Banking Crisis Intensifies Ahead of CPI Inflation Report; Schwab in brief

Dow Jones futures were higher ahead of Tuesday’s open as the banking crisis continues to deepen, with two major bank failures in recent days – SVB Financial (SIVB) and Signature Bank (SBNY). Meanwhile, Schwab stock plunged 11% on Monday on growing liquidity fears, while Tesla stock rose after the company ramped up hiring at its Gigafactory in Texas. And GitLab crashed 36% behind earnings.


Financial crisis

The SPDR S&P Regional Banking (KRE) ETF plunged more than 12% on Monday, even after paring some losses. That’s on top of the 16% loss he suffered last week.

Regional bank First Republic (FRC) fell nearly 62%. Key Corp (KEY) plunged 27.3%. And western alliance (WAL) collapsed 47%.

Charles Schwab (SCHW) plunged into fears that the largest US brokerage would have to sell some of its bond holdings to cover deposit withdrawals. The fall in Schwab stock to its worst moment of the day would be the largest percentage decline on record (based on data dating back to September 23, 1987), according to Dow Jones.

The big American banks were not spared from the sale either, with Bank of America (BAC), JPMorgan Chase (JPM) and Wells Fargo (WFC) down 5.8%, 1.8% and 7.1%, respectively.

CPI inflation report, income

On the economic front, eyes will be on the consumer price index on Tuesday. The CPI should rise by 0.4%, both overall and excluding food and energy. This would bring the headline CPI inflation rate down to 6% from 6.1% in January, with the core inflation rate declining to 5.5% from 5.6%.

Wall Street suddenly sees a good chance that the Federal Reserve will suspend its rate hike campaign at next week’s meeting, with the failure of three banks fueling concerns about broader financial sector strains.

Half-point moves are off the table – just a week after Fed Chairman Jerome Powell signaled policymakers were ready to reaccelerate rate hikes at next week’s meeting compared to the pace of a quarter point in February.

Today, a sharp drop in Treasury yields signals sudden doubts about the strength of the economy. Even if the Fed doesn’t take a break next week, markets are betting that rate cuts are imminent.

On the earnings side, GitLab (GTLB) fell 36% in extended trading after the company’s weaker-than-expected revenue forecast.

Earnings continue to flow as the season ends this week. Among them are Academy Sports and Outdoors (ASO), Adobe (ADBE), General dollar (DG), fedex (FDX), five below (FIVE) and Lennar (LEN).

stock market today

On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq composite climbed 0.45% in a volatile trading day.

Electric vehicle giant You’re here (TSLA) was trading down 0.6% on Monday. Among Dow Jones stocks, Apple (AAPL) increased by 1.3% and Microsoft (MSFT) climbed 2.1% in today’s trading action.

Social media giant Metaplatforms (META), IBD Ranking Watchlist Stock Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (OF) and Selling power (CRM) – are among the top stocks to watch during the new stock market correction.

Palo Alto is an IBD Leaderboard watchlist stock. New Relic was recently an IBD Stock of the Day. And Nike was featured in this week’s Stocks Near A Buy Zone column.

3 most important growth stocks to buy and watch in the currentrent Stock market correction

Dow Jones Futures Today: Oil Price, Treasury Yields

Before Tuesday’s opening bell, Dow Jones futures were up 0.5% and S&P 500 futures were up 0.6%. Nasdaq 100 futures are up 0.65% from fair value. Remember that overnight action on futures contracts on Dow Jones and elsewhere does not necessarily translate into actual trading in the next regular trading session.

The 10-year U.S. Treasury yield plunged to 3.51% on Monday as safe-haven trading pushed bonds higher following the SVB’s collapse. Oil prices soared on Monday after Friday’s brief rebound. West Texas Intermediate futures fell nearly 3%, trading below $75 a barrel.

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What to do in the new stock market correction

Now is an important time to read IBD’s The Big Picture column with the stock market trending back into a “correcting market” after heavy losses in recent sessions.

Friday’s Big Picture column commented: “IBD changed its market outlook to ‘uptrend under pressure’ on Thursday. And after Friday’s selloff, we have further reduced our outlook, to ‘market in correction’. This forces investors to avoid buying stocks altogether and turn to defensive trading, such as taking profits and cutting losses.”

(Check out IBD stock listings like the IBD 50 and stocks near a buy zone, for additional stock ideas.)

Five Dow Jones stocks to watch now

Dow Jones stocks to watch: Nike, Salesforce

Since the Oct. 3 low, Nike shares are up 59% to their recent high at 131.31. Now the stock is consolidating within a flat base that offers a buy point of 131.41, according to IBD MarketSmith pattern recognition.

Amid recent weakness, the stock is below its 50-day moving average, a key benchmark. A decisive rally would be bullish for the basic construction outlook, sculpting the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

Over the past few weeks, Dow Jones leader Salesforce has shown great upward strength after strong fourth quarter results. But those gains have mostly faded amid recent market weakness, and now the stock is back below a 178.94 cup entry with a handle. Still, the stock’s recent strength is reason to watch the software leader in upcoming sessions.

Top stocks to watch: Meta, Palo Alto, New Relic

Meta Platforms, Facebook’s parent company, is quietly building a flat base with a buy point of 197.26 after an earnings-fueled price surge in February. Stocks are around 8% away from the last buying point, as they rose 0.8% on Monday.

Pass: Like its social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as customers struggle due to macroeconomic concerns, recession fears and rising interest rates. It comes as he spends billions on a gamble to build the “metaverse”, a virtual reality world that has yet to take root.

Watchlist IBD Leaderboard Palo Alto Networks stock continues to trade quietly in a handful after the stock rose 12.5% ​​on Feb. 22. Stocks remain within striking distance of the 192.94 one-basis buy point. On the upside, the stock’s relative strength line hits new highs, with the stock significantly outperforming market averages. PANW stock traded down 0.1% on Monday.

Pass: On February 21, the cybersecurity giant announced strong results for the quarter ended January, which saw earnings hit $1.05 per share, up 81% from a year earlier, with an increase 26% of its revenue to $1.7 billion.

The recent IBD Stock Of The Day, New Relic, is working on a flat basis with a buy point of 80.98 following the February 8 earnings fueled surge. The RS line is holding up for now. NEWR stock fell 0.7% on Monday.

Pass: New Relic provides a suite of cloud-based software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help them make data-driven decisions.

Join IBD experts as they analyze the top stocks of the current market correction on IBD Live

Tesla Stock

Tesla stock rose 0.6% on Monday as it continues to see some support around its 50-day moving average line. Shares closed Monday about 55% off their 52-week high.

On Tuesday, China’s weekly EV insurance registration data could be an important indicator of demand for Tesla in the world’s biggest EV market, which is in the midst of a massive price war launched by Tesla.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, shares of Apple rose 1.3% on Monday, ending a two-day losing streak and finding support at the long-term 200-day line.

Microsoft shares recovered to the upside of their 200-day line on Monday’s 2.1% jump. The stock is still around 20% off its 52-week high after recent declines.


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