Dow Jones Futures Await Fed’s Favorite Inflation Report; Tesla Rises Late On Elon Musk Pledge

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Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. The Federal Reserve’s Favorite Inflation Gauge took effect Friday morning, with Tesla shares rising in the second half after Elon Musk’s comments.


The stock market suffered heavy losses on Thursday, wiping out Wednesday’s gains and losing even more amid negative company news, economic data and bearish comments from billionaire investor David Tepper. Major indexes broke through major levels and many major stocks fell. The stock posted a small loss, but the closing drop was still significant.

NVIDIA (NVDA), Ram Research (LRCX) and other chip stocks suffered heavy losses as memory chip makers. micron technology (MU) missed the view, led low standards and announced staff and additional capital expenditure cuts.

of Tesla (TSLA) Meltdown ensued. Adding to company-specific factors, Tesla’s shares fell along with other automakers on Thursday. Carmax (KMX) cited the issue of vehicle affordability as a major quarterly failure. TSLA’s stock rose slightly after Elon Musk suggested he won’t make any new stock sales until 2023.

Other Megacaps Show Bearish, Apple Sliding Again Towards Bear Market Lows (AMZN) Already have. microsoft (MSFT) has breached key support.

Investors should be mostly cash, reduce their already modest exposure and significantly refrain from new purchases.

Third-quarter GDP growth was revised higher than expected, along with the report’s inflation gauge. Initial unemployment claims rose modestly, but less than expected. His November index of leading economic indicators fell sharply, boosting talk of a recession next year.

PCE inflation data

On Friday, the Department of Commerce will release its price index for personal consumption expenditures for November. Inflation data is part of the monthly income and expense report.

The PCE price index should be up 0.2% over October and the core price should be up 0.2%. PCE inflation should ease to 5.5% from 6% in October. Core PCE inflation is expected to slow to 4.6% from 5%.

PCE inflation has been the Fed’s favorite price indicator for some time. Recently, Federal Reserve Chairman Jerome Powell said he was keeping a close eye on prices for PCE services, excluding housing.

Personal income should rise 0.3% in November and consumer spending should rise 0.2%. In recent months, Americans have started saving and increasing credit fees.

dow jones futures today

Dow Jones futures rose 0.1% to fair value. S&P 500 futures were up 0.2%, Nasdaq 100 futures were up 0.15% and TSLA shares were up slightly.

The 10-year Treasury yield rose two basis points to 3.69%.

Crude oil futures rose more than 1%.

PCE inflation figures will be released at 8:30 am ET. Durable goods data for November will also be released at that time, and new home sales for November will be released at 10am ET.

Note that overnight trading on Dow futures or elsewhere does not necessarily lead to actual trading at the next regular stock market session.

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stock market rally

The stock market rally started weak and continued to fall through mid-afternoon. After that, the major indexes moderated their losses, but still suffered.

The Dow Jones Industrial Average fell just over 1% in stock market trading on Thursday. The S&P 500 Index fell 1.45% for him, with Tesla shares and LRCX performing the worst. The Nasdaq Composite fell 2.2%. The small-cap Russell 2000 was up 1.3%.

Apple’s stock fell 2.4% to 132.23, not far from the June bear market low of 129.04. Fellow Dow Jones giant Microsoft is up 2.55% below the 50-day line after holding key levels since early November. Amazon’s stock fell 3.4%, nearly below its March 2020 Covid-crash low.

Nvidia fell 7% but found support at the 50-day line.

US oil prices fell 1% to $77.49.

The 10-year Treasury yield fell one basis point to 3.67%. Yields on two-year US Treasuries, which are more closely tied to Federal Reserve (Fed) policy, edged higher. The market still expects a 1/4 point rate hike in February and March.


Among the growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 1.9%, with MSFT shares being the main component. The VanEck Vectores Semiconductor ETF (SMH) plummeted 4.15%. Nvidia shares, LRCX and Micron are notable SMH holdings, but the chip weakness was widespread.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) rose 3.4% to a five-year low. The ARK Genomics ETF (ARKG) fell 1.1%. TSLA shares are major holdings across Ark Invest, but in particular by ARKK.

The SPDR S&P Metal Mining ETF (XME) fell 1.75%. The US Global Jets ETF (JETS) fell 2.1%. The SPDR S&P Homebuilders ETF (XHB) is down 0.9%. The Energy Select SPDR ETF (XLE) was down 2.3% and the Financial Select SPDR ETF (XLF) was down 0.9%. The Healthcare Select Sector SPDR Fund (XLV) was down 0.1%.

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tesla stock

Tesla shares plunged 8.8% to 125.35 on Thursday, their lowest since September 2020, after heavy selling continued. Tesla late Wednesday doubled its year-end delivery discount in the U.S. to his $7,500. That’s because concerns about CarMax’s affordability have hit automakers and dealers widely. TSLA’s stock fell nearly 36% in his December alone.

However, Tesla Elon Musk said in a Twitter Spaces call Thursday night that he “will not sell stocks next year under any circumstances…I will not sell stocks until 2024-2025.”

Musk has sold about $39 billion worth of Tesla stock since the stock peaked in November 2021, including another batch in mid-December. Musk has said on several occasions that he sold more shares after the sale.

But Musk has made it clear that he doesn’t tone down his political tweets. “I’m not going to hold back my opinion just to boost the stock price,” he said.

TSLA shares rose 1% in overnight trading.

Market rally analysis

The stock market rally was bearish on Thursday, with major indices plummeting on economic data and business news.

The S&P 500 index, which just regained its 50-day line on Wednesday, has sold below Tuesday’s intraday low. The Nasdaq did as well, but both closed above Tuesday’s lows.

The Dow Jones fell slightly below Monday’s intraday low, but rallied to close above the 50-day line.

Stocks for Apple, Amazon, Microsoft, and especially Tesla look terrible, but this isn’t just megacap selling. The Invesco S&P 500 Equal Weight ETF (RSP) fell 1.1% on Thursday, falling below the 50-day line.

The SMH Chip ETF has broken below the 50-day line just days after jumping to a multi-month high on December 13 above its 200-day average. Unlike the S&P 500, the SMH closed well below Tuesday’s lows.

With the exception of a few defensive or defensive growth names, major stocks took another big hit on Thursday. Some metals and mining stocks still look okay on the weekly charts.

The stock market rally is under great pressure and is just holding up.

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what to do now

Market performance continues to deteriorate, with the trend turning decisively negative shortly after the market opened on December 13th.

Market exposure should be low and limited to working positions only. Still, an investor may want to take a partial profit or simply close some trades to make a profit.

At some point the market will bounce back like Wednesday. Don’t get swept away by strong opens, or even strong sessions.

Investors should be working on their watchlist. If you focus on stocks with strong relative strength, or stocks that maintain important levels such as the 50-day line, and the current chart doesn’t look good, it’s annoying.

Read The Big Picture daily to understand the market direction and key stocks and sectors.

Follow Ed Carson on Twitter. @IBD_E Carson Stock market updates and more.

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