Stock market indexes chopped sideways on weak volume in the first half of Tuesday's session, following Monday's downside reversal. The mixed action signaled caution ahead of Thursday's closely watched inflation report. Dow Jones component Boeing shook off early losses after reporting strong end-of-year deliveries.
Fed Chair Jerome Powell delivered comments to a Swedish audience of central bankers ahead of the opening bell. The stock market bounced after the speech, which offered no new policy statements.
The S&P 500 rallied above the 50-day moving average Monday and reversed, closing at the intraday low. Other major indexes reversed as well, highlighting continued rejection at key resistance levels.
This price action is typical of a bear market, but it's been three months since the S&P hit a new low. Good trades can happen in two-sided market conditions but high cash levels, between 60% and 80%, should be maintained.
The Dow Jones Industrial Average, Nasdaq and S&P 500 crisscrossed their flatlines repeatedly into the lunch hour. The Russell 2000 small-cap index showed modest strength, rising 0.4%.
Nasdaq and NYSE volume fell compared with the first half of Monday's session, pointing to indecision.
The 10-year Treasury note yield jumped more than 3%, or 11 basis points, to 3.63%.
Crude oil added less than a buck to $75.50 per barrel. European bourses fell in unison, posting losses of less than 1%, while Asian markets were mixed in quiet trading.
In the crypto world, Bitcoin probed a three-week high near $17,300 while Coinbase rallied into tough resistance around 40.
Stock Market: The Week Ahead
This week's economic calendar is light until Thursday's December consumer price index (CPI) report.
November's 0.1% reading shocked market watchers, and sent short sellers packing, but the stock market could not hold subsequent gains. Estimates have come way down in the last month, with many analysts looking for another 0.1% reading. Bulls could take back control of the tape if the number hits that low mark.
However, core CPI estimates are much higher for December, at 0.4%. Divergence between the two readings may highlight deeply rooted structural inflation that will take much longer to get under control.
Boeing Deliveries Surge
Dow Jones component Boeing took in 203 net orders and delivered 69 airplanes in December, ending 2022 on a bullish note. Supply snafus impacted production in 2020, 2021 and last year but the aerospace giant is finally catching up on massive backlogs. Even so, parts and labor shortages in the complex supply chain continue to impact operations.
Boeing delivered 480 jets in 2022, 40% higher than the 340 that exited its assembly plants in 2021.
BA stock clawed back opening losses after the data, incurred when Morgan Stanley downgraded the firm to equal weight. Shares mounted the 173.95 buy point of a 60-day cup base in November and reached the 20%-25% profit-taking zone on Friday.
Bed Bath & Beyond reported a loss of $3.65 per share in the November-ended quarter, while revenue fell 33% year over year to $1.26 billion.
Bed Bath & Beyond President and CEO Sue Gove dodged the bankruptcy question, delivering a diplomatic but self-serving response, insisting that "we are implementing our plan expeditiously while managing our financial position in a changing landscape. We are delivering on our aggressive second half commitment of $250 million in SG&A (selling, general, and administrative expenses) optimization, or $500 million in annualized savings."
BBBY shares traded higher by 19% despite the weak report, but are still 94% lower than August's peak at 30.
Stock Market Movers And Shakers
The Innovator IBD 50 ETF outperformed with a 0.2% increase.
IBD 50 component Griffon charged above the 5% buy zone Monday, after a two-month flat base, and is closing in on the 20%-25% profit-taking zone. GFF shares traded higher by 0.6% Tuesday and are near an all-time high.
The building construction manufacturer has posted high double- or triple-digit earnings growth in each of the last four quarters.
Also in the IBD 50, Axon Enterprise surged higher Monday, lifting above the 21-day line for the first time since a Dec. 6 selling gap down.
The company formerly known as Taser now shows a well-developed consolidation with price about 8% below a 193.95 buy point. That level is close to three peaks and reversals carved in 2021. AXON shares traded nearly flat Tuesday.
Profits at the law enforcement gear maker are expected to grow 33% this year.
Follow Alan Farley on Twitter at @msttrader.