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Futures

Dow Jones, Futures Mixed as Tesla Loses on Musk Pay Rejection

2024-12-03

The Dow Jones Industrial Average and other major indexes witnessed a mixed trading trend on Tuesday as Wall Street responded to the morning's employment data. Tesla (TSLA), a prominent player in the market, faced early losses after a Delaware judge rejected its 2018 pay package. This event had a significant impact on the stock's performance.

Early Market Movements and Key Indicators

After the opening bell, the Dow Jones Industrial Average dropped by 0.2%, while the S&P 500 saw a slight decline of 0.1%. In contrast, the tech-heavy Nasdaq composite managed to gain 0.1% in morning trades. The 10-year Treasury yield also ticked lower to 4.18%, and oil prices climbed, with West Texas Intermediate futures trading around $69.20 per barrel. Among exchange traded funds, the Invesco QQQ Trust (QQQ) rose 0.1%, while the SPDR S&P 500 ETF (SPY) was down modestly after the open.

Tesla's Setback

Tesla skidded 1% on Tuesday following a late Monday decision by Delaware Judge Kathaleen McCormick. The judge stuck with her January decision that Tesla's board was overly influenced by Elon Musk when awarding the original pay deal in 2018. At that time, the pay deal was worth approximately $56 billion. This setback had a direct impact on Tesla's stock price and market sentiment.

Economic Data and Job Openings

On the economic front, the U.S. Labor Department's Job Openings and Labor Turnover Survey (JOLTS report) showed job openings at a rate of 7.744 million. The report was expected to show job openings at a 7.49 million rate in October, slightly higher than the previous month's 7.443 million. This data provides insights into the labor market and its potential impact on the stock market.

Stock Market Movers and Earnings

Key earnings movers on Tuesday morning included Credo (CRDO) and Zscaler (ZS). Credo soared 36%, while Zscaler stock plunged more than 5% in early trading. Elsewhere, AT&T (T) jumped 3.5% after the company announced its expectations of free cash flow to be more than $18 billion in 2027. Shares closed Monday in the buy range above a 22.34 flat-base entry.

Stock Market Leaders and Notable Moves

Among the best companies to watch on the stock market today are Embraer (ERJ), Cloudflare (NET), TJX (TJX), and Tradeweb Markets (TW). Dow Jones components making notable moves were Amazon.com (AMZN), Apple (AAPL), Microsoft (MSFT), and Sherwin-Williams (SHW). Apple featured in the Stocks Near A Buy Zone column. There was one new stock on IBD MarketSurge's "Breaking Out Today" list Friday, namely Apple. To find additional stock ideas, one can check IBD Stock Lists like IBD 50, Big Cap 20, and Stocks Near A Buy Zone.

Industry Group and IPOs

This industry group and 4 IPOs have polished 20 "perfect" gems. Dow Jones leader Sherwin-Williams is breaking out past a 392.57 buy point in a flat base, with shares adding 0.1% on Tuesday. Outside the Dow Jones index, Cloudflare has broken out in recent weeks, topping a 99.17 buy point in a cup with handle. The 5% buy zone runs up to 104.13, but shares are just out of buy range following Monday's rally. Embraer is in buy range above an alternative entry at 39.46 and is a recent IBD Stock Of The Day, with shares down 0.6% early Tuesday. Retailer TJX is above a 121.13 flat-base entry following strong gains, and its stock inched up 0.2% in early Tuesday trading. Finally, Tradeweb closed Monday just below a 136.13 entry in a flat base, but its stock gained 0.6% in morning action on Tuesday.

Magnificent Seven Stocks and Their Movements

Among Magnificent Seven stocks, Alphabet (GOOGL) edged higher after the opening bell. Shares have plunged below their 50-day line in recent weeks but are now rebounding. Meta Platforms (META) is rapidly approaching a flat base's 602.95 buy point, with shares ticking up 0.5% on Tuesday. Among Dow Jones components in the Magnificent Seven, Amazon stock rallied sharply in recent sessions, decisively retaking a 201.20 buy point and adding 0.5% in early trading on Tuesday. Shares of Apple are breaking out above a flat base's 237.49 entry, with the stock up 0.5% on Tuesday morning. Microsoft shares gained 0.2% on Tuesday morning, reclaimed its 50-day line, a key level to watch during recent gains. Nvidia stock rose 0.5% on Tuesday, with the artificial intelligence titan looking to rebound following a sharp pullback over the last few trading sessions. Shares are bouncing from their 10-week moving average line, an important area to watch, which places Nvidia stock in a new buy area.Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on growth stocks, the Dow Jones Industrial Average, and the stock market today.

Feeder cattle futures opened higher on Monday, reaching new highs before reversing and falling back. Some of the selling could be attributed to the market being overbought. Additionally, news of Cargill cutting 5% of its workforce due to shrinking profits also played a role. Some of these cuts will be in the meat processing division, which has pressured margins. However, this may not have a significant impact on overall beef processing in the nation but was enough to trigger some selling as traders reacted to the news. Despite this, the bullish aspect of the cattle herd and tight supplies remains unchanged. Boxed beef prices were higher, with choice up $2.49 and select up $2.70, indicating strong consumer demand. Traders are cautious though, given the amount of cattle purchased for deferred delivery last week. The Commodity Futures Trading Commission's (CFTC) Commitments of Traders report showed fund traders adding 6,497 long futures positions in live cattle, bringing their net-long total to 118,350 contracts. They also increased their net-long positions in feeder cattle by 3,036 contracts to a net-long position of 15,467 contracts.

