Dow Jones futures rose strongly Friday morning, along with S&P 500 futures and Nasdaq futures, jumping as Russian President Vladimir Putin reported some "certain positive shifts" in Ukraine talks. But futures slowly pared some of those gains.
Putin's comments came in a meeting with his Belarusian counterpart Alexander Lukashenko, adding that talks continued "practically on a daily basis." But they come after high-level Russia-Ukraine talks appeared to go nowhere on Thursday. Russia has eased some of its demands as its Ukraine invasion has been much tougher than Putin expected, while sanctions vs. Russia are already taking a toll.
Meanwhile, Russia's Ukraine invasion continues. Russian forces are still losing a lot of troops and equipment. It continues to shell and bomb Ukrainian cities, causing heavy civilian casualties. That shelling is now targeting some western cities largely spared up to now. Russian claims of Ukrainian research into dirty nuclear bombs and bioweapons raise concerns that Putin may attempt a false flag operation in Ukraine or Russia.
The stock market rally attempt closed well off lows Thursday, holding the bulk of Wednesday's big gains. Crude oil prices reversed lower while Treasury yields continued to rebound with inflation at a 40-year high.
Key Earnings
Tesla rival Rivian reported weaker-than-expected fourth-quarter earnings results. The EV pickup maker reported a big loss and slim revenue, while warning that supply-chain woes will "persist."
RIVN stock sold off hard overnight after skidding to a record low in Thursday's session. As for Tesla stock, shares fell from key resistance and back below its 200-day line.
Oracle missed earnings views, while the software giant's revenue was in line. Oracle stock fell slightly early Friday.
DocuSign met on EPS and beat on sales, but its fiscal 2023 revenue guidance fell short. But DOCU stock, which crashed 42% after the prior earnings report, plunged in extended trade.
Ulta Beauty beat views and announced a new $2 billion ULTA stock buyback. ULTA stock rose slightly in overnight action, near an early entry after retaking the 50-day line Thursday and closing on a trendline.
Meanwhile, Costco Wholesale, Regeneron Pharmaceuticals and J.B. Hunt Transport Services are rebounding from key levels and not far from possible buy points.
TSLA stock is on IBD Leaderboard, with COST stock joined the Leaderboard watchlist on Thursday. Costco, Regeneron and JBHT stock are on the IBD 50. REGN stock was Thursday's IBD 50 stock to watch.
Dow Jones Futures Today
Dow Jones futures rose 0.8% vs. fair value, backing off highs as Putin's "positive shifts" comments first hit. S&P 500 futures climbed 0.9%. Nasdaq 100 futures advanced 1.2%. DOCU stock is on the Nasdaq 100.
Crude oil futures edged higher, slashing solid overnight gains following Putin's Ukraine comments. The European Union announced a pause in Iran nuclear talks due to "external factors," likely referring to Russia's Ukraine invasion in some way.
Gold prices fell more than 1%.
The 10-year Treasury yield was flat at 2.01%, after being below 2% prior to Putin's comments.
The Hong Kong tech index saw huge losses Friday amid renewed U.S. delisting fears. The SEC on Thursday identified five U.S.-listed Chinese stocks that it could delist, eventually, if they don't comply with U.S. auditing laws. However, U.S.-listed China stocks are generally rising modestly Friday morning after Thursday tumbles.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally retreated Thursday, but the major indexes came off session lows. The Dow Jones Industrial Average gave up 0.3% in Thursday's stock market trading. The S&P 500 index lost 0.4%. The Nasdaq composite retreated 0.95%. The small-cap Russell 2000 slid 0.5%.
U.S. crude oil prices fell 2.5% to $106.02 a barrel, rising solidly intraday. Crude oil futures tumbled 12% on Wednesday.
The 10-year Treasury yield popped 6 basis points to 2.01%, closing above 2% for the first time since Feb. 16. The 10-year yield is up 17 basis points this week.
The consumer price index shot up 7.9% vs. a year earlier, the hottest inflation in 40 years, though that was in line with views. The Federal Reserve is a lock to raise interest rates at the March 15-16 meeting, kicking off what will likely be a big tightening cycle.
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ETFs
Among the best ETFs, the Innovator IBD 50 ETF rose 0.8%, while the Innovator IBD Breakout Opportunities ETF gained 1.6%. The iShares Expanded Tech-Software Sector ETF sank 1.5%. The VanEck Vectors Semiconductor ETF retreated 2.1%.
Reflecting stocks with more speculative stories, the ARK Innovation ETF skidded 3.5% and ARK Genomics shed 2.7%. Tesla stock remains the No. 1 holding across Ark Invest ETFs.
