Dow Jones reverses decline ahead of Powell speech; 7 Best Stocks to Buy and Watch

Dow Jones futures were slightly lower in extended trading ahead of Federal Reserve Chairman Jerome Powell’s speech on Tuesday. The Dow Jones Industrial Average rallied as high as 305 points on Monday before pulling back.


Powell speech, inflation data, earnings

Fed Chief Powell will speak at the Sveriges Riksbank International Symposium on Central Bank Independence in Stockholm, Sweden. His speech is scheduled to begin at 9 a.m. ET. Powell’s speech follows Friday’s jobs report which saw wage growth slow much more than expected and workers clocking fewer hours for a second consecutive month. The data should allow the Fed to further slow its pace of raising interest rates.

Consumer inflation data is due out Thursday morning. The CPI is expected to remain unchanged for December and rise 6.6% year-on-year, according to Econoday estimates. According to the CME’s FedWatch tool, traders are placing a 77% chance of a 25 basis point rate hike at the Fed’s next policy meeting in late January/early February.

The 10-year Treasury yield fell to 3.51% on Monday, falling for a second consecutive session.

Jefferies (JEF) reported earnings in line with estimates and sales above forecasts. Jefferies shares lost more than 3% in extended trade.

Other companies reporting later this week include Knowledge base home (KBH), Semiconductor manufacturing in Taiwan (TSM), Bank of America (BAC), Citigroup (This Wells Fargo (WFC). Dow Jones Stocks JPMorgan Chase (JPM) and UnitedHealth Group (UNH) will also report this week.

stock market today

On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.1%. The tech-heavy Nasdaq composite rose 0.6%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.65% and the SPDR S&P 500 (SPY) fell slightly.

Electric vehicle giant You’re here (TSLA) rose 5.9% on Monday. Among Dow Jones stocks, Apple (AAPL) gained 0.4% and Microsoft (MSFT) rose 1% in the current stock market.

Deere (DE), IBD Ranking Action elf beauty (ELF), Rio Tinto (RIO) and IBD SwingTrader Stocks super microcomputer (SMCI) – as well as Dow Jones names caterpillar (CAT), Chevron (CLC) and walmart (WMT) – are among the best stocks to buy and watch as the market returns to rally mode.

ELF Beauty is an IBD ranking stock. Super Micro is a new IBD SwingTrader idea. Caterpillar and Rio were featured in this week’s recent Stocks Near A Buy Zone column.

4 most important growth stocks to buy and watch in the currentrStock market rally

Dow Jones Futures Today: Oil Price

Before Tuesday’s opening bell, Dow Jones futures were trading 0.3% below fair value and S&P 500 futures were down 0.35%. Tech-heavy Nasdaq 100 futures fell 0.4% from fair value. Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.

US oil prices rose more than 1% on Monday, rebounding a bit from last week’s steep losses. West Texas Intermediate futures were trading just below $75 a barrel.

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What to do in the new stock market rally

Now is an important time to read IBD’s The Big Picture column with the stock trend back in a “confirmed uptrend” after Friday’s strong gains in big volume, a stark divergence from recent action .

Friday’s positive high-volume action tipped the IBD market’s outlook for a fresh stock rally. Nevertheless, it is still an uncertain environment, and exposure should be increased in a measured way. Investors should stick to 20-40% exposure for now.

(Check out IBD stock listings like the IBD 50 and stocks near a buy zone, for additional stock ideas.)

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones Stocks to Buy and Watch: Caterpillar, Chevron, Walmart

Dow Jones member Caterpillar remains squarely in the buy range above the buy point of 239.95 on a flat basis after Monday’s 0.9% decline, according to IBD MarketSmith pattern recognition. The buy zone rises to 251.95. On the upside, the stock’s relative strength line, a key technical indicator, hits new highs.

The CAT stock is posting a solid 98 out of a perfect IBD composite score of 99, according to the IBD stock balance sheet. The composite rating is designed to help investors easily find the highest growth stocks.

Energy giant Chevron has again found strong resistance at its 50-day line, as it continues to build a cup base that has a buy point of 189.78.

Discount retailer Walmart reversed a 1.25% decline on Monday, falling back below its 50-day line. The stock is building a cup with a handle that has a buy point of 154.74 and is about 6% away from the last entry.

Top stocks to buy and watch: Deere, ELF Beauty, Rio, Super Micro

Recent IBD stock of the day Deere is building a flat base with a buy point of 448.50. Stocks are approaching their latest buy point, rising 0.4% on Monday.

IBD Leaderboard ELF Beauty stock dropped its fixed-base entry of 57.03 amid Monday’s 3.9% decline. Shares broke out in heavy volume on Friday, indicating strong institutional demand for the cosmetics leader. The 5% buy zone peaks at 59.88 if the stock is able to regain entry.

Rio Tinto’s recent IBD stock of the day pared gains to just 0.1% on Monday, breaking another cup with the handle’s 73.45 buy point. The buy zone extends up to 77.13.

IBD SwingTrader Super Micro Computer stock is rising rapidly on the right side of a short consolidation that has a buy point of 95.32. Shares pared their gains to 0.45% on Monday.

Stocks to buy and watch in the new stock market rally

These are the top seven stocks to buy and watch in today’s stock market, including three leaders from the Dow Jones.

Company Name Symbol Correct point of purchase Basic type
Deere (OF) 448.50 Flat bottom
elf beauty (ELF) 57.03 Flat bottom
Rio Tinto (RIO) 73.45 Mug with handle
super microcomputer (SMCI) 95.32 Consolidation
caterpillar (CAT) 239.95 Flat bottom
Chevron (CLC) 189.78 cup bottom
walmart (WMT) 154.74 Mug with handle
Source: IBD data as of January 9, 2023

Join IBD experts as they analyze the top stocks of the current stock market rally on IBD Live

Tesla Stock

Tesla stock jumped nearly 6% on Monday, adding to Friday’s bullish reversal. Stocks remain significantly below their 50 and 200 day lines.

Last week, shares hit a 52-week low at 101.81. Tesla stock closed Monday about 68% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares climbed 0.4% on Monday. Last week, the stock hit a new 52-week low at 124.17. The stock remains around 20% off its 52-week high.

Microsoft stock rebounded 1% on Monday, adding to Friday’s gains. The software giant is around 30% off its 52-week high and is still just off its 52-week low of 213.43, hit on November 4.


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