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Growth Leads Market Sell-Off; What To Do Now



Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures, with JPMorgan and other bank earnings on tap. The stock market rally had a rough Thursday, as highly valued growth stocks such as Tesla, Roblox and ServiceNow led the retreat.


The Nasdaq tumbled to its worst close since October while the S&P 500 slid below key support.

Taiwan Semiconductor (TSM) broke out Thursday on strong earnings and guidance. TSM stock gapped up 5.3% to 139.19, clearing an 11-month cup-with-handle base with a 135.60 buy point, according to MarketSmith analysis. But shares closed at session lows. Chip-equipment makers Applied Materials (AMAT), Lam Research (LRCX) and ASML (ASML) rallied on TSM’s strong capital spending plan, but they erased gains or reversed lower

Growth stocks struggled overall, especially highly valued unprofitable names or those with triple-digit price-earnings ratios, including Tesla (TSLA), Roblox (RBLX), ServiceNow (NOW) and Datadog (DDOG), along with many ARK-style stocks.

Tesla fell 6.75% on Thursday, back below its 50-day line. RBLX stock tumbled 10%, back below its 200-day line. NOW stock plunged 9.1% to its lowest level since June. DDOG stock skidded 7.65% to its worst close since late August.

Boeing (BA), Caterpillar (CAT) and Honeywell (HON) tried to keep the Dow Jones positive. BA stock and Honeywell reclaimed their 200-day lines and broke trend lines intraday, briefly flashing aggressive entries before pulling back. CAT stock popped after pausing for a few days following a gap above the 200-day line.

Bank Earnings

Dow Jones component JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) report fourth-quarter earnings early Friday, kicking off bank earnings as financials have stood tall in the new year.

JPM stock is still actionable from the 50-day line. Wells Fargo is slightly extended while Citigroup is trying to recover.

Tesla and Nvidia stock are on IBD Leaderboard. AMAT stock is on SwingTrader. ASML stock and ServiceNow are on IBD Long-Term Leaders. Tesla stock and AMAT are on the IBD 50.

The video embedded in this article discusses Thursday’s market sell-off and analyzes TSM stock, Simon Property Group (SPG) and JPMorgan.

Dow Jones Futures Today

Dow Jones futures were about even vs. fair value. S&P 500 futures and Nasdaq 100 futures were little changed.

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

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally opened higher, turned mixed, then turned into a growth-led sell-off to close near session lows.

The Dow Jones Industrial Average fell 0.5% in Thursday’s stock market trading after being up for much of the session. The S&P 500 index slumped 1.4%, with ServiceNow the worst performer. The Nasdaq composite skidded 2.5%. The small-cap Russell 2000 lost 0.8%.

The 10-year Treasury yield edged lower for a third straight day to 1.71% on Thursday. Fed Gov. Lael Brainard, speaking at her confirmation hearing to be Fed vice chair, said inflation is her top priority. It’s the latest evidence that even dovish Fed members now favor tightening monetary policy.

Crude oil futures dipped 0.6% to $82.12 a barrel while natural gas prices tumbled after spiking in the prior session.

Key ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) tumbled 4.2%. Both NOW stock and Datadog are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) sank 1.7%, with TSM stock, AMAT, LRCX and ASML all notable components.

SPDR S&P Metals & Mining ETF (XME) retreated 1.6% and Global X U.S. Infrastructure Development ETF (PAVE) edged down 0.3%. U.S. Global Jets ETF (JETS) climbed 2.2%, with Delta Air Lines (DAL) earnings and guidance lifting airlines. SPDR S&P Homebuilders ETF (XHB) dipped 0.4%. The Energy Select SPDR ETF (XLE) edged down 0.5%. The Financial Select SPDR ETF (XLF) gave up 0.3%, with JPM stock, Wells Fargo and Citigroup all notable holdings. The Health Care Select Sector SPDR Fund (XLV) gave up 1.55%

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 5.4% to a fresh 18-month low and ARK Genomics ETF (ARKG) tumbled 4.4% to a 19-month low. Tesla stock remains the top holding across ARK Invest’s ETFs. ARKK also owns some RBLX stock.

