Here’s Why Fed Pivot Stocks Are Selling

Dow Jones futures fell along with S&P 500 and Nasdaq futures early Thursday, while Treasury yields rose sharply. The stock market rally after the US Federal Reserve (Fed) meeting suffered heavy losses on Wednesday. X The leading index rebounded after the Fed raised rates aggressively again, but hinted that it could start to slow rate hikes. However, Fed President Jerome Powell has suggested that rates will peak at a much higher level than previously predicted. Investors need to be cautious as the stock market rallies are hurting. But it’s not over yet. Albemarle (ALB), CF Industries (CF), Qualcomm (QCOM), Sarepta Therapeutics (SRPT), Fortinet (FTNT), Robinhood Markets (HOOD), World Wrestling Entertainment (WWE) and elf Beauty (ELF) reported after closing. . There have been a few people who have made great returns with ELF stocks. Before opening on Thursday, Cheniere Energy (LNG) and Quanta Services (PWR) announced their results. Liquefied natural gas giant Cheniere has reported unexpected losses and profits. Quanta Services reported inline revenue with the highest revenue. LNG inventories lost some while PWR inventories were not yet active. Both Cheniere and PWR stocks are trading near buy points in the shallow cupped bottom. According to industry data, Tesla (TSLA) sold 71,704 Chinese-made cars in October, up 32% year-over-year. It is down almost 14% compared to a year ago. September. Tesla cut prices in China late last month, but most of October’s sales are likely to be exports to Europe and elsewhere. Chinese electric vehicle and battery giant BYD (BYDDF) sold 217,816 vehicles, including all-electric vehicles (BEVs) and plug-in hybrids, last month, a record 217,816. 1 year ago. This includes 9,529 vehicles being exported as BYD begins its massive international expansion. LNG shares are on the IBD leaderboards and ALB shares, Sarepta Therapeutics and CF Industries are on the leaderboard watchlists. CF and SRPT shares are at IBD 50. To slow rate hikes, the Fed raised its benchmark interest rate by 75 basis points at its fourth meeting, ranging from 3.75% to 4%. The Fed hinted at a slower pace of rate hikes this year, citing the delayed impact of “cumulative” tightening. “When determining the rate at which the target range will increase in the future, the committee will take into account the cumulative tightening of monetary policy, the time lag at which monetary policy affects economic activity and inflation, and economic and financial developments,” the Fed said. – The name of the meeting. In a speech shortly after the Fed’s announcement, Fed Chairman Jerome Powell agreed that policymakers could delay rate hikes as early as December. He said the “speed” of rate hikes is less important than the point at which rates end. However, Powell suggests that the federal funds rate could be higher than the Fed’s September forecast of 4.6%. This suggests that the federal funds rate is 4.75%-5%. The market is currently expecting a 57% chance of a December rate hike at 50bps, slightly above Tuesday’s 50%. This will push the federal funds rate up to 4.25%-4.5%. Odds currently favor a minimum of 50bps (4.75%-5%) at the February meeting. Friday’s employment report will be important in setting expectations for rate hikes. The November employment report and two CPI reports are also expected to arrive before the next rate hike decision on December 14th. Dow Jones Futures Dow Jones Futures was down 0.4% today. fair value. S&P 500 futures fell 0.6% and Nasdaq 100 futures fell 0.9%. Futures are starting to reduce earnings slightly. Before the US market opened on Thursday, the Bank of England raised interest rates by 75 basis points to 3%, as expected. This suggests that yields will break the multi-day range and move towards a 14-year high set at the end of last month. The dollar rose after a strong bullish reversal on Wednesday. Crude oil futures fell more than 1%. Copper futures fell 2%. Hong Kong’s Hang Seng index fell 3.1%. A senior Chinese health official said China’s “anti-coronavirus” policy will continue following an unconfirmed social media conversation that caused Chinese stocks to rally Tuesday-Wednesday. China’s private sector Caixin Service Purchasing Managers Index fell 0.9 points in October to 48.4, well below the breakeven point of 50. Other Chinese manufacturing and services reports also pointed to contractions last month. Remember that overnight actions on Dow futures and elsewhere do not necessarily lead to actual trading in the next regular stock market session. Join an IBD expert analyzing viable stocks in a stock market rally in IBD Live Stock Market Rally. The stock market rally was initially driven by the Fed’s rate hikes and dovish policy announcements, but then fell sharply as Powell announced the higher end of the federal funds rate. The Dow Jones Industrial Average fell 1.55% in the stock market on Wednesday. The S&P 500 fell 2.5%. The Nasdaq Composite sold 0ff 3.4%. Small cap Russell 2000 fell 3.3%. The 10-year Treasury yield rose 1 basis point to 4.06%, rebounding from an intraday low of 3.98% right after the Fed meeting. The US dollar also strengthened. U.S. crude oil prices rose 1.8% to $90 a barrel. Natural gas futures surged 9.7%, continuing the daily movement of the week. Among ETF best ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.1% and the Innovator IBD Breakout Opportunities ETF (BOUT) fell 2%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 4.6%. The VanEck Vector Semiconductor ETF (SMH) fell 2.9% and QCOM stock is held by SMH. The SPDR S&P Metals & Mining ETF (XME) fell 6.1% and the Global X US Infrastructure Development ETF (PAVE) fell 3.1%. The US Global Jet ETF (JETS) fell 2.9%. The SPDR S&P Homebuilders ETF (XHB) was down 