Day: September 20, 2024

(Bloomberg) — Oil-storage tanks at a key US crude hub have drained to near their bottoms as a massive new pipeline in Canada diverts flows elsewhere, muddying market signals that traders have long relied on.

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Inventories in Cushing, Oklahoma, have been dwindling for the past four months and now sit near the lowest in a decade for this time of year. Market participants say the drawdown — which typically takes place as fuel demand rises during the driving season — was exacerbated this year as the expanded Trans Mountain pipeline shifts Canadian oil supplies onto the country’s Pacific Coast and away from the US Gulf Coast.

The expanded pipeline has moved about 400,000 barrels of crude a day since starting operations in May, and Cushing’s tanks have lost almost 13 million barrels of oil during that span. Flows of Canadian crude to the US Gulf Coast have declined to the point where a competing pipeline system owned by Enbridge Inc. mostly operated without the congestion it typically experiences during the US summer driving season.

European demand for US crude is also pulling barrels out of storage at Cushing, traders said, particularly since buyers are on the hunt for similar grades after supply disruptions in Libya.

“With Libya risks, I tend to think storage will stay at tank bottoms in the near term, and the market will make WTI too expensive to export,” said Scott Shelton, an energy specialist at TP ICAP Group Plc.

The continued drawdowns at Cushing have helped prop up the price spread between the nearest two WTI futures contracts. The spread is hovering near $1 a barrel after climbing to the highest levels in nearly a month.

Movements in crude spreads are a closely watched gauge for supply-demand balances, and they are currently signaling a dearth of barrels for immediate delivery despite worries about a longer-term oversupply of oil.

Cushing’s current stockpiles of about 22.7 million barrels represent less than a third of the hub’s working capacity of 78 million barrels. The rapid decline is stoking concerns that the hub’s ability to operate normally may be threatened. Pipeline operators at the storage hub didn’t immediately respond to requests for comment.

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The stock of space exploration company Intuitive Machines (NASDAQ: LUNR) strongly defied gravity on Thursday. It closed the day more than 24% higher, thanks in no small part to news of a major price-target increase from an analyst. That move came mere days after the company delivered some of the best news it’s ever reported.

Over the moon about NASA’s moon contract

The raise was enacted by B. Riley‘s Mike Crawford, who now feels a fair value estimation for Intuitive Machines should be considerably higher. He raised his by 50%, to $12 per share from the previous $8, and maintained the existing buy recommendation. The new price target anticipates upside of 29% on the stock’s most recent close.

It isn’t hard to be glowingly bullish on Intuitive Machines these days. On Tuesday, the company was selected by the National Aeronautics and Space Administration (NASA) as the sole business to establish a communications system between our planet and the moon.

In the grand tradition of major federal contracts, this one is potentially worth quite a bit of coin. All told the arrangement, which will be in force for five years with an option to extend to 10, could pay out as much as $4.8 billion for the stipulated services.

A surprise solo selection

Crawford did not expect Intuitive Machines would be the only winner of the contract; he anticipated one or two other providers would also be selected for the NASA project. This added to his impression that the ambitious company “is quickly establishing itself as a full-service space exploration company on the cusp of layering in hundreds of millions of dollars of high-margin services revenue, enabling a long tail of robust free cash flow generation.”

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Intuitive Machines Stock Rocketed 24% Skyward on Thursday was originally published by The Motley Fool

Dow Jones futures edged lower, along with S&P 500 futures and Nasdaq futures. Nike (NKE) and FedEx (FDX) were big movers overnight on news.

The stock market rally had strong gains Thursday in a day two reaction to Wednesday’s big Fed rate cuts. The Nasdaq led, clearing key levels. The Dow Jones and S&P 500 hit record highs.

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Stocks Jump, Dow Tops 42,000 Post-Fed; Ferrari, CRS, Taiwan Semi In Focus

Meta Platforms (META) gapped above buy points. Nvidia (NVDA) and Apple (AAPL) jumped above their 50-day lines while Tesla (TSLA) powered past a short-term high. All three offered aggressive entries, though NVDA stock might be too early.

