In the overnight market, Dow Jones futures showed minimal movement, mirroring the stability observed in S&P 500 and Nasdaq futures. Notable among the impending earnings reports are those of Taiwan Semiconductor (TSM) and Birkenstock, both scheduled for early Thursday.
The broader stock market faced headwinds on Wednesday due to sluggish China GDP growth, increased European inflation, and mixed U.S. economic indicators. Despite testing crucial levels, major indexes managed to close above their lows.
Amid this market volatility, certain stocks demonstrated resilience, either holding or remaining near buy zones. Noteworthy performers included Microsoft (MSFT), GitLab (GTLB), Datadog (DDOG), Expedia (EXPE), and others. Conversely, Tesla (TSLA) experienced a retreat, influenced by substantial price cuts in Europe.
Key Stocks to Watch:
- IBD Leaderboard: DDOG, Spotify, Novo Nordisk
- Leaderboard Watchlist: CELH
- SwingTrader: Microsoft, Skechers, Spotify
- IBD Long-Term Leaders: MSFT
- IBD 50 List: RCL, Datadog, Celsius, Microsoft, Novo Nordisk, United Rentals, Axon Enterprise
- IBD Big Cap 20: Datadog, Axon Enterprise, URI
DoubleVerify was highlighted as the IBD Stock Of The Day, and GTLB stock was the previous day’s selection.
Dow Jones Futures Today: Dow Jones futures held steady at fair value, while S&P 500 futures and Nasdaq 100 futures experienced marginal declines. The 10-year Treasury yield stood at 4.09%.
Earnings Reports:
- Taiwan Semiconductor (TSM) is set to report Q4 earnings, impacting the chip sector.
- Birkenstock Holding (BIRK) reports for the first time as a public company, with potential implications for its IPO valuation.
Market Rally and Economic Outlook: The stock market faced a retreat, influenced by global economic data and signals of slower rate cuts in the U.S. and Europe. Despite this, major indexes maintained positions above key support levels. Notably, the CBOE Volatility Index (VIX) reached a two-month high, indicating increased market caution.
ETFs and Sector Performance:
- Growth ETFs such as IGV and ARKK dipped, reflecting the challenges faced by tech stocks.
- The VanEck Vectors Semiconductor ETF (SMH) fell, influenced by TSM stock.
- Various sector-specific ETFs, including XME, JETS, XHB, XLE, XLV, XLI, and XLF, experienced declines.
Investor Strategy: Navigating a rangebound market requires caution, with opportunities arising during short-term upswings. Investors should maintain exposure while being prepared to scale back in response to market or individual stock deterioration. Identifying stocks holding up well at key levels is crucial, and maintaining up-to-date watchlists is advised.
