Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, as Credit Suisse said it would borrow nearly $54 billion from the Swiss National Bank, alleviating contagion fears.
An attempted rally in the stock market saw another wild session on Wednesday, with major indices initially falling but coming off their lows, with the Nasdaq making gains. Concerns about the Swiss giant Credit Suisse (C.S) led to another wave of selling in bank stocks, including well-capitalized global giants such as c. B. Morgan Chase (JPM).
Treasury yields, especially the two-year yield, fell, but they also pulled back from their lows. Unfortunately, trading in treasuries, among the deepest and safest markets in the world, is experiencing a downturn in liquidity.
Crude oil fell to a 15-month low as copper also slipped, as investors feared that problems with banks and financial markets would spill over into the broader economy.
Microsoft (MSFT), apple (AAPL), advanced micro devices (AMD), Meta platforms (meta), Salesforce.com (CRM) And nvidia (NVDA) show strength or even increase gains. AMD, Meta and CRM stocks are hovering above buy points. Microsoft and Apple stocks are heading towards the official buy points, where MSFT is arguably doable. Nvidia stock, among the strongest performers in 2023, is currently extended.
Nvidia stock and Meta Platforms running IBD Leaderboard. META stock is on SwingTrader. MSFT stock is listed on the IBD Long-Term Leaders List. CRM inventory is in defect 50with Salesforce picking a stock Wednesday of IBD 50 to watch the selection.
The video embedded in the article discussed Wednesday’s market action and analyzed AMD, Salesforce, and Duolingo (DUOL).
software giant Adobe (ADBE) and a teen-focused discount five below (five) reported after closing.
ADBE stock rose 5% in late trading as Adobe slightly topped its first-quarter financial views and raised its full-year guidance. Shares closed up 0.1% at 333.61 on Wednesday, trading below the 50-day and 200-day lines.
FIVE stock fell 3% overnight as Five Under earnings balanced but guidance was light. Shares rose 0.2% to 198.17, holding support at the 50-day line after an orderly decline.
Dow jones futures today
Dow Jones futures rose 0.3% against fair value, turning higher on Credit Suisse tapping into SNB funds. S&P 500 futures rose 0.4%. Nasdaq 100 futures rose 0.4%.
The 10-year Treasury yield rose 2 basis points to 3.51%, erasing losses in Credit Suisse’s borrowing news.
Crude oil futures rose slightly.
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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Attempt to rally the stock market on Wednesday
The stock market rally suffered sharp losses at the start of the session, but rallied to close mixed, just barely.
The Dow Jones Industrial Average fell 0.9% in stock market trading on Wednesday. The S&P 500 fell 0.7%. The Nasdaq Composite Index rose less than 0.1%. Small cap Russell 2000 fell 1.7%.
Credit Suisse sold on Wednesday after its biggest shareholder, Saudi National Bank, ruled out investing more money in the ailing Swiss giant. This led to a sharp decline in banking in Europe and around the world.
CS stock, which has been struggling for years, hit a record low of 1.75 for the day. The shares closed down 14%, at 2.16.
The Swiss National Bank said shortly before the US markets closed that it would provide liquidity to Credit Suisse. On Wednesday evening, Credit Suisse moved to borrow up to 50 billion Swiss francs ($53.7 billion) from the Swiss National Bank.
In the US, JPM stock, Wells Fargo (WFC), American bank (Buck) And Citigroup (c) All of which have eased slightly from last week’s lows. JPM stock fell 4.7%, approaching the 200-day line, hitting a 2023 low along with Citigroup. WFC stock hit an eight-month low while Bank of America stock fell to its worst level since late 2020.
Regional banks were mixed. First Republic Bank (FRC) fell 21% as S&P Global downgraded its credit rating by four notches to junk status. But some top regional and regional banks stepped forward, incl Western Alliance Bancorp (WAL).
SPDR Financial Selection Fund (XLF) fell 2.7%, with JPMorgan, Citigroup, Wells Fargo and BAC all the big holdings. SPDR S&P Regional Banking ETF (KRE) fell 1.6%. FRC stock and Western Alliance are among the many components.
Bloomberg reported Wednesday evening, citing sources, that First Republic is exploring options, including a possible sale. FRC stock jumped more than 8%.
US crude oil futures fell 5.2 percent to $67.61 a barrel, the lowest price in 15 months. Copper prices fell 3.8 percent, their worst close since January 5.
The 10-year Treasury yield fell 14 basis points, to 3.49%. On the day, the return was 3.39%, not far from the February 2 low of 3.33%. The 2-year Treasury yield fell 25 basis points to 3.97%, after falling as low as 3.72% on the day. A week ago, just before the SVB financial crisis hit, the 10-year yield was 3.97% while the 2-year yield was 5.06%.