Also breaking out or flashing buy signals: Carpenter Technology (CRS), Spotify (SPOT), Shift4 (FOUR), Alibaba (BABA), Uber Technologies (UBER), Netflix (NFLX), Nvidia chipmaker Taiwan Semiconductor (TSM), Broadcom (AVGO), Modine Manufacturing (MOD), Monday.com (MNDY), TransMedics Group (TMDX), Royal Caribbean (RCL), Caterpillar (CAT) and Ferrari (RACE).

While it was a broad advance, there was a clear shift toward growth and aggressive growth. Defensive groups such as utilities and REITs fell slightly once again.

Investors should take advantage of the buying opportunities, while adding more high-octane names to their portfolios.

Nvidia, Ferrari and Meta stock are on IBD Leaderboard. Nvidia stock, Monday.com, Ferrari and Spotify are on SwingTrader. TransMedics, Nvidia, Monday.com, Royal Caribbean, Meta Platforms and Netflix stock are on the IBD 50. Shift4 stock is on IBD Sector Leaders.

Dow Jones Futures Today

Dow Jones futures were just below fair value, even with a boost from Nike stock. S&P 500 futures fell 0.15% and Nasdaq 100 futures lost 0.2%.

The 10-year Treasury yield dipped to 3.71%.

China’s central bank kept interest rates unchanged overnight, a surprise given the Fed’s big rate cut and the weak Chinese economy.

The Bank of Japan left rates steady, as expected.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Nike CEO Shift

Nike announced Thursday night that Elliott Hill will take over as CEO on Oct. 14, with John Donahoe stepping down. Hill worked at Nike from 1998 until retiring in 2020 as consumer and marketplace chief. Nike stock leapt nearly 8% in late trade. NKE stock has been in a downtrend since late 2021 amid China woes and increased competition.

FedEx Earnings

After the close, FedEx (FDX) earnings fell short and the shipping giant slashed guidance. FedEx stock plunged 11% in extended trade. Shares had closed higher for a ninth straight session, clearing an aggressive entry within a base.

Lennar (LEN) reported better-than-expected earnings but fell margin guidance. Lennar stock fell modestly in extended action. Shares hit new highs in Thursday’s session.

Stock Market Rally

The stock market rally roared higher Thursday a day after Wednesday’s downside reversal. Investors slept on the big Fed rate cuts and decided they like the backdrop of lower rates and an apparent economic soft landing. The indexes did close modestly off the day’s best levels.

The Dow Jones Industrial Average popped 1.3% in Thursday’s stock market trading and the S&P 500 index 1.7%, both to all-time levels. The Nasdaq composite jumped 2.5%, now decisively above the 50-day line and clearing resistance at the 18,000 level. The small-cap Russell 2000 leapt 2.1%, closing in on multiyear highs.

The Invesco S&P 500 Equal Weight ETF (RSP) rose 1.1%, setting a record intraday.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) bounced 2% to a two-month high, not far from the July 16 all-time best.

With the S&P 500, Dow and RSP at new highs as the Nasdaq and Russell 2000 look like cup-with-handle breakouts, it’s no surprise to see a large number of stocks breaking out.

There appears to be a clear shift from defensive sectors to growth and aggressive growth. Will that trend hold?

U.S. crude oil prices rose 1.5% to $71.95 a barrel.

The 10-year Treasury yield climbed 5 basis points to 3.74%, continuing to bounce from Tuesday’s 52-week low. The two-year yield was flat at 3.6%.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF (FFTY) gained 2.2%. The iShares Expanded Tech-Software Sector ETF (IGV) bounced 2.7%. The VanEck Vectors Semiconductor ETF (SMH) jumped 4.3%. Nvidia stock is the largest SMH holding by far, with Taiwan Semiconductor stock and Broadcom major components.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rallied 2.7% and ARK Genomics ETF (ARKG) was up 2.1%. Tesla stock is a major holding across Ark Invest’s ETFs, but Meta is an even-bigger weight. Cathie Wood also has built up a big stake in NVDA stock.

SPDR S&P Metals & Mining ETF (XME) ran up 3.4%, with Carpenter Technology stock the No. 1 holding. The Global X U.S. Infrastructure Development ETF (PAVE) climbed 3%, with CRS stock also in this ETF. U.S. Global Jets ETF (JETS) ascended 0.7%. The SPDR S&P Homebuilders ETF (XHB) stepped up 2.75%, with Lennar stock in the ETF. The Energy Select SPDR ETF (XLE) advanced 1.2% and the Health Care Select Sector SPDR Fund (XLV) edged up 0.4%.

