Dow Jones futures were higher ahead of Tuesday’s open and the U.S. election results. Key inflation data, including the Consumer Price Index, is due out later in the week.
Republicans almost certainly will retake the House of Representatives in Tuesday’s midterm elections. They appear to have the edge in winning the Senate, though that is less clear. Democrats currently have a slim majority in the House, with Vice President Kamala Harris holding the tiebreaking vote in the 50-50 Senate.
Due out Thursday, the Consumer Price Index is expected to rise 0.7% in October vs. the previous month. Consumer inflation is expected to surge 8% year over year.
Diamondback Energy (FANG), Lyft (LYFT), Mosaic (MOS) and Shockwave Medical (SWAV) were key earnings reporters late Monday.
FANG stock traded a fraction lower in extended trade, while Lyft shares dived more than 16%. Mosaic shares inched higher. And Shockwave shares lost more than 5%.
Stock Market Today
On Monday, the Dow Jones Industrial Average advanced 1.3%, or more than 400 points, and the S&P 500 gained 1%. The tech-heavy Nasdaq composite climbed 0.85%.
Among exchange traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved up 1.1% and SPDR S&P 500 (SPY) rose 0.9%.
EV giant Tesla (TSLA) skidded 5% Monday. Among Dow Jones stocks, Apple (AAPL) traded up 0.4% and Microsoft (MSFT) jumped 2.9% in today’s stock market.
Among the top stocks to buy and watch, Albemarle (ALB), IBD Leaderboard watchlist stock Arista Networks (ANET), CF Industries (CF) and New Fortress Energy (NFE) — as well as Dow Jones names Merck (MRK) and UnitedHealth Group (UNH) — are among the top stocks to buy and watch.
Arista Networks is an IBD Leaderboard watchlist stock. Albemarle was featured in this week’s Stocks Near A Buy Zone column, along with three other top stock ideas.
Dow Jones Futures Today: Treasury Yields, Oil Prices
Ahead of Tuesday’s opening bell, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were little changed vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
The 10-year Treasury yield ticked higher to 4.21% Monday, extending a win streak to four sessions and closing at its highest level since Oct. 24. Meanwhile, U.S. oil prices fell almost 1% as West Texas Intermediate futures traded near $92 a barrel. Last week, WTI futures hit their highest point since mid-October.
Q3 Earnings Season
Third-quarter earnings season continues this week, with more key reports coming from Disney (DIS), DoubleVerify (DV), D.R. Horton (DHI), Occidental (OXY) and Roblox (RBLX).
Earnings reports cause many of the biggest moves in stocks, and they require special focus. Strong earnings can fuel top stocks above new buy points and into buy zones, while a less-than-impressive announcement can send shares tumbling below key support levels.
The stock market’s reaction to an earnings release can often tell you more than the earnings themselves. If the results seem strong but the stock slides anyway, investors may be concerned about the sustainability of growth, rising costs or other potential negatives.
With the market in rally mode, investors should be tracking companies that handily beat earnings results and have strong upside reactions. These stocks could be among the new leaders if the market is able to rebound from its recent losses.
What To Do In The Struggling Stock Market Rally
Now is an important time to read IBD’s The Big Picture column after the stock market trend transition from a “confirmed uptrend” into an “uptrend under pressure.”
At this point, investors should be playing defense; don’t let profitable trades turn negative. As The Big Picture reiterated last week, it makes sense to keep exposure at or below 20% until the uptrend resumes.
But it’s not time to step away completely. The uptrend is still intact, so investors can still buy breakouts but should focus on stocks with top-notch fundamental and technical metrics.
Dow Jones Stocks To Watch: Merck, UnitedHealth
Dow Jones member and IBD 50 stock Merck is out of buy range past a double bottom’s 93.12 buy point. The 5% buy range went up to 97.78.
Health care giant UnitedHealth continues to eye a cup with handle’s 553.23 buy point, according to IBD MarketSmith, following last week’s breakout attempt. Shares rallied 1.3% Monday, closing about 1% below the stock’s latest entry.
Top Stocks To Buy And Watch: Albemarle, Arista, CF, New Fortress
Lithium producer Albemarle is building the right side of a cup base that has a 308.34 buy point. Shares rose 0.5% Monday, extending a win streak to three sessions.
IBD Leaderboard watchlist stock Arista Networks is trying to break out past a choppy base’s 132.97 buy point. Shares fell 0.4% Monday.
CF Industries is trying to find support around its 50-day moving average amid Monday’s 1% loss. Shares are building a cup base that has a 119.70 buy point, according to IBD MarketSmith pattern recognition.
New Fortress Energy is rapidly approaching a cup base’s 63.16 buy point. With the stock about 6% away from new highs, keep an eye out for a handle to offer an earlier entry. The energy leader reported results late Monday, sparking a 1.5% gain on the day.
Tesla Stock
Tesla stock skidded 5% Monday, hitting a new 52-week low and reaching its lowest level since June 2021.
Shares are more than 50% off their 52-week high and sharply below their 50- and 200-day moving average lines.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 0.4% Monday despite the company warning it has reduced iPhone 14 production due to Covid-19 restrictions in China. Apple stock ended a five-day losing streak but is still about 24% off its 52-week high.
Microsoft jumped 2.9% Monday, continuing its rebound from Friday’s 52-week low. The software giant remains about 35% off its 52-week high.