Banking concerns and Fed rate shifts are pushing Treasury yields lower. Weaker economic data on retail sales, producer prices and the Empire State Manufacturing Index released by the Federal Reserve Bank of New York also added to the cooldown.
Despite a decline in Treasury yields, the dollar jumped amid a global safe-haven rush on Credit Suisse concerns. The dollar is approaching recent highs.
Chances of a Fed rate hike
A week ago, markets were betting on a 50 basis point rate hike on March 22, followed by at least two rate hikes of a quarter point.
But after Wednesday, investors see a 50-50 chance that the Fed will pause next week. They see a quarter-point rise by the end of the May meeting. But then markets expect several rate cuts, including a 50-point move in June.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) decreased by 1.8%. iShares Expanded Technology and Software ETF (IGV) fell 0.2%, with major IGV shares owned by Microsoft and CRM, along with Adobe. VanEck Vectors Semiconductor Corporation (SMH) lost 1.1%. NVDA and AMD stocks are SMH’s main holdings.
SPDR S&P Metals & Mining ETFs (XME(down by 5.9% and the Global Infrastructure Development Fund (ETF) in the USA)cradle) fell by 4%. US Global Gates Foundation ETF (Planes) fell 4.3%. SPDR S&P Homebuilders ETF (XHB) step down 2.2%. Energy Defined Fund SPDR ETF (xle) 5.4%. SPDR Health Care Sector Selection Fund (XLV) decreased by 0.1%
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(up 0.8% and the ARK Genomics ETF)ARKG) increased by 0.1%.
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Tech giants are showing strength
Apple shares rose 0.3% to 152.99. The iPhone giant has 157.48 points long from a flat base formed above the 200-day line. The RSI line is at a four-month high, reflecting an outperformance for AAPL stock against the S&P 500.
MSFT stock rose 1.8% to 265.44. The Dow Jones giant is building the right side of a short consolidation that formed above the 50-day and 200-day lines. Microsoft stock is on track for a flat base with 276.86 buy points after Friday’s close. In a better market, MSFT stock would actually be viable, either as an early entry or as a long-term leader.
CRM stock rose 1 cent at 182.91, holding a range of 178.94 cups with a buy point handle.
AMD stock rose 2.55% to 89.68, after jumping 6.6% on Tuesday. Shares are just under 89.04 flat buy points, according to MarketSmith analysis.
META shares jumped 1.9%, to 197.75. Facebook parent cleared 197.26 flat longs, after some early entries topped with Tuesday’s rally of 7.25%.
Nvidia stock jumped 0.7%, to 242.28. The chip giant is holding its best level in 11 months, but is extended from its recent buying points. Ideally, NVDA stock would consolidate for a few more weeks, creating a new base and allowing the fast-rising 50-day to catch up.
Market rally analysis
The stock market rally attempt saw another spirited session, but closed near the session highs.
The Nasdaq, which was down 1.7% on the day, managed to rally at the close, holding the 50-day and 200-day lines. The Nasdaq 100, which includes the 100 largest non-financial components of the Nasdaq index such as Microsoft, Apple, Nvidia, Meta and AMD, rose 0.5%.
The S&P 500 fell below Wednesday’s low, but held above Tuesday’s low, so its attempt to rally remains intact.
The Dow simply snapped Monday’s low, which led to it attempting to rally and reaching its worst level since October. The Russell 2000, which is full of small bank stocks, fell to its worst level since the end of 2022.
Technically, investors could start looking for a follow-up day in the Nasdaq to confirm the new rally. The FTD will almost certainly push the Nasdaq 100, and possibly the Nasdaq Composite, above the trend line from its early February highs.
But other indexes have a lot more work to do. How sustainable will the tech-led rally be if banks, commodity firms and industrial firms sell off?
To put it mildly, a potential global financial crisis is much more important than whether, say, a jobs report is very strong or weak. So even slight shifts in positive or negative sentiment can lead to massive swings in the market. Also, the huge volatility in a market, such as treasuries, will spread across stocks, commodities, and currencies.
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What are you doing now
Investing is challenging enough in a clear bull market. Attempting to make a volatile market correction amid an emerging financial crisis greatly increases risk.
Yes, Meta stock, Salesforce, AMD, and Microsoft are technically doable with Apple shutting down. A number of other technologies are showing upward movement. But if this market goes down, it will demolish everything.
At the very least, wait a day to continue. This is likely to trigger a number of buy signals. But investors should remain wary even in this scenario. There is a significant risk that other large banks or major market addresses will trigger a sudden sell-off.
Meanwhile, build your watchlists. Look for stocks with strong relative strength, especially those close to overbought points but also blue chips like Nvidia stock.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
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