The SPDR S&P Metals & Mining ETF jumped 4.6%, and Global X U.S. Infrastructure Development ETF edged up 0.7%. U.S. Global Jets descended 0.8%. SPDR S&P Homebuilders fell 0.7%. The Energy Select SPDR ETF gained 3.1%, and the Financial Select SPDR ETF declined 0.8%. The Health Care Select Sector SPDR Fund was just below fair value.
Five Best Chinese Stocks To Watch Now
Rivian Earnings
Rivian lost $2.46 billion in Q4. The EV maker reported $54 million in revenue on 909 vehicles deliveries. As of March 8, Rivian says it's produced 2,425 vehicles in total, vs. 1,015 at the end of last year.
Rivian expects supply-chain woes to "persist" through 2022.
Last week, Rivian hiked prices on its EV vehicles sharply, angering many customers.
Rivian stock fell nearly 10% early Friday. RIVN stock tumbled 6.35% on Thursday to 41.16, a fresh record low. Rivian came public at $78 a share in early November and ran up to 179.47 in its first five trading sessions. But it's been all downhill since then.
Tesla stock fell 2.4% to 838.30 on Thursday, dipping back below its 200-day moving average.
Tesla raised the price of its made-in-China Model 3 and Y vehicles by $1,000 on Thursday. It's also reportedly tripling Model Y delivery times in the U.S. unless buyers also opt for the $12,000 Full Self-Driving package.
On Wednesday, TSLA stock rose 4.2%, retaking the 200-day line but stopping just short of its 21-day moving average. That's been a key resistance area for the EV giant and the major indexes.
Tesla stock remains well above its Feb. 24 low of 700.
IBD 50 Stocks To Watch
Costco stock rose nearly 1% to 532.72 on Thursday, once again finding support intraday at its 50-day moving average, which also essentially coincides with its 10-day and 21-day lines. Shares are in a cup base with a 571.59 buy point, according to MarketSmith analysis. But COST stock is working on a handle. Investors already could use 545.39 as an early entry.
The relative strength line is right at highs, reflecting Costco stock's outperformance vs. the S&P 500 index. The RS line is the blue line in the charts provided.
Regeneron stock climbed 1.1% to 630.36 on Thursday, bouncing from its 50-day line, which is almost identical to its 10-day and 21-day lines. Earlier, the biotech giant found support at its 200-day line. Throughout 2022, REGN stock has shown extremely tight action on a weekly basis. The RS line is at the highest level since late August.
REGN stock has a 673.96 buy point from a flat base within a longer consolidation. Investors could use 645.10, just above the Feb. 11 high, or 636.46, just above Monday's peak, as early entries. The lower entry would also serve as a trendline break, while still being close to the 50-day line.
JBHT stock rose 1.3% on Thursday to 201.88, rebounding from its 50-day and 21-day lines. The trucking operator nearly broke out of its flat base on Monday, but reversed lower that day and fell though its 50-day on Tuesday. The RS line remains at record highs while JBHT stock is still basing, giving it a "blue dot" on MarketSmith charts.
The current base is only 12% deep, and its lows are just above the highs of a prior consolidation. The buy point is 208.97.
Market Rally Analysis
Thursday was not a good day for the stock market rally. But it wasn't that bad either. The major indexes sold off in the morning, with the Nasdaq down more than 2%. But the indexes came well off lows.
A pullback wasn't a surprise after Wednesday's big gains. Holding onto the bulk of the prior session's advance and closing near session highs weren't too shabby.
A follow-through day could happen at any point to confirm the new market rally. But not all confirmed uptrends work, and a FTD right now would come with a lot of caveats.
The major indexes remain well below their 10-day moving averages. The 21-day line, a key resistance level in 2022, looms above that. Several other hurdles would follow.
In addition, a follow-through day should have stocks to buy. In Wednesday's big rally, the big winners were beaten-down growth names that were far from any kind of entry. If there's a follow-through day, you want stocks like Costco, Regeneron and J.B. Hunt participating.
So it's encouraging that Costco, Regeneron and JBHT stock rose slightly. So did UnitedHealth, Vertex Pharmaceuticals, Arista Networks, Nucor and ULTA stock, at least fractionally, even as ARK-type stocks and the broader indexes lost ground.
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What To Do Now
A shaky stock market rally attempt continues within the context of a correction going back to early January or late November. There is no clear trend, and no reason to make a strong stand, long or short.
If you do take new positions, consider taking partial or full profits at 10% or even 5%. Too many stocks have flashed buy signals and run up briefly only to reverse lower.
Even if the technical picture brightens and quality stocks flash buy signals and start to work, investors should build exposure slowly.
In this news-driven market, a headline could send stock prices soaring or plunging, with little confidence in the news or market move. So stay safe.
At some point, a clear market uptrend will take hold. So be ready by staying engaged and refining your watchlists. Look for stocks such as Costco that are finding support at their 21- and 50-day lines instead of resistance.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
