The stock market trimmed or even erased opening losses, as indexes tested technical benchmarks. The IBD 50 outperformed thanks to a handful of stocks that continue to surge.
The stock market shook off some early weakness. The Nasdaq climbed out of a hole and was up 0.2%. The S&P 500 reduced nearly all losses and was down less than 0.1%.
Last week, the Nasdaq and S&P 500 climbed roughly 2% after a series of positive earnings reports, including some of the major banks. Both closed Friday above their 50-day moving averages. This morning, the Nasdaq traded below the line for a time but bounced above it. The S&P 500 held above its own 50-day line.
Walt Disney (DIS) gapped down for a loss of nearly 3% after Barclays downgraded the stock from overweight to equal weight and lowered the price target to 175 from 210. Disney stock remains around last month’s lows.
China’s third-quarter economic growth of 4.9% slowed sharply from the previous quarter’s 7.9% growth rate and was below economists’ expectations. Power shortages and supply-chain problems compounded Beijing’s efforts to rein in the technology sector. China also is dealing with a debt crisis involving some major real estate developers.
But major stock indexes in Asia were little changed. Tokyo’s Nikkei fell less than 0.2%. The Shanghai composite eased 0.1% and the Hong Kong Hang Seng climbed 0.3%. The iShares China Large-Cap ETF (FXI) rose 0.6%. But Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), which tracks mainland stocks, dropped 0.7%.
The first exchange traded fund that tracks Bitcoin futures is set to start trading Tuesday. ProShares said its Bitcoin Strategy ETF (BITO) will offer investors a chance to own Bitcoin without having a cryptocurrency exchange account.
Bitcoin traded around $60,860 Monday morning. It topped the $60,000 level last week on news that the SEC would authorize Bitcoin ETFs that are based on the cryptocurrency futures, rather than the crypto itself.
Up to now, ETF investors had Grayscale Bitcoin Trust (GBTC), which is based on the TradeBlock XBX Index. While the trust closely mirrors the performance of Bitcoin, the ETF’s share price tends to over- or undershoot Bitcoin performance based on investor sentiment.
GlobalX Blockchain ETF (BKCH) is another proxy for cryptocurrencies.
IBD 50 Outperforms Stock Market
Innovator IBD 50 ETF (FFTY) rose 0.9%. Diamondback Energy (FANG) led with a 4.5% increase. Shares of the oil exploration and production company are now extended from the 102.63 buy point of a cup base, according to MarketSmith pattern recognition.
Celsius Holdings (CELH) rose nearly 3% as it tests support at the 10-week moving average. Cloudflare (NET) made a new high and is on track for its 13th consecutive gain. It surged 46% the past two weeks.
CrowdStrike (CRWD) jumped more than 3% and is drawing closer to the 289.34 buy point of a cup-without-handle base. Sea Ltd. (SE) touched the 359.94 buy point of a flat base but sank back into the base.
But Upstart (UPST) plunged 8% after BofA Securities downgraded the stock to underperform from neutral and set a 300 price target. Upstart, which was added to IBD Leaderboard last week, remained above a 346.64 buy point identified in Leaderboard.
Outside the IBD 50, State Street (STT) broke out of a cup base and is in buy range from the 94.74 buy point. Volume was heavy. Early today, the investment management firm beat third-quarter expectations and said it plans to resume its stock buybacks next year.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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