Dow futures drop: Netflix chills; Tesla Eyes 3 points buy with accrued profits

Dow futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. Netflix topped major earnings reports on Tuesday night, with Tesla closing in on Wednesday.

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The stock market rally continues to trade sideways, with major indexes closing for little change again on Tuesday.

Netflix (NFLX) oscillated to mixed results, while Intuitive surgery (ISRG) jumped towards the point of purchase. Interactive Brokers (IBKR) And United Airlines (UAL) also reported. Meanwhile, regional banks have been hit hard Western Alliance Bancorp (WAL) And Metropolitan Bank Holding (MCB) rose on better earnings than feared.

Chip equipment giant ASML (ASML) reports early Wednesday, with Nazir L Research (LRCX) Late Wednesday.

finally, Tesla (TSLA) reports Wednesday night. Analysts expect a significant drop in Tesla’s profits amid sharp price cuts. However, Tesla stock is approaching several potential buying points.

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Dow jones futures today

Dow Jones futures lost 0.2% against fair value. S&P 500 futures were down 0.15% and Nasdaq 100 futures were down 0.1%. Netflix stock is a prominent S&P 500 and Nasdaq 100 component, along with ISRG and UAL.

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

Main earnings

NFLX stock lost a bit overnight after initially falling and then briefly turning positive. Netflix subscriber growth declined, slowing significantly compared to the fourth quarter. Profits just outweighed and revenue just missed out. The streaming TV giant also said it’s cracking down on password sharing in the US soon and will increase buybacks during the year. The shares closed up 0.3%, at 333.70, and found support at the 50-day line. Netflix stock has a base of 349.90 cups by the handle after the streaming giant more than doubled from May 2022 to early February 2023.

Before closing on Tuesday, Netflix said it will close its DVD-by-mail business on September 29.

ISRG stock jumped after hours, indicating a possible breakout. Intuitive surgical profits and revenues beat modestly, while procedure growth rose sharply. Shares rose 0.15% to 269.28 on Tuesday. Intuitive Surgical stock has a 285.19 cup base buy after removing a 259.12 early entry from a very low handle.

UAL stock rose slightly after United Airlines earnings topped views. Shares rose 1.6% to 43.04 on Tuesday, rebounding this week from the 200-day line but still trying to recover from the early March sell-off.

IBKR stock fell strongly in extended trading after Interactive Brokers’ earnings fell while revenues were on the same line. Interactive Brokers rose 1.1% to 84.74 on Tuesday, flashing an early entry from the 50-day line. However, IBKR stock is now pointing to a dip below that key level.

WAL stock jumped overnight after the Phoenix-based bank crossed views and said deposits had increased since the end of March. Western Alliance shares fell 0.9 percent on Tuesday, to 32.51. Shares were far from an 11-year low of 7.46 in March but are down more than 50% from their levels in early March.

MBC stock also jumped after hours, as New York City Bank stock also topped, with a slight increase in core deposits as of March 31 versus the end of 2022. Metropolitan Bank stock fell 1.2% to 30.80.

supraregional US Bancorp (USB) And Morgan Stanley (Ms) on Wednesday early.

ASML earnings will be announced very early Wednesday morning. ASML rose 0.7% to 643.33 on Tuesday but hit resistance at the 50-day line. The Dutch chip equipment giant has 683.28 Buy Cup with Handle points, according to MarketSmith analysis.

On Monday, ASML stock fell 4.1% after a report Taiwan Semiconductor (TSM) will cut capital spending plans when it reports first-quarter results early Thursday.

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Stock market rise

The stock market opened higher, erasing gains, and then traded narrowly mixed for most of the session.

The Dow Jones Industrial Average lost a small portion in stock trading on Tuesday. The S&P 500 rose 0.1%. The Nasdaq Composite Index fell. Small cap Russell 2000 fell 0.4%.

US crude oil prices rose 3 cents to $80.86 a barrel.

The 10-year Treasury yield fell 2 basis points, to 3.57%.