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Market Rally Analysis

The stock market rally is facing its first test since rebounding from Monday’s lows, and it isn’t going great so far. After hitting resistance at their 10-day lines on Wednesday, the major averages struggled on Thursday.

The Nasdaq composite led the sell-off, tumbling to a three-month closing low just above its 200-day moving average.

The S&P 500 skidded below its 21-day and 50-day lines. The Dow Jones advanced during the morning but with the broad market selling, the blue-chip index also turned lower. Still, the S&P 500 and Dow Jones are just a couple of strong days from being at record highs.

The Russell 2000 also lost ground, falling further from its 50-day and 200-day lines.

Losers slightly beat winners on the NYSE, but led decisively on the Nasdaq.

Software and highly valued growth stocks still look terrible. Tesla stock fell sharply, but at least it’s holding near its 50-day line within a base. Software leaders such as DDOG and ServiceNow have tumbled well below moving averages.

Some chip stocks are holding up well, but are prone to intraday reversals just when they start to build momentum. Meanwhile, big leaders such as Nvidia (NVDA) are back near recent lows. Marvell Technology (MRVL), which had been holding above its 50-day line, tumbled 7.4% to undercut that key level.

In addition to energy and financial stocks, manufacturing firms such as Boeing, Caterpillar and Honeywell are showing signs of life. Chemicals makers like Ashland (ASH) are setting up.

Ford Motor (F) and other traditional automakers such as Toyota (TM) and Stellantis (STLA) are acting well. So are shipping firms, with the notable exception of most trucking firms.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

A mixed, choppy stock market rally is treacherous. Real economy sectors have held up reasonably well. But a growth stock sell-off could drag down the entire market. That’s what happened Thursday. Or, investors could rotate back into growth and out of financials or energy.

As MarketSmith products coach Harold Morris said on Thursday’s IBD Live, position sizing is key in this volatile, uncertain market. So is buying close to the 50-day line in most cases. Don’t make overly large bets on specific stocks or broad sectors, and look for early entries.

There’s also nothing wrong with staying all or mostly in cash, waiting for real market strength. The Nasdaq is stuck below its 21-day and 50-day lines, along with many stocks. That’s not a hospitable environment.

When bulls and bears are fighting for market dominance, staying out of the way makes a lot of sense.

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

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


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Actress Regina King’s son Ian Alexander Jr. has died at 26: «Our family is devastated at the deepest level»



Regina King’s 26-year-old son, Ian Alexander Jr., has died, a spokesperson for the actor confirmed Saturday morning. 

«Our family is devastated at the deepest level by the loss of Ian,» the statement read. «He is such a bright light who cared so deeply about the happiness of others. Our family asks for respectful consideration during this private time.»

Alexander Jr. — King’s only child, whom she shared with ex-husband Ian Alexander Sr. — died by suicide, a spokesperson confirmed to The Associated Press.

The two were very close, with Alexander Jr. often accompanying his mother on the red carpet. They even had matching tattoos reading «unconditional love» in Aramaic, the AP reported.

Last year, Alexander Jr. posted a tribute to his mother on her birthday, writing, «To be able to watch you take this lifetime by its neck and make it yours is something i will forever be grateful for. But to have you as my mother is the greatest gift I could ask for. To be all that you are while always having the time to be there, love and support me unconditionally is truly remarkable.»

Alexander Jr. was a DJ who went by desduné. He had just recently released a song called «Green Eyes,» which King posted about on her Instagram last week. According to Alexander Jr.’s Instagram, he had a show scheduled for January 28 in Los Angeles.

King is known for her roles in the movie «If Beale Street Could Talk» and on the television show «Watchmen.» She also directed the 2020 film «One Night in Miami…» She has won an Academy Award, a Golden Globe, four Primetime Emmy Awards and two NAACP Image Awards over the course of her more than 30-year career.

