After hot inflation, stocks fall ready for ‘everything’

Dow Jones’ futures fell slightly overnight with the S&P 500 futures and Nassak’s futures. The stock market rally has seen a lot of losses, but investors have tried to weigh the implications of the latest inflation report and the Federal Reserve has become more aggressive with rate hikes. Treasury production sent a sharp signal of failure.




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JPMorgan Chase (JPM) and Morgan Stanley MS will launch its second quarter earnings report early Thursday. Taiwan semiconductor TSM revenues provide insights into chip makers. JPM stock, Morgan Stanley and Taiwan Semi are in high trend.

Lee Auto (LI) returned to power on Wednesday, but the EV giants Tesla (TSLA) and BD (BYDDF) Try to get support at key stages. Shockwave Medical (SWAV), Astrazeneka (AZN) and McKennon (MKK) has shown constructive action near purchase points. Olaplex (OLPX) The 2021 IPO has sold positively for the majority of this year.

LI stock was added to SwingTrader on Wednesday. Li Auto, AstraZeneca and MCK are on the IBD 50. Li Auto was the IBD stock of the day.

Inflation Report

CPI inflation rose from 9.6 percent in May to 9.1% in June, the new 40-year high and above for 8.8%. Food and energy inflation fell from 6 percent to 5.9 percent.

Crude oil and gasoline prices have been falling sharply since mid-June, and CPI inflation is likely to slow down in July. But June’s broad-based inflation is a sign of long-term inflation.

Capital prices rose by 0.7% in May, accelerating the profit for the third straight month, sequentially and incompletely. A year ago, the cost of service, except for energy, increased by 5.5%.

Fed Rate Hike Outlook

As a result, the CME FedWatch Tool now has a 78% chance of a 100-base-point Fed rate increase by 8% on Tuesday at the end of the July 26-27 meeting. Prior to Tuesday’s inflation report, markets were locked at 75-point.

CPI inflation report raises full-time walking chances, but raises Atlanta Federation President Rafael Bosst. “Everything is in the game,” Bostick said Wednesday, adding that “everything” includes a 100-point-point movement.

“We don’t have to make that decision today,” Florette Mister, president of the Cleveland Federation, told Bloomberg about the percentage increase. But she emphasized that the CPI report was “usually bad.”

For September, markets see a 75-base point increase likely to shift from 50 base points before the CPI inflation report.

At the bottom line, markets appear to be gaining ground against 125 basis points in the next two sessions with 175 price increases ahead of inflation data.

Interestingly, the Bank of Canada raised interest rates by more than 100 points on Wednesday.

Dow Jones Futures Today

Dow Jones’ futures fell 0.4% to real value. The S&P 500 futures are down 0.5 percent. Nasdaq’s 100 futures are down 0.6 percent.

At 8 a.m. ET, the Department of Labor will release the June Manufacturing Price Index and Weekly Unemployment Inquiries. Does PPI show any signs of a slowdown in mass inflation? Unemployment claims remain low, but the labor market should continue to slow down.

Remember that overnight action will not be translated into real trading by the Dow in the future and elsewhere in the next regular stock market session.


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Stock Market Rally

The stock market rally was sold out on Wednesday morning by the inflation report, and rebounded several times in the afternoon before disappearing.

Dow Jones Industrial Average fell 0.7% on Wednesday. The S&P 500 index is down 0.45 percent. Nasdaq composition decreased by 0.15 percent. Small Cap Russell 2000 decreased by 0.1%.

US crude oil prices rose 0.5% to $ 96.30. Gasoline futures are down to about 1%, and prices at the pump may continue to slide at least in the short term.

Treasury profits

The 10-year treasury output decreased 5 base points to 2.9% after a short period of up to 3.05% on CPI data. Meanwhile, the two-year production base has grown by 11 points to 3.15 percent. One-year treasury production increased by 12 points to 3.2 percent.

The product curve has now been reversed from 1-year to 10-year, and the 2-year-to-10-year reversal has been very sharp since 2000. The 6-month rate (from 18 to 2.95%) is now. More than 10-year production volume.

All of this treasury action is a sign of growing economic downturn.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1 cents to 26.53, while the IBD Breakout Opportunities ETF (BOUT) fell 0.2%. IShares Expanded Tech-Software Sector ETF (IGV) decreased by 1%, extending its weekly loss to 6.2%. VanEck Vectors Semiconductor ETF (SMH) gained 0.8%.

