Dow Jones Futures: Dow Stocks Microsoft, McDonald’s, Verizon, Intel Teach Bear Market Lesson

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Dow Jones futures fell Tuesday evening in volatile action, along with S&P 500 futures and Nasdaq futures, after U.S. stock markets were closed for Christmas Day. The Dow Jones is on the verge of a bear market. The Nasdaq composite, Russell 2000 and the S&P 500 index already have crossed into a bear market territory. McDonald’s stock, Verizon stock, Microsoft stock and Intel stock all boast relative strength lines that are rising or hitting all-time highs. But they really show how weak the S&P 500 index is.

McDonald’s (MCD), Verizon Communications (VZ), Microsoft (MSFT) and Intel (INTC) are all Dow Jones stocks and S&P 500 index members.

Dow Jones Futures Today

Dow Jones futures fell 0.4% vs. fair value after tumbling far more than 1% just a few minutes earlier. S&P 500 futures sank 0.4%. Nasdaq 100 futures were off 0.4% vs. fair value. Dow futures and other overnight action often don’t carry over to actual trading in the next regular session. That’s been true during the stock market correction, especially in the dive toward bear market country. Dow Jones futures will show gains for much of the overnight session, perhaps signaling modest losses before the open, but nothing to indicate the vicious stock market sell-offs.

Trump Expresses Confidence In Fed, And More Criticism

President Donald Trump expressed confidence Tuesday in the Federal Reserve following a recent report that he’d discussed firing Fed Chairman Jerome Powell. But he was still critical of Fed rate hikes.

“They’re raising interest rates too fast,” Trump said. “That’s my opinion. I certainly have confidence. I think it will straighten. They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon.”

Trump also expressed confidence in Treasury Secretary Steven Mnuchin.

Dow Jones Stock Market Correction Almost A Bear Market

The Dow Jones is 19.1% off its peak, on the verge of the 20% bear market threshold. The S&P 500 index plunged Friday to close just in bear market territory, after the Nasdaq composite tumbled into a bear market last week. The S&P 500 index has fallen at least 1.5% in the last four sessions and five of the last six stock market days.

Japan’s Nikkei crashed 5% on Tuesday, entering its own bear market.

Relative Strength Reflects S&P 500 Bear Market

The relative strength line, the blue line in the charts below, tracks a stock’s performance vs. the S&P 500 index. It’s a great way to determine which stocks are leaders or laggards. But when stock market correction is so intense, with the Nasdaq and S&P 500 index in bear markets, even stocks breaking long-term support may show rising RS lines or even hitting new highs. 

McDonald’s Stock

McDonald’s stock fell 2.2% to 170.38 in Monday’s stock market trading, roundtripping an 11% gain from a 172.10 saucer-with-handle buy point. Shares have been pulling back all month, tumbling through its 50-day line Thursday. But McDonald’s RS line hit a new high on Christmas Eve because the S&P 500 fell even harder.

Verizon Stock

Verizon stock tumbled 3.8%, now 14% off its Nov. 20 peak and closing in on its 200-day line. But its RS line barely edged lower from Friday’s record high. Verizon stock now boasts a 4.4% dividend yield.

Microsoft Stock

Microsoft stock plunged 4.4% on Monday to a 7-month low. That followed a 3.2% loss on Friday and a 2.1% retreat last Thursday. Those three losses have pushed Microsoft stock well below its 200-day line and 19% off its Oct. 3 peak. But its RS line has barely dipped, and was at record highs on Thursday. Despite its sell-off, Microsoft stock has became the world’s most valuable company as Apple (AAPL) plunges more.

Intel Stock

Intel stock fell 3% on Monday. The chipmaker’s shares have fallen 8.9% over the past four sessions, beginning with last Wednesday’s plunge through its 50-day line. And yet, Intel stock is still above its stock market correction low on Oct. 24, so its RS line has trended higher. Intel’s RS line is just below a recent five-month high.

These four Dow Jones stocks could bounce back into promising positions in a few days or weeks if and when the stock market revives. Their relative strength is apparent vs. the wrecked Apple stock. But Microsoft stock, McDonald’s stock, Verizon and Intel are damaged. There’s no guarantee that Intel stock & company will hold up even relatively well in the current bear market, let alone be leaders in the next market uptrend.

Keep in mind that Apple stock looked great on Nov. 1, with its RS line just below record highs, before crashing.

It’s a bear market right now. It’s a time for building watch lists, following the stock market and staying in cash. Right now cash has a superior relative line to almost any stock.

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2018-12-25 23:20:14

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