BYD sealed deliveries just weeks away and the Nio ET5 starting September 30, the China EV market is keeping a close eye on TSLA stock investors.
Tesla Vs. BYD: Which EV giant is the better buy?
stock market analysis
The stock market continues to fall, with major indices closing in on their June lows, certainly losing sight of their 50-day moving averages.
Can the stock market boom? Sure.
Treasury yields may need to cool somewhat for equities to rebound. It wouldn’t be a surprise for yields to stop or even retreat in a few days or weeks. But the underlying forces driving Treasury yields remain.
The Fed is raising rates aggressively, and it will continue to raise rates and leave them high, even as policymakers send strong signals that the US risks a clear recession in 2023.
It’s just a tough environment for stocks. Perhaps if inflation starts to calm down rapidly, the market may begin to backtrack on rate hike forecasts. But that week will be far. And inflation may calm down as the economy weakens further.
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What should we do now
The correction in the stock market is getting worse. There is a very real danger that the major indices may hit new lows. Holdout stocks such as Shockwave, Celsius, Tesla and Enphase are coming under increasing pressure.
Investors should not be enthused by a strong market open, an intraday rally, or a day or two of solid gains. This can be difficult, as some of the stocks mentioned in this article will make big moves when the market goes up.
Nevertheless, investors should wait for real signs of market consolidation through the follow-through day. Still, there will be good reasons to be cautious.
Keep working on the watchlist. Pay attention to relative strength, even if the charts look damaged.
Eli Lilly (LLY) and other drugmakers, along with some biotechs, are showing some strength.
Read The Big Picture every day to keep up with the market direction and key stocks and sectors.
Please follow Ed Carson on Twitter @ibd_ecarson For stock market updates and much more.
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