The ARK Innovation ETF (ARKK) increased by 0.7% and the ARK Genomics ETF (ARKG) by 1.1%, reflecting more historical stocks. Tesla shares are one of the largest holdings in Arc Invest EFF. Kathy Wood’s co-owner owns some of BYD’s shares.

SPDR S&P Metals & Mining ETF gained 2.2 percent while Global X US Infrastructure Development ETF (PAVE) declined 0.5%. US Global Jets ETF (JETS) fell 0.8%. SPDR S&P Homebuilders ETF (XHB) rose 0.2 percent. Energy Choice SPDR ETF (XLE) lost 0.2% and Financial SPDR ETF (XLF) lost 0.5%. Healthcare Select Sector SPDR Fund (XLV) decreased by 1%, with MTK shares in ETF.


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Lee Auto Stoke

Lee Automobile shares rose 2.8% to 38.03, rebounding above the 21-day moving average and posting strong returns. After more than doubling from early May to the end of June, LI stocks strengthened. Ideally, the Chinese hybrid SUV maker will create a new foundation, closing the 50-day gap. Investors may see the current move as a precautionary measure towards the end of 2020.

Meanwhile, Tesla stocks rose 1.7% to 711.12, upside. TSLA shares returned 21-day moving average. Shares are standing near their 50-day line. Tesla shares returned that key level on Friday, but are down on Monday.

TSLA shares fell 1% late Wednesday. Tesla AI chief executive Andrei Carpathi tweeted that he had left the EV giant. Carpathi was on a Sabbath that lasted for months, and he was about to leave.

BYD shares rose 0.9% to 34.80 on Wednesday, gaining support at the 200-day line. Warren Buffett’s stock fell 11 percent on Tuesday on China’s EV and giant battery. Berkshire Hathaway (BRKB) may be selling some or all of BYD’s largest share. Investors need some transparency. But the BYD collection must create a new foundation.


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Shares near Purchasing Points

Shakewave Medical Shares rose 0.4% to 195.93 to 186. SWAV stock may have been in operation since July 8, but it will take two more days for this to happen. That coincides with the downtrend from November 2021 and April to July 8. The relative strength line, the blue line in the charts, is reaching an all-time high, even with the SWAV stockpile. .

AstraZeneca shares fell 0.6% to 66.30, but rebounded from a 21-day moving average. AZN stock is operating on a double-digit basis at 67.50 buy points. UK giants have crossed that threshold three times in recent weeks, but have never closed in the shopping area.

MCK shares fell 0.7% to 325.18, growing within another 50-day test. McKenson shares have a buy rating of 340.04 from the flat, but investors will be able to use 335.67 higher on Monday, as a small early entry.

Olympus rose 6.6% to 15.31, returning above the 21-day and 50-day lines. Rates for OLPX were below average, but better than the last few days. Shares are trading at a low of 17.47 from the lower end. Olympus shares closed more than a short-term trend on Wednesday. With the approach of the 50-day line, that can provide a powerful input.

The top hair care product maker officially released 21 shares in September 2021, a record 30.41 before the end of the year. But the OLPX split quickly narrowed, with shares falling on May 10 to 11.73. Revenue growth and estimates continued to be strong, with the OLPX stock price-to-share ratio falling to 32 at one point.

Market Rally Analysis

The stock market rally was held on a relatively good Wednesday, taking into account fresh inflation, the “everything” Fed and signs of a sharp economic downturn.

The major indexes came in well in the morning. The technicians have paved the way, probably growing at the lowest 10-year treasury production. But long-term production is expected to slow the federation, which is expected to lead to a recession. That’s not really good news.

The major indexes are still below the 21-day line. The 10-week line remains a major obstacle, and Nasdak will be down this week.

Markets, like the economy, are volatile. Major indexes may return to low or re-test or extend the 10-week line again. You can also move sideways in long-distance fashion. That will allow the markets to be more transparent in terms of economic and federal growth, but many foundations can be created. But in the short term, stocks can become very fragmented, attracting investors and pulling them out.

The medical sector is still a clear leader, with many stocks and groups showing positive action.


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What to do now

The market line is still hanging, but it is under pressure. There has been no direction in the last few weeks, but the long-term trend is negative.

In the coming weeks, a new wave of uncertainty and fluctuations is expected to increase significantly.

It’s not a good time to increase exposure. A few collections, mostly by medical professionals, are showing positive steps, but even they can have some great daily activities. So consider getting at least a fraction of the profits fast. Don’t buy extensions and don’t invest too much on a specific topic or topic.

Stay tuned and be prepared. Keep working on those tracking lists by managing stocks and showing relative strength.

Read The Big Picture daily to keep up with market trends and leading stocks and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.

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