Dow Jones futures rose slightly overnight, while S&P 500 and Nasdaq futures fell with Treasury yields hovering above 4%. Tesla Investor Day kicks off as Salesforce.com, Snowflake and other software earnings headline a busy overnight session.
The stock market rally took further damage on Wednesday as the 10-year Treasury yield hit 4% on the day. Some blue-chip stocks are flashing buy signals on the news. However, the S&P 500 and the Nasdaq headed lower.
apple (AAPL) fell back below the 200-day line as International Data Corp. now sees global smartphone sales falling slightly again in 2023 against its previous forecast of a modest rebound.
Tesla Investor Day opened with expectations of major announcements. Despite speculations about the unveiling of a new electric car, Tesla (TSLA) executives at the event said that a next-generation platform or vehicle would come at a “later date.” CEO Elon Musk’s “Master Plan 3” envisioned the world making a major push for clean energy.
Late in the event, CEO Elon Musk confirmed that Tesla will build the plan for Mexico.
Tesla stock fell strongly overnight as the investor day was a bit of a headline.
Notable software makers Salesforce.com (CRM), splink (SPLK), Box (Box), Octa (OKTA) And snowflake (snow) reported late Wed. CRM stock and OKTA were big overnight winners, while SNOW, Box and Splunk stocks fell.
Dow jones futures today
Dow futures rose 0.2% against fair value. CRM stock is a component of Dow. S&P 500 futures fell 0.4% and Nasdaq 100 futures fell 0.5%. TSLA stock is a component of the large Nasdaq 100.
The 10-year Treasury yield rose 4 basis points to 4.03%, above the key 4% level.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Tesla Investor Day
The big presentations for Tesla’s Investor Day took place on Wednesday night.
The EV giant had said weeks ago that it would release more details about its next-generation EV platform on Tesla Investor Day, with much speculation that Tesla will unveil a lower-cost model and possibly give an idea of when production will begin.
The executives said Tesla aims to cut assembly costs by 50% in its next-generation vehicle platform and reduce its factory footprint by 40%.
But Tesla hasn’t unveiled any next-generation cars, saying that will come “at a later date.”
During the Q&A segment, Musk confirmed that “Giga Mexico” is coming. The Mexican president said on Tuesday that Tesla will make the announcement on Investor Day.
Tesla said the Mexico plant will build the next-generation vehicle. But that suggests a hypothetical, low-cost electric vehicle won’t arrive until 2025 or later. For now, Tesla’s cheapest car will face competition from a slew of competitors, especially in China.
Tesla says it aims to cut silicon carbide by 75% for its next-generation drive unit. This is not good news for silicon carbide drivers such as on semiconductors (on), wolfspeed (wolf) And Aehr Test Systems (AEHR). All three EV chip stocks have fallen of late.
Many of Tesla’s plans, from Mexico to domestic operations, could also serve to reduce the electric car giant’s dependence on China.
TSLA stock fell nearly 6% overnight on Tesla Investor Day. Tesla shares fell 1.4% to 202.77 on Wednesday, settling above the 21-day line.
The stocks arguably have a cup-and-handle pattern dating back to early November. This may indicate 217.75 buy points. But investors may have to wait for TSLA stock to clear its 200-day line, currently around 221.
CRM stock rose 16% late on after Salesforce earnings topped views and the software giant gave bullish guidance and doubled buybacks to $20 billion. Salesforce stock rose 2.3% to 167.35 on Wednesday, extending its rebound from the 200-day line and moving above the 21-day line. CRM stock is now pointing to gap higher above a cup handle buy point of 178.94.
SNOW stock fell 7% in extended action as Snowflake’s earnings beat fourth-quarter opinions, but the data analytics company channeled declines in first-quarter and full-year revenue. Snowflake also announced a $2 billion share buyback plan.
SPLK stock fell 3% after hours as Splunk’s earnings outperformed, and the database and security software company channeled declines in first-quarter and full-year revenue. Splunk stock lost 2 cents Wednesday to 102.48, holding for 21 days at the base of a cup by handle, according to MarketSmith. The buy point is 110.05.
BOX stock fell 10% overnight as Box topped earnings views, but it was down. The software storage company is working on a new flatbed on top of a previous flatbed. The line of relative strength of BOX stock is at a multi-year high.
OKTA jumped 14% in late trading as the cybersecurity firm won fourth-quarter opinions and steered for fiscal 2024 revenue. Okta stock is set to return above 200 days, which now roughly coincides with a still valid 74.28 buy-bottom point. Shares rose 0.2% to 71.44 on Wednesday, holding it for 50 days.
The stock market rose on Wednesday
The stock market rally saw a mixed session, but with an overall negative slant.
The Dow Jones Industrial Average rose in the stock trading session on Wednesday. The S&P 500 fell 0.5%. The Nasdaq Composite sank 0.7%. Small cap Russell 2000 rose 0.1%.
Apple stock, which is a constituent of the Dow Jones, Standard & Poor’s 500 and Nasdaq, fell 1.4% to 145.31, retreating from the 200-day level and reaching a one-month low. Microsoft (MSFT), nvidia (NVDA) And Tesla shares were also big negatives on Wednesday.
The 10-year Treasury yield jumped 8 basis points to 3.99%, reaching 4% at various times. US manufacturing reports for February came in below views, still pointing to a moderate contraction. But the metrics of China’s manufacturing and services sectors jumped.
Copper prices rose 1.7%.
US crude oil prices rose 0.8% to $77.69 a barrel.
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Market rally analysis
The stock market saw a mixed rally on Wednesday, closing at session lows. But the major indices are struggling around key levels.
The S&P 500 fell more than the 50-day line and nearly touched 200 on Wednesday morning. The Nasdaq fell back below the 200-day line, with the 50-day not much lower.
The Russell 2000 edged higher despite resistance at the 21-day line for the third consecutive session.
A sluggish Dow Jones hit its worst level since early November on the day, before making gains.
Leading stocks provided reasons for optimism.
First Solar (FSLR) And Exxon Enterprise (Axon) on profits. Freeport McMoRan (FCX), IBD stock on Wednesday, gave a buy signal as a major mine reopens and copper prices recover.
Most leaders have continued to establish or hold out. But can this continue if the general trends do not improve?
The market rally is under pressure. The leading indices can’t afford to lose more ground. On the upside, the S&P 500 should regain the 50-day line, while the 21-day line is a major test for the S&P 500, Nasdaq, and Russell 2000.
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What are you doing now
Blue-chip stocks have been resilient in the decline, with more blinking buy signals in recent days. But if the market continues to suffer, the recent buy signals and breakouts will likely turn fake.
Investors should not look to increase exposure until the S&P 500 and Nasdaq regain their 21-day lines. If you wait and the market improves, some leading stocks will pass you by initially, but there will be plenty of other opportunities.
So look for stocks that are actionable, but also those that are created.
On the flip side, if the market or your individual holdings deteriorates, you will need to move further into the margin.
Be prepared, stay engaged, and be flexible.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @tweet For stock market updates and more.
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