Dow Jones Futures Signals Market Rally Retreat Amid Hedge Fund Fallout; Tesla, Nio Story Time Over Investor’s Business Daily – Investor’s Business Daily
Dow Jones futures fell slightly Monday, along with S&P 500 futures and Nasdaq futures, amid an ongoing massive hedge fund margin call. Meanwhile, the Suez Canal took a step toward reopening the vital shipping lane.
The bifurcated stock market rally had a wild week, but finished on a strong note. It remains a challenging environment, with enough positive action to entice investors but volatile enough to toss them out. With the indexes strengthening late last week and several quality names breaking out or flashing bullish signals from a variety of sectors, the overall stock market rally appeared to be improving, tentatively.
The chip-equipment group is one of the hottest right now, with ASML (ASML), Lam Research (LRCX), Entegris (ENTG), KLA Corp. (KLAC) and MKS Instruments (MKSI) are actionable right now. The already-strong group got a big boost last week when Intel (INTC) announced it would spend $20 billion on two new chip plants in Arizona. Intel stock spiked to a 20-year high, plunged to its 10-week line before rebounding for a modest gain.
The biggest unknown is the stock market rally. If it continues to move higher, then ASML stock and other chip-gear plays stand a good chance of working. But if the stock market resumes choppy action or steady selling, expect more difficult times. This is why it’s so important to be in a healthy, sustained market rally. Stocks looked better late in the week, but is this yet another head fake. Meanwhile, the Nasdaq continues to live below key levels.
One area of the market remains on intensive care: speculative or richly valued growth stocks.
That includes EV stocks such as Tesla (TSLA), Nio (NIO), Xpeng (XPEV) and Li Auto (LI). But it also includes Teladoc Health (TDOC), Roku (ROKU), Baidu (BIDU), Palantir Technologies (PLTR) and many more. From Tesla stock on down, these stocks are well below their 50-day lines. Roku, Baidu and Palantir stock are trading at 2021 lows.