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Dow Jones Futures: 2022 Market Rally Is Breaking Expectations, These Leaders Sell Off; What To Do Now

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Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally came under pressure last week, as Treasury yields soared to their highest level since the coronavirus pandemic began.




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The new year started off with a solid rally on Monday, led by Tesla (TSLA), Advanced Micro Devices (AMD), Nvidia (NVDA) and Apple (AAPL). But the rest of the week was an expectation breaker, with the major indexes selling off and leaders such as Tesla stock reversing hard.

Surging Treasury yields were the driving force, as a surprisingly hawkish Fed jobs report on Friday spurred selling in bonds. That slammed growth stock names and buoyed financials. Rising crude oil prices lifted energy stocks.

But the overall trend was negative. The stock market rally is an uptrend under pressure. Investors should recalibrate their expectations and respond accordingly.

Tesla, AMD and Nvidia stock are in IBD Leaderboard. The video embedded in this article discussed the major indexes and sector moves in detail, while also analyzing Tesla stock, Hilton Worldwide (HLT) and Cheniere Energy (LNG).

Late Friday, Tesla CEO Elon Musk said his company would raise the price of Full Self-Driving in the U.S. by $2,000, to $12,000, on Jan. 17. He also said FSD Beta 10.9 will be released soon.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live


Coronavirus News

Coronavirus cases worldwide reached 306.01 million. Covid-19 deaths topped 5.5 million.

Coronavirus cases in the U.S. have hit 60.95 million, with deaths above 859,000.

New coronavirus cases are well above 2 million a day worldwide, with the U.S. easily breaking daily records. Hospitalizations have risen, but ICU beds generally remain available, as omicron has been milder than previous Covid variants.


Five Stocks Near Buy Points In Rough 2022 Market


Stock Market Rally

The stock market rally started the week off with solid gains but then quickly deteriorated.

The Dow Jones Industrial Average dipped 0.3% in last week’s stock market trading, as blue-chip financials, energy firms and Caterpillar (CAT) offset losses in other sectors. The S&P 500 index retreated 1.9%. The Nasdaq composite sold off 4.5%, its worst weekly loss since last February. The small-cap Russell 2000 gave up 2.9%.

The 10-year Treasury yield skyrocketed 26 basis points to 1.77%, hitting its highest levels since January 2020. U.S. crude oil futures rose about 5% for the week to $78.90 a barrel after topping $80 late in the week intraday.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) plunged 8.6% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) gave up 3.8%. The iShares Expanded Tech-Software Sector ETF (IGV) dived 8.8%. The VanEck Vectors Semiconductor ETF (SMH) slid 3.85%, with AMD stock and Nvidia major components.

SPDR S&P Metals & Mining ETF (XME) rose 2.9% last week. The Global X U.S. Infrastructure Development ETF (PAVE) fell 1.5%. U.S. Global Jets ETF (JETS) ascended 5.3%. SPDR S&P Homebuilders ETF (XHB) tumbled 7.1% as soaring interest rates took a toll. The Energy Select SPDR ETF (XLE) spiked 10.5% and the Financial Select SPDR ETF (XLF) added 5.4%. The Health Care Select Sector SPDR Fund (XLV) slumped 4.6%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dived 10.75% last week and ARK Genomics ETF (ARKG) 11.4%, both skidding to their lowest levels in more than a year. Tesla stock remains the top holding across ARK Invest’s ETFs, though Cathie Woods has slashed her holdings in the EV giant in recent months.


Five Best Chinese Stocks To Watch Now


Market Rally Analysis

The stock market rally started 2022 in a hurry and then fell on its face, with growth stocks leading broad-based losses. The Nasdaq did hold its December lows, barely. The S&P 500 is holding its 50-day line, for now. The small-cap Russell 2000, which finally got above its 200-day line on Jan. 4, retreated back below that key level. That reflects market breadth weakening again after a brief recovery at the end of 2021.