Market Reactions and Opportunities

The market's reaction to the news of Cargill's job cuts in the meat processing division might have been a short-term knee-jerk response rather than a long-term impact. Feeder cattle futures were overbought, and Monday's weakness could have triggered a liquidation phase. However, it's important to note that the cattle market was overbought and needed to correct. This weakness could potentially be seen as a buying opportunity as cattle numbers remain tight. Packers may not be as aggressive this week as they were able to purchase cattle for deferred delivery last week. They might continue to reduce the slaughter pace to improve margins.Hog futures continue to make new contract highs as traders trade the trend. Hog supplies do not seem as plentiful as reported earlier this year. Hog futures again find themselves at a record net-long position. Any bearish indication might trigger substantial selling. Packers are maintaining a strong slaughter pace to keep up with demand and improve packer margins. They have been able to purchase sufficient hogs for increased processing speed without difficulty, which may limit what they will pay for hogs.For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.Hog Futures: Strong Buying and Market OutlookHog futures witnessed strong buying interest on Monday, reversing the losses from Friday and pushing June through October to new contract highs. Both June and July closed above $102, indicating that traders remain bullish on the market as we move into the end of the year and through 2025. Packers were aggressive as they needed to meet demand and continue to maintain a strong slaughter pace. The National Direct Afternoon Hog report showed cash up $0.18, with greater packer interest expected on Tuesday. Cutouts showed strong gains, with values up $2.35. December is generally a strong month for demand, and this year may be no exception. Hog numbers also seem to be tighter than reported earlier. The CFTC's Commitments of Traders report showed fund traders increasing their net-long position by 7,074 contracts to a total of 130,169 futures contracts and a record net-long position.The hog market shows promising signs with strong buying and continued upward momentum. Traders are optimistic about the future, and the tight supply situation is likely to support prices. Packers' efforts to meet demand and maintain a high slaughter pace are crucial factors in the market's stability. As we move forward, it will be interesting to see how these trends continue to unfold and what impact they will have on the overall livestock industry.For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

The National Association of Broadcasters has announced that applications are now open for exhibitors to participate in Futures Park. This unique showcase for cutting-edge research and development in broadcast, media, and entertainment technology will be a centerpiece at the 2025 NAB Show in Las Vegas from April 6-9. Reserved exclusively for technologies not yet commercially available, Futures Park provides an exclusive platform for trailblazing researchers and developers to present their groundbreaking work. Sam Matheny, NAB executive vice president and chief technology officer, emphasizes that it is a hub for technology innovation at the show. Universities, research institutes, companies, and organizations are invited to present and demonstrate new technologies still under development, including those with significant improvements or enhancements. Relevant open standards developments, media education programs, and other noncommercialized media-related items of interest are also eligible for display. NAB will supply complimentary exhibit space, including booth carpeting, pipe and drape separating contiguous booths, and basic identifying signage. All other exhibit-related expenses are the responsibility of the applicants. A 10-by-10-foot booth is the typical exhibit space size, but additional space requests can be accommodated on a case-by-case basis. Complete information on exhibiting at Futures Park can be found here, and applications can be submitted using this form no later than Jan. 10. The NAB Show is the professional video industry's #1 source for news, trends, and product and tech information. Sign up below to stay updated. NAB Show will take place in the West Hall of the Las Vegas Convention Center from April 6-9 (education sessions from April 5-9). To preregister, click here. To learn more, visit NABShow.com.

Why Futures Park is a Game-Changer

Futures Park holds immense significance in the world of broadcast, media, and entertainment. It serves as a platform where innovative ideas can take center stage and shape the future of these industries. By allowing trailblazing researchers and developers to showcase their work, it offers a glimpse into the technologies that will revolutionize the way we consume and produce media. This exclusive area provides a unique opportunity for industry professionals to stay ahead of the curve and explore the latest advancements. It is not just about presenting new technologies; it is about fostering collaboration and driving innovation. The fact that NAB is supplying complimentary exhibit space makes it even more accessible for exhibitors to showcase their work. This initiative by the National Association of Broadcasters is a testament to their commitment to pushing the boundaries of technology in the broadcast and media sectors.

Benefits for Exhibitors

Exhibiting at Futures Park comes with several benefits. Firstly, it gives exhibitors the chance to present their new technologies to a highly targeted audience of industry professionals. This exposure can lead to valuable partnerships and collaborations. Secondly, the complimentary exhibit space helps to reduce the financial burden on exhibitors, making it more feasible for smaller companies and research institutions to participate. Additionally, being part of Futures Park allows exhibitors to gain recognition and credibility in the industry. It showcases their commitment to innovation and their role in shaping the future of broadcast, media, and entertainment. The ability to demonstrate new technologies in a live setting also provides a more immersive experience for attendees, allowing them to see and interact with the innovations firsthand.

Impact on the Industry

The impact of Futures Park on the industry is significant. It acts as a catalyst for innovation by bringing together researchers, developers, and industry professionals. This convergence of minds leads to the exchange of ideas and the development of new solutions. The showcase of noncommercialized technologies in Futures Park can inspire other companies and organizations to invest in research and development, further driving innovation in the field. It also helps to bridge the gap between academia and industry by providing a platform for researchers to present their work and receive feedback from industry experts. This interaction can lead to the commercialization of promising technologies and the creation of new business opportunities. Moreover, Futures Park helps to raise awareness about the latest advancements in broadcast, media, and entertainment technology, which can benefit consumers by providing them with access to more innovative and high-quality products and services.