You are currently viewing Dow Jones Futures Rise On Credit Suisse Deal; First Republic Plunges 20% On Credit Downgrade

Dow Jones Futures Rise On Credit Suisse Deal; First Republic Plunges 20% On Credit Downgrade

Dow Jones futures rose Monday morning as a correcting stock market braces for an important week of Federal Reserve news. European markets edged higher after UBS (UBS) agreed to buy Credit Suisse (CS) in a bid to restore confidence in the banking system. Meanwhile, First Republic Bank (FRC) plunged 20% on a credit rating downgrade.


Over the weekend, Swiss regulators brokered a deal for UBS to buy rival Swiss bank Credit Suisse for 3 billion Swiss francs ($3.24 billion), a substantial discount to Credit Suisse’s $8 billion market cap on Friday. UBS shares reversed from losses to rise 1% in premarket trade, while CS American depositary receipts crashed 58%.

The SPDR S&P Regional Bank ETF (KRE) rose 1.3%. First Republic dived 20% after a credit rating downgrade. S&P Global downgraded the bank into junk status, saying the recent $30 billion infusion may not solve its liquidity issues. Western Alliance (WAL) jumped nearly 12%, while Keycorp (KEY) was up 1.9%.

Among larger banks, U.S. Bancorp (USB) climbed more than 3% after Baird upgraded the stock to outperform, from neutral. The note set a price target at 52 —almost 58% above where shares closed on Friday.

Fed Meeting

The Federal Reserve’s two-day meeting kicks off Tuesday, with views on the probable rate strategy vacillating. As of Monday morning, odds of a quarter-point Fed rate hike Wednesday were at 62%. Instead of more future rate hikes, Wall Street now sees the Fed shifting to rate cuts starting by July, if not sooner. By the end of the year, markets expect the federal funds rate to fall below 4%.

The banking crisis may have have upended the Fed’s plan to keep interest rates higher for longer.

Foot Locker (FL) and Pinduoduo (PDD) were earnings movers Monday morning.

FL stock gained 1.2% in morning trade after its report. Pinduoduo shares tumbled 13% on weaker-than-expected Q4 revenue results.

Stock Market Today

Electric-vehicle leader Tesla (TSLA) traded 1% lower Monday morning. Also, Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were up and down ahead of today’s stock market open.

Chip leader Advanced Micro Devices (AMD), IBD SwingTrader stock Meta Platforms (META) and IBD Leaderboard Palo Alto Networks (PANW) — as well as Dow Jones stocks Nike (NKE) and Salesforce (CRM) — are among the top stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard watchlist stock. AMD featured in Wednesday’s IBD Screen Of The Day. And Nike was featured in last week’s Stocks Near A Buy Zone column. Meta is an IBD SwingTrader stock.

IBD’s latest newsletter MarketDiem gives you actionable ideas for stocks, options and crypto right in your inbox

Dow Jones Today: Oil Prices, Treasury Yields

Ahead of Monday’s opening bell, Dow Jones futures rose 0.5% vs. fair value, while S&P 500 futures gained 0.4%. The Nasdaq 100 futures, which do not track financials, traded up 0.3% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.3% and the SPDR S&P 500 ETF (SPY) moved up 0.4% early Monday.

The 10-year U.S. Treasury yield dived to 3.39% Friday, ending with big weekly loss as investors packed into the safe-haven bond market amid the ongoing banking crisis. On Monday, the 10-year Treasury yield rose to 3.44% in early trade, near its lowest levels since September 2022.

U.S. oil prices continued lower following last week’s 13% dive. West Texas Intermediate traded below $66 a barrel early Monday, down 1.5%, its lowest level since September 2021.

Stock Market Correction

On Friday, the Dow Jones Industrial Average sold off 1.2% and the S&P 500 lost 1.1%. The Nasdaq composite declined 0.7%.

Friday’s Big Picture column commented, “The stock market ended the week on the ropes amid a painful bear attack on quadruple-witching day. Next week will be key in finding out whether indexes can fight back — or get clobbered to the canvas.”

Now is an important time to read IBD’s The Big Picture column amid the ongoing stock market correction.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Watch: Nike, Salesforce

Since bottoming on Oct. 3, Nike shares have rallied as much as 59% to their recent high at 131.31. Now the stock is consolidating within a flat base that offers a 131.41 buy point, according to IBD MarketSmith pattern recognition. NKE stock moved down 0.2% early Monday.

Following recent declines, the stock remains below its 50-day moving average, a key benchmark. A decisive retake would be bullish for the base-building prospects, carving the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

In recent weeks, Dow Jones leader Salesforce showed big upside strength after strong fourth-quarter results. The stock above a 178.94 cup-with-handle entry after last week’s big gains. Still, the market is in a correction, so investors should avoid new purchases until the market environment improves. CRM stock lost 0.2% early Monday.

3 Top Growth Stocks To Watch In The Stock Market Correction

Top Stocks To Watch: AMD, Meta, Palo Alto

Advanced Micro Devices broke out past an 89.04 buy point in a flat base last week and has a solid 10% cushion above the entry. The 5% buy range that topped out at 93.49. AMD featured in Wednesday’s IBD Screen Of The Day column. AMD stock fell 0.6% Monday morning.

Backstory: In early February, the chipmaker reported stronger-than-expected data center chip sales in the fourth quarter. But AMD tempered that news with a soft outlook for the current period.

Facebook-parent Meta Platforms gave up a flat base’s 197.26 buy point during Friday’s 4.55% decline. Still, last week’s breakout attempt was a sign of strength with the general market’s weakness. Meta shares were up 0.25% Monday morning.

Backstory: Like social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as clients squirm over macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions of dollars on a risky bet to build the “metaverse,” a virtual reality world that has yet to take hold.

IBD Leaderboard stock Palo Alto Networks is trading just short of a cup-with-handle’s 192.94 buy point after Friday’s 0.3% drop. PANW stock traded down 0.3% Monday.

Backstory: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

Learn How To Time The Market With IBD’s ETF Market Strategy

Stocks To Watch In Stock Market Correction

These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Buy Point
Meta Platforms (META) 197.26 Flat base
Nike (NKE) 131.41 Flat base
Palo Alto Networks (PANW) 192.94 Cup with handle
Salesforce (CRM) 178.94 Cup with handle
Source: IBD Data As Of March 20, 2023

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla Stock

Tesla stock dropped 2.2% Friday, trading back and forth as it continues to hold above its key 50-day moving average. Shares closed Friday around 53% off their 52-week high.

TSLA stock fell 1% Monday morning, as it threatened to extend Friday’s losses.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.55% Friday, ending a four-day win streak that saw them rebound from their long-term 200-day line. AAPL rose 0.1% Monday morning.

Microsoft shares broke out above a flat base’s 276.86 buy point Friday, rising 1.2%. The buy zone goes up to 290.70. MSFT stock fell 0.3% early Monday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


Top Growth Stocks To Buy And Watch

Learn How To Time The Market With IBD’s ETF Market Strategy

Find The Best Long-Term Investments With IBD Long-Term Leaders

MarketSmith: Research, Charts, Data And Coaching All In One Place

How To Research Growth Stocks: Why This IBinvesD Tool Simplifies The Search For Top Stocks

Source link

Leave a Reply