A New Year hangover after a Santa Claus rally isn’t especially surprising. Big institutions can quickly upend the light-volume price moves around the holidays, while tax selling can often spur losses in the prior year’s winners.

But, without looking at a calendar, the stock market rally and many leaders had an expectation-breaking week. On Monday, the Nasdaq was setting up for a move toward record highs. Tesla had broken out powerfully. AMD stock and Nvidia once again rebounded from their 50-day/10-week lines. Apple stock hit a $3 trillion market cap intraday.

A few days later, and the Nasdaq was flirting with its December lows, marking its worst close since mid-October. Tesla stock crashed back below its buy point and its 50-day line, suffering a 2.8% weekly loss despite Monday’s 13.5% gain.

AMD and Nvidia stock reversed back through their 50-day lines again and back to their December lows. Apple stock didn’t fare too badly, down 3%, but still ended below its 21-day line for the first time in months.


Time The Market With IBD’s ETF Market Strategy


More Than Just Growth

It wasn’t just growth stocks with eye-watering valuations that suffered. Medical stocks, which had been broadly robust in late 2021, have stumbled badly to start the new year. Homebuilders, perhaps not surprisingly, have cracked as Treasury yields surged.

Trucking firms, which were an elite group, tumbled this past week, with group leader ArcBest (ARCB) hardest hit. Other shipping groups held up well though.

On the upside, the financial and energy sectors had big weeks. As long as Treasury yields and crude oil prices remain strong, those stocks should fare well. But it wouldn’t be surprising to see yields and oil prices take a breather or retrace some recent gains.


When It’s Time To Sell Your Favorite Stock


What To Do Now

When the market breaks expectations, you can’t stick with the old script. The stock market is not yet in a correction, but the uptrend is under increasing pressure. Growth names arguably have been in a correction for months. With Tesla struggling and many other megacaps aside from Apple testing or undercutting recent lows, that’s becoming more obvious.

Investors should be defensive. Even if you add some new positions in hot sectors, you probably should be reducing exposure. It’s not a good time to be holding growth stocks, aside from core positions in long-term winners.

Making money in a divided, weakening market is exceedingly difficult. It’s far easier to make big gains, with lower risk, in a solid, broad market rally.

Eve Boboch, co-author of The Lifecycle Trade, stressed on Friday’s IBD Live the importance of “preserving your mental capital.” Don’t fight a losing battle only to turn gun shy when conditions are favorable.

Right now is the time to be building up your watchlists. Look for stocks with strong relative strength, finding support at key levels or even holding near buy points. Look for those potential mega-winners, but cast a wide net. It’s unclear which sectors will lead the market higher in 2022, so let the charts guide you.

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.

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Teladoc Tumbled 38% After Big First-Quarter Loss. Is It Just a Pandemic Play?

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After pandemic drop, Canada’s detention of immigrants rises again By Reuters

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© Reuters. FILE PHOTO: Two closed Canadian border checkpoints are seen after it was announced that the border would close to “non-essential traffic” to combat the spread of novel coronavirus disease (COVID-19) at the U.S.-Canada border crossing at the Thousand Isla

By Anna Mehler Paperny

TORONTO (Reuters) – Canada is locking up more people in immigration detention without charge after the numbers fell during the pandemic, government data obtained by Reuters shows.

Authorities cite an overall rise in foreign travelers amid easing restrictions but lawyers say their detained clients came to Canada years ago.

Canada held 206 people in immigration detention as of March 1, 2022 – a 28% increase compared with March 1 of the previous year. Immigration detainees have not been charged with crimes in Canada and 68% of detainees as of March 1 were locked up because Canada Border Services Agency (CBSA) fears they are “unlikely to appear” at an immigration hearing, according to the data.

The rise puts Canada at odds with Amnesty International and other human rights groups that have urged Ottawa to end its use of indefinite immigration detention, noting CBSA has used factors such as a person’s mental illness as reason to detain them.

