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Biden Says Putin Set On Invading Ukraine; 5 Stocks That Don't Suck – Investor's Business Daily

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Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally suffered significant damage last week, with the major indexes below key support and starting to move toward their Jan. 24 lows.




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Fears that Russia will invade Ukraine are weighing heavily on the market rally, which is already dealing with inflation and other big headwinds. The uncertainty over what Russian President Vladimir Putin will do adds significantly to the volatility.

President Joe Biden said late Friday that he is confident that Putin has decided to invade Ukraine within the next few days. Other U.S. and NATO officials have echoed that concern, saying Russia has continued to build up troops near the Ukraine border. That’s despite Kremlin claims that some troops are pulling back.

Cease-fire violations between Ukraine and pro-Russian separatists have surged in the past couple of days, perhaps offering a pretext for Russia to launch a Ukraine invasion.

On Feb. 20, big Russia war games with Belarus are set to end. Moscow has said troops will then return home, but will they? Feb. 20 also is the end of the Winter Olympics in Beijing. Putin may be holding off on a Ukraine invasion to avoid offending China.

But setting aside the geopolitics, the stock market rally looks ever weaker. Investors should take a defensive posture with minimal exposure.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures. However, ETFs tracking the Dow Jones, S&P 500 and Nasdaq 100 retreated Friday evening after Biden made his latest comments on the Russia-Ukraine crisis.

The DIA ETF fell 0.4%. SPY sank 0.5% and QQQ 0.6%.

While Dow futures will open Sunday evening as usual, U.S. markets will be closed Monday in observance of the Presidents Day holiday. Other stock markets will be open around the world, however.

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

Five Stocks That Don’t Suck

Apple stock, O’Reilly Automotive (ORLY), Commercial Metals (CMC), Union Pacific (UNP) and Nutrien (NTR) are five stocks holding up near buy points with relative strength lines at or near highs.

Apple (AAPL) dwarfs all of these names, but it’s the only one trading below its 50-day moving average.

The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index. It’s an easy way to spot leading stocks in any kind of market. In a weak or choppy market, stocks with RS lines at highs could be leaders in the next rally.

Nvidia, Tesla Just Hanging On

Meanwhile, Nvidia stock and Tesla (TSLA) rebounded from near their 200-day moving averages on Friday. This is an area where Tesla stock and Nvidia (NVDA) found support before in late January. Can these big former winners continue to do so? It’ll likely depend on the market rally’s next moves. But as megacap stocks, Tesla and NVDA stock will have something to say about the overall market direction.

Home Depot (HD) headlines earnings before Tuesday’s open, while Mosaic (MOS) and Palo Alto Networks (PANW) are among those due after the close.

Tesla stock and Nvidia are on IBD Leaderboard. ORLY stock is on the IBD 50. Commercial Metals was Friday’s IBD Stock Of The Day. UNP stock was Thursday’s.

The video embedded in this article discussed the week’s market action in detail, while also analyzing CMC stock, Union Pacific and new SwingTrader stock Dollar Tree (DLTR).


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


Coronavirus News

Coronavirus cases worldwide reached 422.11 million. Covid-19 deaths topped 5.89 million.

Coronavirus cases in the U.S. have hit 80.02 million, with deaths above 958,000.

Stock Market Rally

The stock market rally tried to bounce last week but faded badly late in the week.

The Dow Jones Industrial Average fell 1.9% in last week’s stock market trading. The S&P 500 index gave up 1.6%. The Nasdaq composite sank 1.8%. The small-cap Russell 2000 retreated nearly 1%

The 10-year Treasury yield fell 2 basis points to 1.93%, but that’s after hitting a 30-month high of 2.065% intraday Wednesday. Russia war fears sent investors into safe havens, while Fed minutes from the January policy meeting didn’t offer any new hawkish surprises.

Crude oil prices fell more than 2% to $91.07 a barrel, but held above the $90 mark.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) slumped 3%. The iShares Expanded Tech-Software Sector ETF (IGV) tumbled 5.4%. The VanEck Vectors Semiconductor ETF (SMH) closed flat, but fell sharply on Thursday-Friday. Nvidia stock is a major SMH component.

SPDR S&P Metals & Mining ETF (XME) rose 2.1% last week. The Global X U.S. Infrastructure Development ETF (PAVE) gained 1.3%. U.S. Global Jets ETF (JETS) ascended 1.8%. SPDR S&P Homebuilders ETF (XHB) dipped 0.5%. The Energy Select SPDR ETF (XLE) gave up 3.35% and the Financial Select SPDR ETF (XLF) sank 2.3%. The Health Care Select Sector SPDR Fund (XLV) pulled back 2.1%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) plunged 9.9% last week, hitting a fresh 20-month low on Friday. ARK Genomics ETF (ARKG) tumbled 6.6%. Tesla stock remains the No. 1 holding across ARK Invest’s ETFs.


Five Best Chinese Stocks To Watch Now


Apple Stock

Apple stock dipped 0.8% to 167.30 last week. During the late January market sell-off, the iPhone giant never came close to its 200-day line. AAPL stock now has a cup-with-handle base with a 176.75 buy point, according to MarketSmith analysis.

Commercial Metals Stock

Commercial Metals stock rose 3.1% to 36.75 last week. It’s slightly above its 50-day moving average, working on a 38.82 buy point. CMC stock could be starting to form a handle, with a potential lower entry of 37.59. Investors already could use that as an early entry.

