Dow Jones futures rose modestly Wednesday morning, along with S&P 500 futures and Nasdaq futures, as Treasury yields dipped amid key inflation data and earnings before the open. The stock market rally attempt had yet another weak close, finishing with slim losses Tuesday.
Apple stock retreated overnight on a report that chip shortages will force iPhone production cuts. Crispr Therapeutics (CRSP) retreated on study results. JPMorgan Chase (JPM) reported better-than-expected third-quarter EPS before the open. Delta Air Lines (DAL) also topped views early Wednesday.
Apple iPhone Production Cut
Apple (AAPL) will have to cut 2021 iPhone production goals of 90 million handsets by up to 10 million handsets due to extended chip shortages, Bloomberg News reported, citing sources. The Dow Jones tech titan reportedly is telling manufacturers that Broadcom (AVGO) and Texas Instruments (TXN) aren’t delivering enough components.
Apple stock fell less than 1% in premarket action, with the iPhone production report perhaps not too big of a surprise. Shares are working toward recent lows. AAPL stock closed down 0.9% to 141.51 after the tech giant announced an Oct. 18 product event, expected to include a big revamp of the MacBook Pro.
One exception was QCOM stock, which rose 2% early Wednesday. Qualcomm (QCOM) announced a $10 billion QCOM stock buyback program late Tuesday.
Crispr Stock Singed
CRSP stock slumped 8% in premarket trade despite generally positive hase 1 test results of a gene-edited cancer drug. Crispr Therapeutics said Tuesday it’s planning to begin a pivotal study of its gene-edited cancer drug, CTX 110. Of the 26 lymphoma patients, 38% had no detectable cancer following the treatment. There were no major side effects.
On the plus side, German software giant SAP (SAP) gave preliminary Q3 results above consensus and guided higher for the full year. SAP stock popped 5% early Wednesday.
Mixed Market Messages
But a number of high-beta growth names such as Tesla stock, Upstart Holdings (UPST), Zscaler (ZS) and Airbnb (ABNB) made strong moves, flashing various buy signals during Tuesday’s session. Solar stocks continued to rebound while U.S.-focused casino plays such as MGM Resorts (MGM) and Boyd Gaming (BYD) also rallied, triggering buy signs. Tesla (TSLA) rivals General Motors (GM) and Ford (F) continued to advance, with GM stock clearing an early entry and Ford nearing the top of a base. Matson (MATX) blasted above a short consolidation.
The video embedded in this article discussed Wednesday’s market action and analyzed ZS stock, Matson and Boyd Gaming.
Dow Jones Futures Today
Dow Jones futures climbed 0.1% vs. fair value. S&P 500 futures gained 0.2%. Nasdaq 100 futures rose 0.5%. Apple stock is a Dow Jones, S&P 500 and Nasdaq component.
The 10-year Treasury yield fell 2 basis points to 1.56%. Crude oil prices declined about 1% while copper futures rose more than 1%.
The Port of Los Angeles is moving to operate 24 hours a day, seven days a week to try to alleviate massive backlogs of container ships. China reported stronger-than-expected September export growth overnight.
The September consumer price index is due out at 8:30 a.m. ET. Economists expect overall consumer inflation holding at 5.3%, with core inflation staying at 4%. At 2 p.m. ET on Wednesday, Fed minutes from the September policy meeting will be released, offering further insight.
Atlanta Fed President Raphael Bostic, one of the more hawkish Fed officials, said Tuesday that U.S. inflation is broadening and not just transitory. Fed Vice Chairman Richard Clarida said the “risks to inflation are to the upside.” He also added that conditions for starting a bond taper have “all but been met.”
Stock Market Rally
The stock market rally attempt wavered between modest gains or losses for most of Tuesday’s session before closing on a sour note.
The Dow Jones Industrial Average dipped 0.3% in Tuesday’s stock market trading. The S&P 500 index fell 0.2%. The Nasdaq composite edged down 0.1%. The small-cap Russell 2000 climbed 0.6%.
The 10-year Treasury yield fell 3 basis points to 1.58%, after bond markets were closed on Monday. The 10-year yield has surged for several weeks.
Google parent Alphabet (GOOGL) sank 1.8% on Tuesday, retreating from its 50-day moving average and weighing on the S&P 500 and Nasdaq. Memory-chip giant Micron Technology (MU) slumped 3.6% on another grim memory price forecast from TrendForce. Several memory-exposed chip-equipment makers, including Applied Materials (AMAT), KLA Corp. (KLAC) and Lam Research (LRCX) edged lower.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) gained 1.65%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 1.1%.
The VanEck Vectors Semiconductor ETF (SMH) sank 1%. Micron stock was a notable drag on SMH.
SPDR S&P Metals & Mining ETF (XME) edged up 0.25% and Global X U.S. Infrastructure Development ETF (PAVE) finished just above break-even. U.S. Global Jets ETF (JETS) ascended 0.8%. SPDR S&P Homebuilders ETF (XHB) ended essentially flat. The Energy Select SPDR ETF (XLE) nudged 0.1% higher and the Financial Select SPDR ETF (XLF) gave up 0.3%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.4% and ARK Genomics ETF (ARKG) climbed 2%. Both are close to multimonth lows. Tesla stock is the largest holding across ARK Invest’s ETFs.
JPMorgan earnings topped views on the top and bottom line. JPM stock gained a fraction.
On Tuesday, JPMorgan stock pulled back toward a buy point as the broader market and Treasury yields retreated. Bank of America (BAC), on tap Thursday, is just in buy range. Wells Fargo (WFC), Goldman Sachs (GS), Morgan Stanley (MS) and Citigroup (C) are all in consolidations.
Delta earnings also topped views early Wednesday. It sees continued revenue improvement in Q4, but higher fuel costs will pressure profitability. Other carriers will follow in the next few weeks, though several, including American Airlines (AAL), have already given some preliminary guidance.
DAL stock fell 1% before the open.
Delta stock, American and several other big airlines are trying to find support around their 200-day lines.
More broadly, Delta earnings provides an early read for the travel sector, including hotels, casinos such as MGM and “tech” travel names such as Expedia (EXPE) and ABNB stock. With Covid cases falling sharply and restrictions starting to fade, travel should have a tailwind.
Stocks Flashing Buy Signals
Tesla stock rose 1.7% to 805.72 on strong China EV sales for September. The EV giant backed off intraday highs but closed above the 800 level for the first time in eight months. TSLA stock is now slightly extended from a 764.55 handle buy point. Intraday it cleared a three-weeks-tight entry of 807.07. But with Tesla stock up for seven straight weeks and on track for an eighth, it appears somewhat extended.
UPST stock vaulted 7.1% to 333.05, rebounding from its 21-day line and a short downtrend. Volume was below average though. Upstart stock has been a huge winner in the past few months and held up well, but a 21-day rebound in a market correction is high risk. After Tuesday’s big move, UPST stock seems extended even from that perspective.
Zscaler stock climbed 3.7% to 277.72, rebounding from near its 50-day line and breaking a trend line. ZS stock doesn’t look extended yet, and should have a new base after this week. The relative strength line is already at a…