Dow Jones futures rose slightly on Tuesday, along with the S&P 500 and Nasdaq futures. The stock market rebound retreated on Tuesday, finding resistance in a natural area after Monday’s big jump. But the main indexes found support at natural levels.
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Veeva Systems (VEEV), FuboTV (FUBO), Maravai LifeSciences (MRVI) presented notable earnings reports.
Growth stocks did not have a good day. Zoom Video (ZM) and Target (TGT) suffered unpleasant reversals after profits. Tesla (TSLA) rivals Nio (NIO), Xpeng (XPEV) and Li Auto (LI) wiped out the news, while EV stocks struggle as traditional auto giants General Motors (GM) and Ford (F) make bullish movements.
About that, Rocket companies (RKT) lived up to its name. RKT’s shares rose 71% to 41.60, reaching a record high when the heavily sold mortgage lender became the latest social media-driven tightening game. Rocket’s shares jumped 10% on Friday, after strong gains, and then 11% on Monday. In the overnight trade, RKT’s shares fell slightly.
The IBD stock of the day approaches a buying point with strong gains, ‘Ton of money’
Main earnings
Maravai’s earnings surpassed visualizations while the company manufactures a compound for the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine. Maravai sees the 2021 revenue more than doubling. MRVI’s shares shot up almost 20% overnight, signaling a further rise after the shares closed down 3.9%.
Veeva’s earnings and revenues exceeded estimates, while showing an optimistic orientation. VEEV’s shares rose slightly in extended trading. The shares fell 2.2% on Tuesday, around the 50-day line, after the failure of a breach in late February.
FuboTV reported a greater-than-expected loss, but it outpaced revenue and subscriber growth. FUBO’s shares fell in the night trade. The shares rose 8% on Tuesday, resuming the 50-day line and breaking a downtrend in a very deep control in a very deep consolidation. The sports-focused streaming operator is moving to join the online sports betting game.
Tesla’s shares are on the IBD Leaderboard and IBD 50. Veeva’s shares are on the IBD Long-Term Leaders.
Dow Jones Futures Today
Dow Jones futures were 0.1% above fair value. S&P 500 futures were up 0.1%. Nasdaq 100 futures were up 0.1%.
Keep in mind that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks at the stock market’s high on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 115.25 million. Deaths from Covid-19 reached 2.55 million.
Coronavirus cases in the US reached 29.35 million, with deaths above 528,000.
The White House now says there will be enough coronavirus vaccine available to all Americans by the end of May. The Biden government sought to keep expectations low, even with the increase in vaccinations in January and February and the Johnson & Johnson (JNJ) treatment of a dose just beginning.
Stock market rally
The stock market recovery gave up some of Monday’s strong broad-based gains. The Dow Jones Industrial Average fell 0.5% in Tuesday’s stock market trading. The S&P 500 index declined 0.9%. Nasdaq made up 1.7%.
The growth actions were impacted once again.
Among the best ETFs, Innovator IBD 50 ETF (FFTY) fell 1.65%, while Innovator IBD Breakout Opportunities ETF (BOUT) fell 2.3%. The iShares Expanded Tech-Software Sector ETF (IGV) fell by almost 2%, with Zoom’s stock a notable component. VanEck Vectors Semiconductor ETF (SMH) fell 3.1%.
Reflecting more speculative story stocks, Ark Innovation ETF sank 2.3% and Ark Genomics ETF 1.9%.
Video zoom, reverse target
Zoom Video’s earnings crushed views on Monday, while the video conferencing giant gave an optimistic revenue orientation. The desired gains also hit amid booming digital sales.
Zoom’s shares jumped 7.4% on Tuesday morning – after rising more than 10% overnight – but reversed almost immediately. ZM’s shares closed down 9% to 372.79, below its 50-day line. It is not clear why the Zoom was sold. But investors need to sell on the basis of technical data, not expect negative fundamental news to be obvious.
The target stock also rose solidly after opening Tuesday, rebounding from its 50-day line and eliminating a bearish trend, two solid buying signals. But TGT’s shares fell after Target’s management said it would spend heavily to strengthen fast-growing online operations. The target stock closed down 6.8%, reducing the low of its flat base.
EV Stocks lose load
Nio’s shares plunged 13% to 43.29. This is the lowest close since December 14. On Monday, Nio reported a larger-than-expected loss in the fourth quarter on Monday. The premium EV maker had smaller deliveries in February compared to January amid the Lunar New Year shutdowns and celebrations. Nio also said the lack of chips is taking its toll.
Xpeng and Li Auto shares fell 11% and 8.2%, respectively. Xpeng and Li Auto also reported lower sales in February amid New Year celebrations, although deliveries were up three digits from the previous year.
Tesla’s shares fell 4.45% to 686.44, hitting resistance close to a sharp bearish trend. The shares jumped 6.4% on Monday. TSLA’s inventory is well below its 50-day line.
GM, Ford Stock Rev Superior
GM shares were up 3% to 54.11. On Monday, General Motors rose 2.4%, extending Friday’s jump from the 10-week line, but also staying above its 21-day line, a downward trend line. These factors offered an initial purchase opportunity, but it is starting to look a little prolonged now.
Ford shares jumped 4.8% to 12.55, exceeding the purchase points of 12.14 and 12.25 and exceeding last week’s three-year high. The relative strength line for Ford’s stock is at a 52-week high.
Both GM and Ford are benefiting from strong sales of SUVs and trucks, while spending heavily on EVs, cheers investors.
Stock market analysis
On Monday, the Nasdaq rebounded above its 50-day line, closing just above its 21-day exponential moving average and just below very recent highs. The Dow Jones and S&P 500 jumped from their 50-day lines, clearly resuming their 21-day lines, not far from all-time levels. Monday’s volume was well below average and Friday’s levels, however.
On Tuesday, Nasdaq fell from its 21-day line. It closed close to session lows, giving up more than half of Monday’s 3% gain, back to its 50-day line. The large Nasdaq 100 cap reduced its 50 days. The Dow Jones and S&P 500 index fell modestly, finding support on its 21-day lines.
With the main indices essentially reaching resistance and support in natural areas, it is difficult to give much importance to Tuesday’s action. The stock market recovery remains under pressure.
What to do now
Investors are likely to keep exposure relatively low and be cautious about any new purchases while market direction remains in flux.
If Nasdaq breaks above the 21-day line and short-term highs, investors may start to be more aggressive. If the Nasdaq breaks decisively below last week’s lows, the rise is likely to end, triggering a solidly defensive stance.
Investors should be aware of the sectors of the real economy and may want to have at least part of their portfolio dedicated to these stocks. They can lead the next stage of the bull market. Diversifying its main shares reduces the massive loss of the portfolio because it is too focused on speculative growth.
However, if the market falls in a correction, most stocks are likely to have problems. The relative strength in a market correction can still be an absolute loss.
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