Exchange Traded Funds

Among the ETFs, the Innovator IBD 50 ETF (fifty) rose 2%, marking its best level since early December. iShares Expanded Technology and Software ETF (IGV) increased by 0.2%. VanEck Vectors Semiconductor Corporation (SMH) rose 0.45%, with shares of ASML and LRCX both holding SMH.

Reflecting stocks with more speculative stories, the ARK Innovation ETF (ark) is down 0.2%, and continues to trade just below the 50-day and 200-day moving averages. ARK Genomics ETF (ARKG) 0.9%. TSLA stock remains the No. 1 holding of Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) increased by 0.6%. American global aircraft (Planes) advanced 0.9%, with UAL stock being a senior member. SPDR S&P Homebuilders ETF (XHB) gained 1.7%. Energy Defined Fund SPDR ETF (xle(applied 0.4% and the SPDR Health Care Sector Selection Fund)XLV) decreased by 0.7%.

SPDR Financial Choice Fund (XLF) decreased by 0.3%. SPDR S&P Regional Banking ETF (KRE), which includes WAL stock, fell 2.2% on Tuesday.

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Tesla earnings

Tesla’s earnings are expected to drop 20% year-over-year as deep price cuts hit gross margins. Revenue is expected to increase by 26% to $23.73 billion, but will be lower sequentially compared to the fourth quarter.

Already in April, Tesla cut prices further in the United States, Europe and other major markets. China’s EV competitors are introducing a slew of new models this week, many of which challenge Tesla’s aging lineup. So analysts will want to see how margins might come down, and whether deliveries will continue to rise. Investors will also want updates on the Tesla Cybertruck, the updated Model 3 and any hints about the next-generation platform. Tesla bulls also have high hopes for the company’s energy storage business.

Tesla stock

Tesla stock fell 1.5% to 184.31 on Tuesday, continuing to face resistance at the 50-day moving average. The stock has a 207.89 point buy handle cup base that formed just below the 200-day moving average. Investors may prefer to use a decisive break of the 200-day line, currently around 213, as the entry for TSLA stock. The third potential buying point for Tesla stock would be a strong move above the 50-day post-earnings line, providing early entry.

Market rally analysis

The stock market rally had another quiet day, as major indexes didn’t move much after giving up some early gains.

There is nothing wrong with the market digesting the gains and trading tightly near the top of recent consolidations and the highs of 2023, especially as earnings season approaches. This is to let the big stocks take a break while the others prepare.

While market breadth improved significantly on the New York Stock Exchange, it was less impressive on the Nasdaq. There is a tug of war between new highs versus new lows.

Invesco S&P 50500 Equal Weight Fund (RSP) in recent weeks but has not decisively cleared the 50-day streak.

The Russell 2000, the home of many bank stocks, is below the 200-day and 50-day lines.

Homebuilders and some other housing-related stocks are getting stronger. Dr. Horton (DHI) Thursday earnings reports, the start of a number of reports in the group.

Chip stocks tried to pull away Tuesday morning after the SMH ETF found support at the 50-day line. But the ETF faded despite its solidity nvidia (NVDA) gains, with several chip operations reversing lower. Earnings from ASML, Lam Research and Taiwan Semiconductor could have a significant impact on the chip segment and the overall market recovery.

Travel, commodities, shoes, software, defense/aviation, medical products, toys and other groups also have many stocks in or near their purchase areas. More market strength and breadth could lead to plenty of buying opportunities.

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What are you doing now

Buying opportunities have been relatively limited over the past several days, although investors could have picked some of them. It’s not the time to dramatically increase market exposure from current levels, whatever those levels may be. The sideways movement of the market, while constructive, does not provide a real boost for individual stocks. This is likely why many promising stock moves fade near the open.

Also, earnings season is likely to swing in stocks, sectors, and indices over the next several sessions.

But there are plenty of stocks showing interesting action from a variety of sectors. Investors want to be ready to increase exposure more meaningfully. So have your watchlists ready.

Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.

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