Stock market indexes are running in place in quiet trading Tuesday afternoon while investors await Wednesday's June inflation report. The Dow Jones Industrial Average is leading broad-based benchmarks, gaining 0.3%. The S&P 500 has crisscrossed the flat line multiple times and is now nearly flat, lower by less than 0.1%. The Nasdaq composite is telling a similar tale, down slightly at this hour.
Market volume is mixed across major benchmarks, compared to the same time in Monday's session, despite meager gains. Nasdaq volume has fallen 1.60% while NYSE is showing a 15.01% volume spike.
Overnight, the euro vs. U.S. dollar fell to "parity" for the first time since 2002. Parity means one euro is worth one dollar. German recession fears are driving much of the selling pressure.
West Texas Intermediate crude oil has sold off more than 7%, signaling growing concern in the futures pits about demand destruction.
SPDR Energy Select Sector Fund is trading lower by more than 2% in sympathy with falling crude prices. The ETF has been losing relative strength at a rapid pace since mid-June, when it hit an all-time high. It is testing the 200-day moving average.
Gap Inc. has sold off 3.1% and is testing March 2020's pandemic low after a Wells Fargo downgrade and CEO resignation.
IBD 50 component Corcept Therapeutics has sold off back into the buy point after last week's breakout above the April entry at 25.78. A pullback into new support can provide a second-chance entry for traders who missed the first opportunity.
Inflation And Q2 Earnings: Calm Before The Storm
Low stock-market volume after Independence Day signals the start of the summer doldrums. It also points to growing investor caution, ahead of this week's key events.
Just a handful of companies are scheduled to report earnings into Friday's close but commercial bank results often trigger large-scale rotation between stocks, bonds, currencies and other assets. Forward guidance on third quarter and fiscal year margins should be primary market movers, as fund managers pull out spreadsheets and reevaluate second half and 2023 assumptions.
Citigroup and Dow component JPMorgan Chase should carry greater weight than Wells Fargo in this analysis due to their larger international footprints.
Delta Air Lines is expected to post a profit of $1.65 per share in Wednesday's premarket earnings release. That would mark a major turnaround, compared to the $1.07 loss posted in the same quarter in 2021.
Airline stocks have acted poorly since April, despite outstanding passenger counts, because soaring fuel costs are cutting into margins. Analysts also worry that high prices will force customers to cancel future travel plans to raise cash for day-to-day essentials. On the bright side, the current oil decline could mark a bottom for the energy sector.
Tuesday Stock Market Highlights
IBD 50 component Monster Beverage is consolidating less than two points below the 98.83 buy point. The stock has never traded in triple digits, so a breakout could be significant. MNST shows a rock-solid 98 Composite Rating, as well as A-rated Acc/Dist. and SMR Ratings.
Acadia Healthcare has lifted within three points of the 76.79 buy point in a three-month consolidation pattern and has just hit a 52-week relative strength high. ACHC's 93 Composite Rating and A-rated Group RS make this an excellent stock to watch in coming sessions.
Invesco Solar is trading lower for the second day after meeting resistance at the 200-day moving average, losing 3.4%. Market timers are dumping solar stocks in reaction to the sharp decline in crude oil prices. Solar is a less attractive alternative energy when fossil fuel prices drop.
Please follow Alan Farley on Twitter @msttrader for daily stock market action.
