Apple, The Dollar And Overnight Trading – What We Learned From Today’s Wild Ride: S&P 500 Futures | Stock News & Stock Market Analysis

Investors should follow the action of the major averages and leading stocks. So what did they tell us on Thursday? 1. The dollar is a big market driver, especially for multinationals. 2. Apple (AAPL) and a slew of iPhone-related stocks continue to lag and break key technical levels. 3. Overnight trading does not always translate to regular-session trades.

X S&P 500 index futures and Nasdaq 100 futures rose about 0.1% vs. fair value.

Dollar Drives Stocks

Stocks opened higher in Thursday’s market trading in part on overnight comments by Treasury Secretary Steven Mnuchin that he supports a weaker dollar, sending the greenback to a fresh three-year low. But President Trump told CNBC on Thursday afternoon that Mnuchin’s comments were taken out of context and sees the dollar strengthening. That sent the dollar higher, closing little changed. The major averages pulled back on Trump, then steadied at the close along with the currency.

A weaker greenback makes U.S. exports more competitive and flatters companies’ overseas profits in dollar terms. So shares of U.S. companies with big exposure to foreign markets tend to do better with a falling dollar.

Apple, iPhone Ecosystem Struggle

Apple’s relative weakness has been a steady theme in the evening Stock Market Today column. A day after falling below a recent flat-base buy point in heavy volume, Apple slid 1.8% to 171.11 on mounting concerns over iPhone X demand. The stock closed modestly below its 50-day moving average. Meanwhile, the relative strength line, which tracks a stock’s performance vs. the S&P 500 index, slumped to its worst level since July. (The RS line is the blue line in the chart below.)

That underperformance is magnified by the action of iPhone-related stocks.

Broadcom (AVGO) fell below its 200-day moving average for the first time in nearly two years, joining fellow iPhone chipmakers Skyworks Solutions (SWKS) and Qorvo (QRVO). All three stocks’ RS lines are at 52-week lows.

Universal Display (OLED), which makes technology used in making OLED screens for high-end phones like the iPhone X and other devices, tumbled 5.7% to 168.25. That’s part of a 19% five-day sell-off, taking Universal Display plunging below a buy point and its 50-day moving average. That follows another failed OLED-related breakout: laser maker Coherent (COHR).

Extended Trading Isn’t Regular Trading

There’s an old Russian proverb that morning is wiser than the evening. That’s certainly something to keep in mind with after-hours action. In the midst of earnings season you’ll see dozens of stocks soaring or tumbling after the market close or before the opening bell. Sometimes that carries over to the next regular trading session, but sometimes the action is radically different.

There are many reasons why. Extended trading, even when relatively heavy, is thin compared with activity in regular exchange hours. Investors may miss key details initially that are picked up on later. Companies sometimes hold conference calls the next morning or after the opening bell.

In late trading Wednesday, Lam Research (LRCX) and Xilinx (XLNX) rallied on earnings and looked set to at least test buy points. But after opening higher, the chip stocks reversed sharply lower, both closing down about 5%.

Keep that in mind ahead of Friday’s regular session. Several different chip stocks, including industry giant Intel (INTC), rallied in extended trading on their earnings reports. That’s a hopeful sign for Friday’s session, but no guarantee.


The Big Picture: Blue Chips Advance, But Breakouts Sparse

3 China Names In Buy Range; Can You Find The Strengths, Flaws?

Where To Look For Dominance In The Stock Market

Highflying New Issue Looks To Add To Its Big 2017 Post-IPO Gains

Intel Rises Late On Strong Earnings, Guidance


Source link

Originally posted 2018-01-26 02:51:42.


No comments.

Leave a Reply

error: Content is protected !!