Will Powell Testimony Threaten Stock Market Rally? Apple, Tesla In Focus

Dow Jones futures were little changed ahead of Tuesday’s open after the Dow Jones Industrial Average cut gains to just 40 points Monday. Federal Reserve Chair Jerome Powell’s testimony is due on Tuesday. Apple (AAPL) stock jumped on an analyst buy rating, while Tesla (TSLA) shares skidded after the company’s additional round of price cuts.


Powell Testimony

Fed chief Powell is set to begin two days of congressional testimony Tuesday, where he’ll have the chance to explain the central bank’s planned response to a more resilient economy. Last month, the Fed raised rates by a quarter-percentage-point, and investors will be looking clues for the amount of the hike at this month’s March 21-22 meeting.

Currently, traders place a 69% chance of a quarter-percentage-point rate hike at the next meeting, according to the CME’s FedWatch Tool.

Then, Friday will feature the Labor Department’s February employment report. Nonfarm payrolls are expected to come in at 215,000 in February, down from January’s 517,000 growth, per Econoday estimates.

Guidewire (GWRE) reported mixed fiscal-Q2 results late Monday. Shares climbed around 1% in extended trade. The stock is building a bottoming base with a 78.76 buy point.

More key earnings report this week include BJ’s Wholesale (BJ), CrowdStrike (CRWD), Dick’s Sporting Goods (DKS), JD.com (JD), MongoDB (MDB), Thor Industries (THO) and Ulta Beauty (ULTA).

Stock Market Today

On Monday, the Dow Jones Industrial Average and S&P 500 both gained 0.1% apiece. The tech-heavy Nasdaq composite reversed down 0.1% after giving up solid gains.

Electric-vehicle giant Tesla traded down 2% Monday. Among Dow Jones stocks, Apple rose 1.85% and Microsoft (MSFT) climbed 0.6% in today’s stock market action.

IBD Leaderboard stock Alteryx (AYX), Arista Networks (ANET), Palo Alto Networks (PANW) and Salesforce (CRM) — as well as Dow Jones stocks American Express (AXP) and JPMorgan Chase (JPM) — are among the top stocks to buy and watch, amid the recent stock market strength.

Alteryx is an IBD Leaderboard stock. And Salesforce was featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Futures Today: Oil Prices, Treasury Yields

Ahead of Tuesday’s opening bell, Dow Jones futures rose 0.15% vs. fair value, and S&P 500 futures gained 0.2%. Nasdaq 100 futures were up 0.3% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

The 10-year U.S. Treasury yield rebounded Monday, settling at 3.98%. Oil prices reversed from early losses to rise around 1%, as West Texas Intermediate futures traded above $80 a barrel. WTI futures traded around their recent highs.

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What To Do In The Strengthening Stock Market Rally

Now is an important time to read IBD’s The Big Picture column with the stock market trend back in a “confirmed uptrend” after sharp gains in recent sessions.

The current uptrend is strengthening, which justifies holding a higher exposure level of 60% to 80%. But investors should raise their exposure in a disciplined fashion in case Powell’s testimony spoils the party this week.

(Check out IBD Stock Lists 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: American Express, JPMorgan

American Express is building a giant cup-with-handle base that displays a 182.25 buy point. Shares are just 2% below their buy point, as they inched lower Monday. Bullishly, the stock’s relative strength line is at new highs, which is a particularly positive sign ahead of a potential breakout.

Banking giant JPMorgan is in buy range above its 138.76 flat-base buy point despite Monday’s 0.6% loss, according to IBD MarketSmith chart analysis. Shares are also rebounding from their key 50-day moving average.

JPM stock shows a solid 94 IBD Composite Rating out of a perfect 99, per IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Top Stocks To Buy And Watch: Palo Alto, Salesforce

Cybersecurity leader Palo Alto Networks is within striking distance of a base’s 193.01 buy point following a 12.5% surge on Feb. 22. Shares dropped 1.9% Monday, closing about 2% away from the latest entry.

Back story: Last week, the cybersecurity giant announced very good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

Last week, Dow Jones leader Salesforce staged a bullish breakaway gap past a 178.94 buy point on strong fourth-quarter results. Shares surged 11.5% Thursday and are in the 5% buy zone that goes up to 187.89.

Back story: Salesforce sells software under a subscription model. Its software helps businesses organize and handle sales operations and customer relationships. The company has expanded into marketing, customer services and e-commerce. Salesforce said it has disbanded its “M&A committee,” implying it will make no more big acquisitions, amid growing pressure from activist investors.

Arista, Alteryx Hit Latest Buy Points

Arista Networks moved back into buy range above a 140.91 buy point from a cup base after Monday’s 1.35% advance. A decisive retake places the stock in the buy range that goes up to 147.96.

Back story: Arista sells switches that speed up communications among racks of computer servers packed into data centers. According to analysts, Arista is gaining ground in the so-called “enterprise” market — large companies, government agencies and educational institutions. Earnings surged 72% in the most recent quarter.

IBD Leaderboard stock Alteryx cleared a trendline buy point at 66.50 within a handle on an early-stage cup on Friday. Aggressive investors could buy on the breakout above the trendline, while a conventional entry at 70.73 is also in play. Shares are about 5% away from that buy point.

Back story: The Irvine, Calif., firm created a self-service platform for data analytics. Demand is clearly strong as sales have risen from the low $100 million level per quarter in 2021 to $216 million in the third quarter of 2022, up 75% vs. a year ago, and $301 million in Q4 2022, up 73%. This rapid revenue growth is one reason why Alteryx also posted a profit of 84 cents a share in Q4, likely the biggest quarterly earnings in company history.

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Tesla Stock

Tesla stock skidded 2% Monday after the EV giant slashed U.S. vehicle pricing once again Sunday evening, the latest sign demand for Tesla vehicles may be waning after an initial boost came from January price cuts.

On Sunday, Tesla dropped the price for a Model S by $5,000, bringing the basic version to $89,990. Meanwhile, the cost of a Model X SUV decreased by $10,000, bringing a basic version to $99,990, according to pricing on Tesla’s website.

Despite their strong rebound since Jan. 6, shares are still below the 200-day line. That key level looms as a potential resistance area. Shares closed Monday around 50% off their 52-week high. Aggressive investors can use the Feb. 16 high at 217.65 as a potential entry. However, to be safe, Tesla stock should clear the 200-day line, which is now below 221.

On Tuesday, weekly China EV insurance registration data could be an important gauge for Tesla demand in the world’s largest EV market, which is in the midst of a huge price war started by Tesla.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares jumped 1.85% Monday, closing at their highest level since Feb. 15. Early Monday, Goldman Sachs started coverage with a buy rating and 199 price target, which was a 31% premium to Friday’s closing price.

Microsoft shares moved further above their 200-day line after Monday’s 0.6% gain. The stock is still around 20% off its 52-week high after recent declines. MSFT stock rose 0.3% Monday.


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