The Industrial Select Sector SPDR Fund (XLI) rose 1.7%, with Caterpillar, Uber stock and FedEx members. The Financial Select SPDR ETF (XLF) climbed 1.1%. The SPDR S&P Regional Banking ETF (KRE) leapt 2.85%.

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Meta Stock

Meta Platforms stock rallied 3.9% to 559.10 on Thursday. That pushed shares above a 542.81 buy point and a 544.23 alternate entry from a three-weeks-tight pattern.

Meta stock offered an early entry last week as it rebounded above the 50-day and 21-day lines, but now the Fed is out of the way.

Tesla Stock

Tesla stock jumped 7.4% to 243.92, clearing an aggressive entry of 235. TSLA stock has a 271 consolidation buy point, according to MarketSurge. Tesla China registrations were solid in the latest week, according to reports Thursday.

Tesla has a busy October, with third-quarter deliveries likely on Oct. 2, the robotaxi event on Oct. 10, and Q3 earnings on Oct. 16.

Meanwhile, China EV maker Nio (NIO) launched its Onvo L60 crossover on Thursday, a feature-loaded Model Y rival at a cheaper price.

As of Thursday night, Tesla dropped the price of Full Self-Driving to as low as $4,500 for select new inventory vehicles, another incentive to boost sales at the end of the quarter. The normal FSD price is $8,000, down from a peak of $15,000. FSD, despite its name is a Level 2 driver-assist system.

Nvidia Stock

Nvidia stock gained 4% to 117.87, back above its 50-day moving average after hitting resistance at the key level for several days. Investors could have used that as an aggressive entry. However, shares came off intraday highs of 119.66 and are still down for the week.

Taiwan Semiconductor and Broadcom stock are AI chip plays with better-looking charts.

NVDA stock has a 131.26 buy point from an unsightly handle. Investors also could use last week’s high of 120.79 as a much-smaller handle.

Apple Stock

Apple stock advanced 3.7% to 228.87, gapping above its 50-day moving average. The Dow Jones tech titan rallied on positive comments about the iPhone 16, following concerns of underwhelming demand. The latest handset, which begins official sales on Friday, will have AI features later this year.

Apple stock has a handle buy point of 232.92. Investors could have used Thursday’s move as an aggressive entry. There’s also a trendline, with Thursday’s intraday high of 229.82 as a specific trigger.

Other Stocks In Buy Zones

Carpenter stock, Spotify, Shift4, Alibaba, Netflix, Taiwan Semiconductor, Modine Manufacturing, Royal Caribbean and Caterpillar all cleared traditional buy points on Thursday. Monday.com stock cleared a short consolidation.

Uber stock cleared some key short-term levels in a long consolidation.

Broadcom stock broke a trendline entry, still in range of its 50-day line within a proper consolidation. TransMedics stock also broke a trendline, moving off the 50-day as it still works on a new base. Ferrari stock broke a short trendline and retook its 21-day line while rebounding from its 10-week line.

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What To Do Now

The stock market rally continues to gain momentum, with the major indexes at record highs or clearing key levels. Dozens of stocks have flashed buy signals in the past few days.

This is when investors should be looking to step on the gas, moving toward fully invested or even on margin if that’s your risk tolerance. Don’t accelerate like you’re in a Tesla, even if you own TSLA stock. Add exposure — which already should have been significant heading into Thursday — gradually.

Also consider rotating out of defensive and even defensive growth names to make room. There’s been a clear shift into growth and aggressive growth, especially into AI and other tech plays. You don’t want to have a portfolio of super-octane stocks, but you can look to be more aggressive with what you own as well as how much you own.

The past few days are when the hard work of analyzing charts and building up watchlists pays off. Keep working on those lists, both to identify potential new buys and to spot which sectors are rising up or down.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

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Here’s How Much Stocks Historically Rise On The First Fed Rate Cut.

The Federal Reserve on Wednesday cut interest rates with U.S. stocks trading near a record high, leaving investors searching for historical clues to the path ahead for markets.

The S&P 500 SPX briefly traded above its record close from July 16 after the Fed delivered a rate cut of 50 basis points before erasing its gain to end 0.3% lower. Stock-index futures pointed to sharp gains that could see the S&P 500 and Dow Jones Industrial Average DJIA take another run at record territory.