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German navy chief resigns over Putin comments



Defence Minister Christine Lambrecht visits the navy base in Warnemuende, Germany, December 17, 2021. Bernd Wuestneck/Pool via REUTERS

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BERLIN, Jan 22 (Reuters) – Germany’s navy chief stepped down on Saturday after drawing criticism for saying Russian President Vladimir Putin deserved respect and that Kyiv would never win back annexed Crimea from Moscow.

«I have asked Defence Minister Christine Lambrecht to relieve me from my duties with immediate effect,» Vice Admiral Kay-Achim Schoenbach said in a statement. «The minister has accepted my request.»

Schoenbach made the remarks to a think-tank discussion in India on Friday, and video was published on social media. The comments came at a sensitive time as Russia has amassed tens of thousands of troops on Ukraine’s borders.

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Diplomatic efforts are focused on preventing an escalation. Russia denies it is planning to invade Ukraine.

In New Delhi, Schoenbach, speaking in English, said Putin seeks to be treated as an equal by the West.

«What he (Putin) really wants is respect,» Schoenbach said.

«And my God, giving someone respect is low cost, even no cost… It is easy to give him the respect he really demands – and probably also deserves,» Schoenbach said, calling Russia an old and important country.

Schoenbach conceded Russia’s actions in Ukraine needed to be addressed. But he added that «the Crimea peninsula is gone, it will never come back, this is a fact,» contradicting the joint Western position that Moscow’s annexation of the peninsula from Ukraine in 2014 cannot be accepted and must be reversed.

Prior to Schoenbach’s resignation, the defence ministry publicly criticised his remarks, saying they did not reflect Germany’s position in either content or wording.

Schoenbach apologized for his comments.

«My rash remarks in India … are increasingly putting a strain on my office,» he said. «I consider this step (the resignation) necessary to avert further damage to the German navy, the German forces, and, in particular, the Federal Republic of Germany.»

The Ukrainian Foreign Ministry had called on Germany to publicly reject the navy chief’s comments. Schoenbach’s comments could impair Western efforts to de-escalate the situation, Ukraine said in a statement.

«Ukraine is grateful to Germany for the support it has already provided since 2014, as well as for the diplomatic efforts to resolve the Russian-Ukrainian armed conflict. But Germany’s current statements are disappointing and run counter to that support and effort,» Ukraine’s Foreign Minister Dmytro Kuleba said separately in tweet.

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Reporting by Sabine Siebold; Editing by Catherine Evans and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.

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Butler announces retirement



Steelers defensive coordinator Keith Butler announced his retirement on Saturday evening in a statement released by the team.

«It is an emotional day as I announce I am retiring from my football coaching career,» said Butler. «I have spent every year since 1990 as a coach in the NFL and the NCAA, but the time is right for me to walk away after a successful career both playing and coaching the game I love.

«I want to thank the Rooney Family, Bill Cowher, Mike Tomlin and all the coaches and players that I have been involved with over my entire coaching career. I look forward to spending more time with my family, whom have been so supportive of me throughout the years. I wish nothing but the best to the Pittsburgh Steelers, and I will be cheering them on during my retirement.»

Butler served as the team’s defensive coordinator since being promoted to that role in January 2015. He had previously served as the team’s linebackers coach for 12 seasons from 2003-14. Butler was a part of two Super Bowl winning teams with the Steelers (Super Bowl XL and Super Bowl XLIII).

The Steelers lead, or tied for the lead, in overall sacks for the last five years under Butler, setting an NFL record in 2020 when they did it a league-high four years in a row.

In 2020 the Steelers broke an NFL record with a streak of 70 games with at least one sack, breaking the record set by the Tampa Bay Buccaneers of 69 straight games with at least one sack (1999-2003). The team extended the streak to 75 games, which is still the NFL record.

He came to the Steelers after an NFL coaching career that began with the Cleveland Browns (1999-2002) and before that in the college ranks at Arkansas State (1998) and Memphis (1990-97).

Butler played in the NFL for 10 seasons (1978-87) for the Seattle Seahawks.

Butler was a three-year starter at inside linebacker for the University of Memphis, leading the team in tackles his junior and senior seasons and being named as Associated Press All-American in 1977.

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