Futures Reverse Lower On Inflation Data

Dow Jones futures clung to modest gains Friday morning after the early release of November’s personal consumption expenditures data, an inflation gauge watched closely by the Federal Reserve. Tesla stock rallied after Chief Executive Elon Musk said he would not sell any more Tesla shares for at least 18 to 24 months.

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Inflation Data

Early Friday, key inflation data arrived in the form of the November Personal Consumption Expenditures price index. The PCE price index came in cooler than expected, rising 0.1% in November vs. Econoday’s consensus estimates for 0.2% growth vs. October. Year over year, the PCE price index rose 5.5%, matching estimates. Personal income rose 0.4% in November, higher than estimates.

Meanwhile, the core PCE price index came in hotter than expected, rising 4.7% year over year vs. the 4.6% estimate.

The PCE price index came out at 8:30 a.m. ET.

Electric-vehicle giant Tesla (TSLA) rallied nearly 2% Friday after Musk’s comments. Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) traded higher 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), Caterpillar (CAT) and Home Depot (HD) — 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 Friday’s opening bell, Dow Jones futures moved up 0.1% vs. fair value. S&P 500 futures inched lower. Tech-heavy Nasdaq 100 futures gained 0.1% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.1% and the SPDR S&P 500 ETF (SPY) moved up 0.15% early Friday.

The 10-year Treasury yield ticked higher 3.72% Friday morning, with the 10-year yield on pace to add to its already strong weekly gains. Meanwhile, U.S. oil prices traded up around 2% Friday, as West Texas Intermediate futures rose above $79 a barrel in morning trade.

Stock Market Rally Under Pressure

On Thursday, the Dow Jones Industrial Average fell 1.05% and the S&P 500 declined 1.45%. The Nasdaq dumped 2.2% while the small-cap Russell 2000 lost 1.3%.

Thursday’s The Big Picture column commented, “IBD’s stock market outlook remains at ‘uptrend under pressure’ following sharp losses in recent sessions. That means investors should be maintaining cautious and defensive stances, with an already reduced market exposure. IBD readers should be avoiding most breakouts, unless they occur in stocks with top-notch fundamentals and technicals.”

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, Home Depot

Drugmaker Amgen is building a new flat base following a big advance into the middle of November. But shares are below their 50-day line after sharp losses in recent weeks. For now, the correct buy point is 296.77, but the stock needs to decisively retake its 50-day first. AMGN stock traded unchanged Friday.

Dow Jones member Caterpillar broke out past a 239.95 buy point in a flat base this week, according to IBD MarketSmith pattern recognition, but is back below the entry following Thursday’s slide. Bullishly, the stock’s relative strength line, a key technical indicator, is at new highs. CAT stock rose 0.3% Friday.

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.

Home improvement retailer Home Depot is about 4% below a cup-with-handle base’s 329.77 buy point after reversing last week’s breakout move. HD stock traded unchanged Friday morning.

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 this week, rising for a third straight day Thursday. 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 Friday.

IBD Leaderboard stock Neurocrine rallied for a fifth straight session Thursday, gaining 1.7% and continuing to rebound from 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 Friday.

O’Reilly Auto Parts is also finding much-needed support at its 50-day line this 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. ORLY shares were inactive Friday.

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 days, and Thursday’s upside reversal was a promising start. TXRH stock traded unchanged Friday morning.

Stocks To Watch

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

Source: IBD Data As Of Dec. 22, 2022

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

Tesla Stock Rallies On Elon Musk Comments

Tesla stock plunged 8.9% Thursday, extending a losing streak to five sessions and hitting another 52-week low. Shares rebounded nearly 2% Friday morning. Late Thursday, Musk pledged to not sell any more Tesla stock for at least 18 to 24 months. “You certainly have my commitment I won’t sell stock until, I don’t know, probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” Musk commented on a Twitter Spaces call.

Musk also said that a decision on a buyback of the company’s stock could be influenced by the severity of any economic downturn. “The board is very open to doing a buyback,” Musk said. He added, “It wouldn’t be smart to do a buyback and then discover the recession is worse than 2009.”

Meanwhile, Wedbush slashed its price target the electric-vehicle giant, lowering the target from 250 to 175 due to “demand cracks.” The brokerage maintained its outperform rating on the stock. The lowered price target is almost 40% above Tesla’s closing prices on Thursday.

Canaccord also lowered its price target, to 275 from 304, and kept its buy rating on the stock.

On Thursday, TSLA stock hit a new 52-week low, trading as low as 122.26. Shares closed about 69% off their 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares sold off 2.4% Thursday, 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 traded up 0.4% Friday.

Microsoft stock declined 2.55% Thursday, ending a two-day win streak, but holding above the 50-day line. The software giant remains about 30% off its 52-week high. MSFT stock moved up 0.6% early Friday.

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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