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Do rate cuts with the stock market at or near all-time highs provide bulls additional fuel or do they portend trouble ahead? Dow Jones Market Data ran back the tape.

They found that since 1990, the Fed has cut rates seven times while the S&P 500 was at or near (within 1%) of an all-time high (see table below).

In those instances, stocks tended to rise on decision day (not including Wednesday) — up 71.4% of the time with a median gain of 0.51%. Six months later, the performance is mixed, rising 57.1% of the time with a tepid median gain of 0.62%.

Analysts at JPMorgan ran the data back 40 years, finding the Fed has cut rates 12 times with the S&P 500 within 1% of an all-time high. The market was higher a year later all 12 times with an average return of around 15%.

That’s interesting, but does it really tell investors much about the stock market’s direction over the course of the easing cycle? As countless market watchers have pointed out, it really tends to depend on the economic backdrop.

“Historically, only half of the bond rally has occurred by the time the first cut arrives. The direction of the equity market is less clear-cut — wholly
dependent on whether the Fed has staved off a recession or whether this rate relief came too late, as we have witnessed so many times in the past,” said David Rosenberg of Rosenberg Research, in a Wednesday note.

”The danger this time around,” he wrote, ”is the extreme level of complacency and the widespread consensus that the business cycle has been repealed.”

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Related: History says Fed interest-rate cut sets up ‘crapshoot’ for stock-market investors

—Ken Jimenez and Steve Goldstein contributed.

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Donald Trump recently said he would not sell his stock in Trump Media & Technology Group (DJT). But, starting Thursday, he will have that option — something that’s not been available since the social media company went public in March.

“I have absolutely no intention of selling,” the former president told reporters at a press conference last week. “I love it. I use it as a method of getting out my word.”

DJT shares surged by double digits on Friday following his revelation, although the stock has recently given up those gains, falling more than 10% over the past six days to close below $14.50 on Thursday — near the low-end of its 52-week range and far off its record high of just over $79 a share.

Stakeholders, including the former president, are subject to a six-month lockup period before selling or transferring shares. That lockup period will expire on Thursday, although Trump was still able to pocket some cash in late April when the stock hit a milestone that secured him an additional $1.2 billion.

As Yahoo Finance’s Ben Werschkul detailed, the purpose of a lock-up period is to protect a newly public company’s interests and allow it to preserve stability before its founders can cash out.

“If I sell, it wouldn’t be the same, and I can understand that,” Trump said on Friday, adding that he knows his stake has been “whittled down” in recent months.

Trump maintains a roughly 60% interest in DJT. At current levels, Trump Media boasts a market cap of about $3.3 billion, giving the former president a stake worth around $2 billion. Right after the company’s public debut, Trump’s stake was worth just over $4.5 billion.

Trump Media went public on the Nasdaq in late March after merging with special purpose acquisition company Digital World Acquisition Corp. But the stock has been on a bumpy ride since, with shares oscillating between highs and lows as the moves have typically been tied to a volatile news cycle.

In June, the stock popped (then fell) after current commander in chief Joe Biden stumbled in his first presidential debate of 2024 with Trump. Biden dropped out of the presidential race one month later.

Since Biden’s announcement, shares have remained under pressure as Vice President Kamala Harris, the Democratic presidential nominee, tracks ahead of Trump in the latest polling. Most recently, the stock plummeted to new lows following last week’s debate as bets on a Harris presidency increased.

In May, Trump was found guilty on all 34 counts of falsifying business records intended to influence the 2016 presidential campaign — a verdict that sent shares down 5% the day after the conviction. His sentencing was recently delayed until Nov. 26.

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Shares have fallen about 60% since the company’s public debut at the end of March.

Trump founded Truth Social after he was kicked off major social media apps like Facebook (META) and Twitter, the platform now known as X, following the Jan. 6 Capitol riots in 2021. Trump has since been reinstated on those platforms. He officially returned to X in mid-August after about a year’s hiatus.

But as Truth Social attempts to take on the social media incumbents, the fundamentals of the company have long been in question.

Last month, DJT reported second quarter results that revealed a net loss of $16.4 million, about half of which was tied to expenses related to the company’s SPAC deal. The company also reported revenue of just under $837,000 for the quarter ending June 30, a 30% year over year drop.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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