The stock market rally showed resilience after a volatile morning following a hotter-than-expected CPI inflation report and the launch of Bitcoin ETFs. The Dow Jones hit a record high soon after the open while the S&P 500 set a 52-week best. But the major indexes reversed solidly lower, only to rebound to close essentially flat. Treasury yields reversing lower were a key factor for the afternoon market bounce.
One of the most anticipated events of the day was the debut of 11 spot bitcoin ETFs, which began trading Thursday after the SEC granted approval late Wednesday. Bitcoin initially jumped above $49,000 before erasing gains. Meanwhile, bitcoin stocks such as cryptocurrency exchange Coinbase (COIN), bitcoin miner Marathon Digital (MARA) and bitcoin holder MicroStrategy (MSTR) reversed lower.
The launch of these ETFs was seen as a game-changer for the crypto industry, as they would provide more legitimacy, liquidity and accessibility to investors who want to gain exposure to the digital asset without having to buy or store it directly. However, some experts warned that these ETFs could also pose significant risks, such as regulatory uncertainty, hacking, fraud and volatility.
Tesla’s Slump: A Sign of Trouble or a Buying Opportunity?
Tesla (TSLA) extended a recent sell-off, breaking key levels amid bad news from Hertz (HTZ) and more. The electric car maker reported lower-than-expected vehicle deliveries for December and missed analysts’ estimates for revenue and profit. Tesla also faced criticism from some customers who complained about quality issues with their cars.
Tesla’s slump weighed on the S&P 500 and Nasdaq futures, which fell 0.4% and 0.7%, respectively. However, some analysts argued that Tesla’s dip could be a sign of trouble or a buying opportunity, depending on how you look at it.
On one hand, Tesla’s decline could reflect its high valuation relative to its peers and its exposure to cyclical factors such as chip shortages and supply chain disruptions. On the other hand, Tesla’s drop could also create an attractive entry point for long-term investors who believe in its innovation and growth potential.
Key Earnings: JPMorgan Chase Leads with Strong Results
JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup © kicked off earnings season with strong results that beat expectations on both revenue and earnings per share. JPM stock is extended from a base, but is pausing at the top of a two-year consolidation.
BofA stock is around possible entries after breaking out of a cup-with-handle base with a buy point of 34.50. Wells Fargo stock is also near its buy point in an I-Bullish Cup with handle formation at 42.50.
Citigroup stock is in an I-Bullish Cup with handle base at 72.50 with a buy point of 75.50.
UnitedHealth Group (UNH) stock is in an I-Bullish Cup with handle base at 450 with a buy point of 460.
Delta Air Lines (DAL) stock is in an I-Bullish Cup with handle base at 100 with a buy point of 105.
The stock market rally showed resilience after a volatile morning following a hotter-than-expected CPI inflation report and the launch of Bitcoin ETFs. The Dow Jones hit a record high soon after the open while the S&P 500 set a 52-week best. But the major indexes reversed solidly lower, only to rebound to close essentially flat.
Some stocks flashed buy signals amid strong earnings results from JPMorgan Chase and other banks. Others faced pressure from Bitcoin ETFs that caused bitcoin stocks to slide lower.
Tesla’s slump weighed on the S&P 500 futures but some analysts saw it as an opportunity to buy into its long-term prospects.