Dow Jones Futures Rise Ahead Of Housing Data; Tesla Plunges On Reduced Production Schedule

Dow Jones futures rose Tuesday morning, with an early dose of economic data set to launch the short, final trading week of the year. China-based stocks rallied as China further eased its Covid restrictions. Tesla stock dived more than 6% after Reuters reported that the electric-vehicle giant plans to run a reduced production schedule at its Shanghai plant in January.


Tuesday’s economic data includes two housing reports, with Case-Shiller home price index and FHFA House Price Index — both due out at 9 a.m. ET — along with the Dallas Fed Manufacturing Survey out at 10:30 a.m.

Per Econoday estimates, the October Case-Shiller home price index is expected to fall another 1.2% after September’s 1.2% decline, but still show a year-over-year increase of 8.1%. Meanwhile, the FHFA House Price Index is forecast to fall 0.5% for October, with a 9.1% year-over-year rise.

Finally, the Dallas Fed Manufacturing Survey is expected to post a -11.0 reading in December vs. -14.4 in the previous month.

On the earnings front, the schedule is bare this week heading into the final week of 2022, with Cal-Maine Foods (CALM) the sole reporter on Wednesday after the close.

Southwest Airlines (LUV) declined more than 3% after the company canceled more than two-thirds of its flights Monday, with plans to cut its schedules on Tuesday and Wednesday due to holiday winter storms.

EV giant Tesla (TSLA) dived more than 6% Tuesday. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded mixed ahead of today’s stock market open.

Medpace (MEDP), IBD Leaderboard stock Neurocrine Biosciences (NBIX), O’Reilly Auto Parts (ORLY) and Texas Roadhouse (TXRH) — as well as Dow Jones names Amgen (AMGN) and Caterpillar (CAT) — are among the top stocks to consider for investor watchlists. Keep in mind the recent market weakness should keep investors on the defensive.

Neurocrine and Texas Roadhouse are IBD Leaderboard stocks. Caterpillar and Medpace were recent IBD Stock Of The Day companies.

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Dow Jones Today: Oil Prices, Treasury Yields

Ahead of Tuesday’s opening bell, Dow Jones futures moved up 0.1% vs. fair value. S&P 500 futures inched higher. Tech-heavy Nasdaq 100 futures moved down 0.2% in morning action, with Tesla pulling hard to the downside while China names (TCOM), Pinduoduo (PDD) and (JD) logged strong gains.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.2% and the SPDR S&P 500 ETF (SPY) moved up 0.5% early Tuesday.

Chinese authorities said the country would end its mandatory quarantine requirement for incoming travelers beginning on Jan. 8. Restrictions on the numbers of passengers and international flights will also be lifted. The latest step in China’s easing of strict Covid restrictions comes even as infections are reported to be spreading rapidly through the country.

China-based solar manufacturers posted some of the strongest early moves, with JinkoSolar (JKS) and Daqo New Energy (DQ) each up more than 4.5%. Among ETFs, KraneShares CSI China Internet (KWEB) jumped 2.3%. The iShares MSCI China (MCHI) added 2.2%.

The 10-year Treasury yield ticked higher to 3.81% Tuesday morning, with the 10-year yield rising after last week’s strong gains. Meanwhile, U.S. oil prices traded up less than 1% Tuesday, as West Texas Intermediate futures traded just above $80 a barrel in morning trade.

Stock Market Rally Under Pressure

On Friday, the Dow Jones Industrial Average rose 0.5%, and the S&P 500 advanced 0.6%. The tech-heavy Nasdaq composite climbed just 0.2%.

Friday’s The Big Picture column commented, “The Nasdaq composite also fought back from negative territory, though its gain was a miserly 0.2%. The tech-heavy index ended up slipping 1.9% for the week and it has work to do to break its downtrend. It is faring far worse than the S&P 500 this year, giving up nearly 34%.”

Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market volatility.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Watch: Amgen, Caterpillar

Drugmaker Amgen continues to trace a flat base amid a three-week losing streak. And shares are below their 50-day line after sharp losses. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. AMGN stock traded a fraction higher Tuesday.

Dow Jones member Caterpillar broke out past a 239.95 buy point in a flat base last week, according to IBD MarketSmith pattern recognition, and just a few cents below the entry following Friday’s advance. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. CAT stock rose 0.3% Tuesday.

CAT stock shows a strong 98 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

4 Top Growth Stocks To Watch In The Current Stock Market Rally

Top Stocks To Watch: Medpace, Neurocrine, O’Reilly, Texas Roadhouse

Medpace bounced sharply from its 50-day line last week, with a gain of 3.3%. The stock rose 0.7% Friday to extend a win streak to four sessions. For now, the correct buy point looms at 235.82, but an earlier entry at 220.09 is also in play. MEDP stock was unchanged Tuesday.

IBD Leaderboard stock Neurocrine slipped 1.7% Friday, ending a five-day win streak that saw the biotech leader find support at its 50-day level. A strong rebound is bullish for the stock’s immediate prospects and the stock is likely forming the right side of a new base. NBIX stock was flat Tuesday.

O’Reilly Auto Parts was also finding much-needed support at its 50-day line last week and remains squarely above a 750.98 flat-base entry. A big rebound off the 50-day line could bring a follow-on entry point, but the market uptrend is under pressure right now, which increases the risk of buying stocks. A new base is likely forming, which will offer a new entry in the near future. ORLY shares were inactive Tuesday.

Texas Roadhouse shows a new buy point at 101.85 in a flat base, but is now consolidating below its 50-day line. The IBD Leaderboard stock will look to recover that key benchmark over the coming sessions, and the current two-day win streak is a promising start. TXRH stock traded unchanged Tuesday morning.

Stocks To Watch

These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Base
Medpace (MEDP) 235.82 Consolidation
Texas Roadhouse (TXRH) 101.85 Flat base
Caterpillar (CAT) 239.95 Flat base
Amgen (AMGN) 296.77 Flat base
Source: IBD Data As Of Dec. 27, 2022

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Tesla Stock

Tesla stock declined another 2% Friday, extending a losing streak to six sessions and hitting another 52-week low. Last week, Tesla shares dived 18% to hit a new 52-week low price at 121.02. Shares closed about 69% off their 52-week high.

Shares extended their losses Tuesday morning, diving another 6% after Reuters reported Tesla extended its production cuts that began this month into next year. Tesla stock is set to hit a new low, trading below 116 a share in premarket trade.

Tesla reportedly suspended production at its Shanghai plant on Saturday, hurrying its plan to pause production at the plant at the end of December.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares dropped 0.3% Friday, closing just shy of their 52-week low, which was set on June 16 at 129.04. The stock is around 28% off its 52-week high. Shares lost a fraction Tuesday.

Microsoft stock rose 0.2% Friday, but remains below the 50-day line after last week’s 2.4% decline. The software giant remains about 30% off its 52-week high. MSFT stock moved up 0.3% early Tuesday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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