3.8%. The Energy Select SPDR ETF (XLE) fell 2.4% and the Financial Select SPDR ETF (XLF) fell 1.3%. The Healthcare Select Sector SPDR Fund (XLV) fell 1.7%. Reflecting the more speculative story stock, the ARK Innovation ETF (ARK) fell 4.9% and the ARK Genomics ETF (ARKG) fell 3.4%. China’s Top 5 Stocks to Watch Now Earnings Earnings Albemarle’s earnings soared and easily outperformed, but fell short of the lithium giant’s booming sales. ALB shares were down 4% in overnight trading. Shares fell 4.5% on Wednesday to 266.52, below the 50-day line. Albemarle shares fell partly after Livent (LTHM) sales missed the outlook late Tuesday. According to MarketSmith analysis, the buy point for ALB stock is 308.34. However, a break above Thursday’s high of 287.88 may provide an early entry. CF revenue and revenue are missing. The fertilizer giant announced a $3 billion share buyback, but CF shares fell 7% early on Thursday. Shares of the fertilizer giant fell 4.3% on Wednesday, lowering its 50-day reading to 103.17. The CF stock is at a base with 119.70 buying points. Fortinet’s earnings beat fourth-quarter earnings estimates, with cybersecurity firms up slightly. However, Q3 billing was similar and billing guidance was weak. FTNT shares fell 13% in pre-market action, testing a bearish market low. Shares fell 5.65% to 53.23 on Wednesday after finding resistance once again from the 200-day line on Tuesday. Sarepta reported a larger-than-expected loss and sales failed. SRPT shares were down 3.5% overnight. Shares fell 0.6% on Wednesday at 113.42, holding more than 50 days. Sarepta stock has a default buy point of 120.33. Qualcomm earnings matched, but earnings missed the fiscal Q4 outlook. However, the wireless chip giant has dropped sharply against the current Q1, showing more handset weaknesses. QCOM stock fell 8% in long-term trading. The stock fell 4.1% to 112.50 on Wednesday. Qualcomm shares are out of October’s bear market lows but below the sliding 50-day line. Elf easily surpassed the number of views and ranked #1 in sales. ELF shares soared 11% in a matter of hours, approaching an all-time high. Shares of the cheap cosmetics maker fell 4.7% to 41.66 on Wednesday. While WWE earnings are at their peak, they are slightly off. WWE has closed an investigation into the misconduct of founder and former CEO Vince McMahon. The stock was not active overnight. WWE stock fell 1.5% on Wednesday to 77.54, still in the buy-point range of 75.33 from shallow cup base. Robinhood reported a smaller-than-expected loss, and earnings fell almost entirely. The trading app showed a positive adjusted EBITDA in the third quarter and lowered its guidance on annual operating costs. HOOD stock surged overnight, but gains were largely lost on Thursday morning. The stock fell 4.4% below the buy point of 11.73, bottoming at 11.40 on Wednesday. IBD’s ETF Market Strategies Market Rally Analysis The stock market rally took place on Wednesday. After rallying to session highs with a dovish Fed meeting policy statement, stocks plunged to session lows on Powell’s more hawkish remarks. Investors have been betting that the Fed will cut rate hikes, but they are tacitly expecting a rapid transition from a slower rate to a complete pause. Fed President Powell said the latter is still a long way off. Admittedly, Powell and his Fed colleagues achieved three goals. 1. Slow the rate of interest rate hikes. 2. You still look hard on inflation. 3. Don’t trigger big market rallies that could undermine the fight against inflation. The Nasdaq Composite, which met resistance near the 50-day moving average, fell below the 21-day moving average. In particular, the Nasdaq closed below the lows of the 21st of October. That is a bearish signal. Other major indices did not lower their FTD lows, but they still took damage. The S&P 500 branched below the 50-day moving average and closed below the 21-day moving average. The Dow Jones fell below the 200-period moving average. Small cap Russell 2000, which had approached 200 days, plummeted by nearly 50 days. The current stock market rally has taken a hit. The Nasdaq, which showed an upward trend, is the weakest. Megacap technology and cloud software names are struggling greatly. On the other hand, the Dow Jones Industrial Average was expected to decline. What matters now is how major indices and leading stocks respond. Whipsaw market movement is likely to continue on Thursday. Equity and Treasury yields often have a big second day of Fed meetings, often turning away from their initial moves. Then on Friday, the employment report comes out big. Why This IBD Tool Simplifies Your Top Stock Search What to Do Now There were reasons to be cautious about attending Fed meetings, and it turned out to be justified. Investors may need to reduce their overall exposure, or simply sell some stock to make a profit in their personal name or to reduce their losses. Aside from the Fed’s rate hike plans and the upcoming employment report, we’re in the middle of earnings season. Several stocks that were in or near the buy zone were sold during Wednesday’s performance, including Devon Energy (DVN), Livent (LTHM), ATI (ATI) and Paycom Software (PAYC). Investors can review their holdings to see if they need to reduce other positions due to technical measures, monetization or overall portfolio management. Friday’s employment report could keep the stock market volatile. But this is still a confirmed market rally. Despite Wednesday’s losses, many stocks are still close to buying territory. So, prepare a watchlist and stay engaged. Read the big picture daily to stay in sync with market direction and key stocks and sectors. Follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more. 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