Dow Jones futures exhibited a modest upward trend overnight, in sync with gains in S&P 500 and Nasdaq futures. However, the stock market faced broadened losses, with the Nasdaq experiencing a second consecutive 1%+ decline, marking a four-session losing streak. Notably, Cathie Wood’s Ark Invest made strategic moves, acquiring Tesla shares while shedding some holdings in a leading Bitcoin stock.
Market Overview:
- Eli Lilly (LLY) demonstrated strength, securing a second early entry post a Tuesday buy signal.
- Bitcoin faced a significant decline, anticipating SEC approval of spot Bitcoin ETFs in the coming days. COIN, MARA, and MSTR witnessed morning declines, while COIN and MARA rebounded later.
- Tesla (TSLA) faced losses, yet Cathie Wood’s Ark Invest increased its holdings in the company, simultaneously reducing COIN stock.
Market Indices:
- Dow Jones futures marginally exceeded fair value, with S&P 500 and Nasdaq 100 futures also showing slight gains.
- The Dow Jones Industrial Average and S&P 500 each fell by 0.8%, while the Nasdaq composite slumped by 1.2%. The Russell 2000 saw a substantial 2.7% decline.
- Market breadth weakened, with key indices closing below their 21-day moving averages.
Economic Indicators:
- U.S. crude oil prices surged 3.3% to $72.70 a barrel.
- The 10-year Treasury yield fluctuated, closing at 3.92%.
- Federal Reserve officials hinted at potential rate cuts in 2024, and economic indicators, including the ISM manufacturing index, signaled mixed trends.
ETF Performance:
- Growth-focused ETFs like IGV and SMH experienced declines, while ARKK and ARKG, representing speculative stocks, fell significantly.
- Sector-specific ETFs such as XME, JETS, and XHB recorded losses, while XLE rose by 1.6%.
Bitcoin Price Movement:
- Bitcoin faced a 4.7% decline, closing at $42,952.22, amidst anticipation of SEC approval for spot Bitcoin ETFs. MicroStrategy and Marathon Digital saw fluctuations, while Coinbase declined but rebounded from intraday lows.
Cathie Wood’s Portfolio Adjustments:
- Ark Invest purchased Tesla shares and sold COIN stock on January 3. The move reflects Wood’s strategy of acquiring stocks during downturns.
- LLY stock witnessed a 4.3% rise, breaking key resistance levels and offering an entry point for investors.
Tesla Stock Analysis:
- TSLA stock declined by 4% to $238.45, falling below the 21-day line but finding support at the 10-week line. Analysts expressed mixed reactions to Tesla’s recent record deliveries.
Market Outlook:
- Investors are cautioned to monitor market developments closely, as the Nasdaq and leading stocks face uncertain trajectories.
- While potential bullish rallies may occur, caution is advised due to the market’s current volatility.
- Consideration of profit-taking is suggested, especially for those who haven’t done so in recent sessions.