A CBSA spokesperson told Reuters that “when the number of entries (to Canada) goes up, an increase in detention is to be expected.” CBSA has said in the past it uses detention as a last resort.

A lawyer told Reuters her detained clients have been in Canada for years.

In the United Kingdom, too, immigration detention levels rose last year after dropping earlier in the pandemic, according to government statistics. Unlike Canada, the United States and Australia, European Union member states have limits on immigration detention and those limits cannot exceed six months.

The rise in detentions puts people at risk of contracting COVID-19 in harsh congregate settings, refugee lawyers say.

Julia Sande, Human Rights Law and Policy Campaigner with Amnesty, called the increase in detentions “disappointing but not surprising,” although she was reluctant to draw conclusions from limited data.

The number of immigration detainees in Canada dropped early in the pandemic, from a daily average of 301 in the fourth quarter (January through March) of 2019-20 to 126 in the first quarter (April through June) of 2020-21.

FEW NO-SHOWS AS DETENTIONS DROPPED

Detaining fewer people did not result in a significant increase in no-shows at immigration hearings – the most common reason for detention, according to Immigration and Refugee Board data.

The average number of no-shows as a percentage of admissibility hearings was about 5.5% in 2021, according to that data, compared to about 5.9% in 2019.

No-shows rose as high as 16% in October 2020, but a spokesperson for the Immigration and Refugee Board said this was due to people not receiving notifications when their hearings resumed after a pause in the pandemic.

Refugee lawyer Andrew Brouwer said the decline in detention earlier in the pandemic shows Canada does not need to lock up as many non-citizens.

“We didn’t see a bunch of no-shows. We didn’t see the sky fall … It for sure shows that the system can operate without throwing people in jail,” Brouwer said.

He added that detainees face harsh pandemic conditions in provincial jails – including extended lockdowns, sometimes with three people in a cell for 23 hours a day.

Refugee lawyer Swathi Sekhar said CBSA officials and the Immigration and Refugee Board members reviewing detentions took the risk of COVID-19 into account when deciding whether someone should be detained earlier in the pandemic but are doing so less now.

“Their position is that COVID is not a factor that should weigh in favor of release,” she said.

“We also see very, very perverse findings … [decision-makers] outright saying that individuals are going to be safer in jail.”

The Immigration and Refugee Board did not immediately respond to a Reuters request for comment.

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Nasdaq futures rise as market attempts comeback from April sell-off, Meta shares soar

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Stock futures rose in overnight trading as the market shook off the April sell-off and investors reacted positively to earnings from Meta Platforms.

Futures on the Dow Jones Industrial Average added 70 points or 0.2%. S&P 500 futures gained 0.7% and Nasdaq 100 futures jumped 1.2%.

The moves came as shares of Meta surged more than 18% after hours following a beat on earnings but a miss on revenue, a sign that investors may see signs of relief in the beaten-up tech sector. Shares were down 48% on the year heading into the results.

Meanwhile, shares of Qualcomm gained 5.6% in extended trading on the back of strong earnings while PayPal rose 5% despite issuing weak guidance for the second quarter.

“I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this,” SoFi’s Liz Young told CNBC’s “Closing Bell: Overtime” on Wednesday. “… But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress.”

The after-hour activity followed a volatile regular trading session that saw the Nasdaq Composite stoop to its lowest level in 2022, as stocks looked to bounce back from a tech-led April sell-off. The index is down more than 12% since the start of April.

In Wednesday’s regular trading, the tech-heavy Nasdaq ended at 12,488.93, after rising to 1.7% at session highs. The Dow Jones Industrial Average rose 61.75 points, or 0.2%, to 33,301.93 propped up by gains from Visa and Microsoft, while the S&P 500 added 0.2% to 4,183.96.

Investors await big tech earnings on Thursday from Apple, Amazon and Twitter, along with results from Robinhood. Jobless claims are also due out Thursday.

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