Dow Jones futures were lower after Monday’s stock market action. Dow Jones stocks Home Depot (HD) and Walmart (WMT) will report before the open on Tuesday, followed by key economic data — Fed minutes and US retail sales — on Wednesday.
Dow Jones Gains: Home Depot, Walmart
Home Improvement Retailer Home Depot will report its second quarter results early on Tuesday. Analysts expect the company to earn $4.95 per share on sales of $43.3 billion. HD shares closed Monday about 25% off their 52-week high.
Discount retailer Walmart extended its winning streak to seven sessions on Monday, rising 0.3%. Walmart second quarter earnings are expected to fall 9% year over year to $1.62 per share on revenue of $150.9 billion.
Stock market today
On Monday, the Dow Jones Industrial Average rose 0.45%, while the S&P 500 gained 0.4%. The Nasdaq technology index rose 0.6 percent, extending Friday’s gains.
Overview of the US stock market today
Last updated: 4:34 PM ET on 08/15/2022
In the healthy stock market environment, Dow Jones stocks Coke (KO) and Merck (MRK) – as well as Albemarle (ALB), Costco (PRICE), Monolithic energy systems (MPWR) and Ollie’s Bargain Outlet (OLLY) — are among the best stocks to buy and watch.
Dow Jones futures today: Treasury yields, oil prices, Fed minutes
Before Tuesday’s open, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures were down 0.2 percent from fair value. Remember this night action in Dow Jones futures and elsewhere does not necessarily become an actual trade in the next regular Stock Exchange session.
The yield on the 10-year Treasury note fell on Monday, closing at 2.79% and extending Friday’s losses. In early August, the 10-year yield hit its lowest level since early April, but is now trying to recover. Meanwhile, U.S. oil prices fell more than 3 percent, with West Texas Intermediate futures trading below $89 a barrel.
Minutes from the Federal Reserve’s latest meeting are due to be released Wednesday morning. The minutes are likely to reveal clues into the central bank’s thinking on potential rate hikes at its September meeting. At the last meeting of the FedThe central bank raised interest rates by 75 basis points for a second consecutive meeting, and Fed Chairman Jerome Powell indicated that a third such hike “could be appropriate” in September.
What to do in the current stock market rally
The stock market rally remains solid, with the Dow Jones Industrial Average on a four-day winning streak. The Nasdaq and S&P 500 shrugged off Thursday’s decline and rose for two straight sessions.
As the market shows signs of strength, investors have the green light to increase exposure, but keep their positions small to begin with. If a new purchase progresses, increase exposure methodically. There is still a lot of uncertainty for the stock market to navigate, so having plenty of cash still makes sense.
The Big Picture column on Friday commented: “The stock market broke out to hit its fourth straight weekly high on Friday. Indices rallied again as encouraging inflation data emboldened bulls.”
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Dow Jones stocks to watch: Coca-Cola, Merck
Dow Jones soft drink giant Coca Cola is building a flat base that has a buy point at 67.30. A handle entry at 65.14 is also in play. Shares are pulling back from their 50-day line and closing in on the early entry amid Monday’s 1.3% rally.
Merck is also building a flat base, a pattern that shows a 95.82 buy point. Shares are trying to hold above their 50-day line amid Monday’s 0.5% drop, according to IBD MarketSmith graph analysis.
MRK shares showing a solid 94 out of a perfect 99 IBD Composite Rating, according to IBD Stock Check. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical indicators.
Top stocks to watch: Albemarle, Costco, Monolithic, Ollie’s
IBD ranking Shares and lithium producer Albemarle is in buy range after Friday’s breakout following a large cup handle at 273.78 point of purchase. The 5% buy zone rises to 287.47. Earlier last week, the stock broke through a smaller cup with a buy point of 250.25. The stock rose 0.9% on Monday, extending its winning streak to four sessions.
Retail giant Costco creates a mug with a handle that displays 552.81 purchase points. Shares rose 1.6% on Monday and are about 3% away from their last entry.
Recent IBD Stock of the Day Monolithic Power Systems added a handle to the base of the bowl last week, moving the correct buy point from 580.10 to 541.49. Meanwhile, shares remain above an entry of 514.80. Shares rose 1.7% on Monday.
Ollie’s Bargain Outlet is recovering from its 10 week line — critical level of support — placing the best discount retailer in a new buying area. Stocks also carve a handle after large cup base, placing the last buy point at 72.37. The current price action is about 10% away from this entry. Shares lost 0.4% on Monday.
Tesla shares rose 3.1% on Monday, closing at their highest level since May 4. The stock is trying to reassert itself above resistance around its 200-day line, which is a key level to watch. The 3-for-1 stock split will take place on August 24.
Shares are about 25% off their 52-week high.
Dow Jones Leaders: Apple, Microsoft
Between Dow Jones stocks, Apple shares rose 0.6% on Monday, rising for a second day in a row. The stock continue to build the right side of the cup base which has 179.71 buy points. Another interpretation could be a major double bottom extending into January. Either way, the point of purchase is identical. Watch for a potential handle to form and suggest a lower entry.
On the upside, the relative strength line of stocks is now at new highs, indicating major stock market outperformance.
Microsoft gained 0.5% on Monday, closing just below its long-term 200-day line, which is a key resistance area to watch. The stock closed about 16% off its 52-week high.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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