Stock Market Recap: Tuesday, Jan. 26, 2021
Wall Street was tentative throughout while trading in tight ranges as investors braced for a number of high-profile earnings and the start of the Federal Reserve’s two-day policy meeting — and more in Tuesday’s stock market recap.
The major indexes closed lower across the board with the Dow extending its losing streak to four sessions while the S&P managed to test a fresh intraday all-time high.
Stock Market Recap
The Nasdaq was down 0.1% after testing a low of 13,603.
The Dow also slipped 0.1% following the intraday pullback to 30,921.
The S&P 500 dipped 0.2% despite tagging a record high of 3,870.
The Russell 2000 fell 0.6% with the midday low reaching 2,146.
Communication Services and Real Estate led sector strength with gains of 1.4% and 1%, respectively. Energy and Materials were the weakest sectors after falling 2.1% and 1.4%.
Stock Market Movers
Shares of Beyond Meat Inc. (Nasdaq: BYND) jumped 17% after announcing a joint venture with PepsiCo Inc. (Nasdaq: PEP) to develop, produce and market innovative snack and beverage products made from plant-based protein. The joint venture will leverage Beyond Meat’s technology in plant-based ingredients and PepsiCo’s marketing and commercial capabilities to create and scale new snack and beverage products.
Stock Market Outlook
Boeing Co. (NYSE: BA) announces earnings ahead of Wednesday’s opening bell and its results will have a major impact on the Dow as it is the eighth-most heavily weighted component in the index. The company is expected to report a loss of -$1.80 a share on revenue of $15.07 billion. The high estimate is at -$0.38 a share with the low forecast at -$3.52 a share and would equate to a $1.42 beat or a -$1.72 miss.
The company beat forecasts in the past quarter by $1.13, while missing by -$2.25, -$0.09 and -$3.80 in the previous three quarters. There are 24 analysts that cover the stock with seven Strong Buy ratings, 12 Buys, five Hold recommendations.
Global Economy
From the global stock market recap, European markets settled higher.
Germany’s DAX 30 rallied 1.7% and the Belgium20 rose 1%. France’s CAC 40 gained 0.9% and the Stoxx 600 advanced 0.6%. The UK’s FTSE 100 edged up 0.2%.
Asian markets closed mostly lower as China/U.S. tensions weighed on sentiment. China said it will conduct military exercises in the South China Sea this week — days after a U.S. aircraft carrier was spotted in the disputed waters.
Hong Kong’s Hang Seng sank 2.6% and South Korea’s Kospi dropped 2.1%. China’s Shanghai tanked 1.5% and Japan’s Nikkei fell 1%. Australia’s S&P/ASX 200 added 0.4%.
U.S. Economy
Consumer confidence was up 2.2 points to 89.3 in January versus the -5.8 point drop to 87.1 in December. The strength was in the expectations component which improved to 92.5 after rising to 87 previously. The present situations index fell to 84.4 after plunging-18.7 points to 87.2 last month. The labor differential fell further to -3.2 following December’s -8.8 point drop to -1.9 previously. The one-year inflation gauge ticked down to 5.8% after rising to 6% in December.
Chain store sales posted a -2% month-over-month decline in the week of Jan. 23, versus the -2.5% drop for the first two weeks of January. Compared to the same period last year, sales accelerated to a 2.7% year-over-year clip compared to the prior 2.2% rate. January sales are projected to rise 3.4% year-over-year, but decline -1.3% versus December.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the first time in three sessions after tapping a low of $152.92. Current and upper support at $153-$152.50 was breached but held. A move below the latter would signal a retest towards $151.50-$151.
Resistance is at $153.50-$154.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) had its two-session winning streak snapped following the intraday backtest to 22.55. Current and upper support at 23-22.50 was recovered. A close below the latter and the 50-day moving average would indicate a retest towards 21.50-21.
Resistance is at 24-24.50.
Stock Market Analysis
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the second time in six sessions despite tagging an intraday peak of $250.21. Current and lower resistance at $250-$250.50 was breached but held. A close above the latter and Monday’s all-time peak at $250.70 would signal strength towards $251.50-$252.
Support is at $248.50-$248 followed by $245.50-$245.
RSI is showing signs of rolling over with key resistance at 70 holding. A move above this level would suggest additional strength towards 75-80 and overbought highs from early September. Support is at 65-60.
Sector
The Energy Select Sector SPDR Fund (NYSE: XLE) extended its losing streak to four sessions after tagging a low of $40.73. Key support at $41 was breached and failed to hold. Continued closes below this level would suggest additional weakness towards $40-$39.50 and the 50-day moving average.
Resistance is at $42-$42.50.
RSI remains in a downtrend with key support at 50 failing to hold. Continued closes below this level would signal weakness towards 45-40 and the early-November lows. Resistance is at 55-60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.