Union Pacific Stock

Union Pacific jumped 5.2% to 251.19 last week. UNP stock is trading just below a 256.11 buy point in a very shallow flat base. Investors arguably could buy it now or just shy of 255.

O’Reilly Stock

ORLY stock edged up 1.3 to 676.96 last week, its fourth straight modest weekly gain. O’Reilly stock has reclaimed the 50-day line, offering an early entry in a shallow cup base. The official buy point is 710.96.

Nutrien Stock

NTR stock had a wild week, tumbling to undercut the 50-day line briefly before quickly rebounding to record high before pulling back slightly. But, ultimately, Nutrien stock dipped 0.7% to 75.78. That’s just below a 77.45 buy point.

On Wednesday night, the fertilizer maker reported a 929% EPS surge with revenue up 79%. Other fertilizer stocks also are doing well, despite some big intraday and daily swings. That includes MOS stock, which reports late Tuesday.

Tesla Stock

Tesla stock edged down 0.35% to 856.98 last week, but closed low in its range and nearly tested its 200-day line again on Friday. TSLA stock has been hitting resistance at its falling 21-day line for the past few weeks, while the 50-day line is racing lower. Holding the 200-day line, and its Jan. 28 low of 792.01, is key for the EV giant. On the upside, Tesla stock has a 1,208.10 buy point, and doesn’t really have an early entry.

Nvidia Stock

Nvidia stock fell 1.3% to 236.42 for the week, but after hitting resistance at its 10-week line, the chip giant tested its 40-week again and nearly touched its 200-day line. As with Tesla, NVDA stock pared Friday’s losses slightly.

Nvidia earnings and guidance late Wednesday topped views, but investors focused on forecasts for unchanged profit margins.

If Nvidia stock can rally above its 50-day line and its Feb. 10 high of 269.25, also breaking a steep downtrend, that would offer a very aggressive entry. NVDA stock would still have a long way to reach its Nov. 22 peak of 346.47.

Market Rally Analysis

The stock market rally, already under pressure, sold off again late last week. The Dow Jones, S&P 500 index and Nasdaq composite broke below their recent ranges and are heading toward their Jan. 24 lows. The S&P 500 and Nasdaq composite are now below their Jan. 31 follow-through day lows, with the odds high that they break to new lows. Undercutting the Jan. 24 lows would mark the end of the market rally.

In late 2018, the stock market correction or bear market had two failed follow-through days, finally bottoming on Christmas Eve.

The ailing market rally has retreated sharply over the last several days, so arguably it’s due for a bounce. But it doesn’t have to happen right away, and one or two good days wouldn’t be that meaningful.

New losers are still far outstripping new winners, while market breadth also weakened once again after briefly improving in early February.

In the very short run, the stock market will continue to focus on fears that Russia invades Ukraine. The long Presidents Day weekend could have major developments related to Russia and Ukraine, raising the potential for a big move up or down on Tuesday. But all of those moves could quickly reverse with the next headline.

Beyond the Russia-Ukraine crisis, inflation and Fed rate hikes hang over the market. On a somewhat related note, supply-chain woes have been a constant refrain in recent weeks.

General Electric (GE), Applied Materials (AMAT) and Roku (ROKU) were among the many companies that cited supply-chain issues continuing to restrict production and more.

Getting supply chain issues resolved would not only bolster corporate profits and economic growth, but also likely curb inflation. With Covid cases plunging and restrictions quickly ebbing, there may be a light at the end of the tunnel, but it could be a long way off.


Time The Market With IBD’s ETF Market Strategy


What To Do Now

Rather than try to guess how Russia, the Federal Reserve and supply chains play out — and how financial markets will react — focus on what the market is doing now. Right now, the major indexes and leading stocks — outside of a few pockets of strength — are simply not healthy.

Don’t get lured in by one or two good market days. The major indexes have a lot of work to do. In any case, there are only a handful of stocks setting up right now. At some point, there will be a strong market rally with a slew of quality stocks flashing buy signals and moving higher from there.

When that happens, you want to be ready. Keep your watchlists fresh and stay engaged with the market.

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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US stocks rally as Fed minutes meet expectations – Al Jazeera English

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Investors fear that overly aggressive interest rate hikes by the Fed could tip the economy into recession.

Wall Street closed higher Wednesday, boosted after minutes from the Federal Reserve’s latest monetary policy meeting showed policymakers unanimously felt the United States economy was very strong as they grappled with reining in inflation without triggering a recession.

The minutes from the Federal Open Market Committee’s May meeting, which culminated in a 50-basis-point rise in the Fed funds target rate – the biggest jump in 22 years – showed most of the committee’s members judged that further such rate hikes would “likely be appropriate” at its upcoming June and July meetings.

“The uniformity of opinion is a good thing,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “There’s a lack of uncertainty of what needs to be done in the near term.”

“By the time [the Fed] gets to September, they will have plenty of economic data to make their move from there, so they continue to maintain optionality,” Mayfield added.

All three major US stock indexes gyrated earlier in the day amid increasing jitters stemming from business and consumer surveys, economic data and corporate earnings reports suggesting a cooling American economy – even as the Fed prepares to toss a bucket of cold water on it to tackle decades-high inflation.

Fears that overly aggressive interest rate hikes by the Fed could tip the economy into recession despite evidence that inflation peaked in March has driven those concerns.

“There’s some credence to the idea that inflation is doing [the Fed’s] job for them,” Mayfield said. “There’s already a cooling occurring, and financial conditions have tightened over the last month because of dollar strength and equity market weakness.”

On Thursday, the Department of Commerce is due to release its second take on first-quarter GDP, which analysts are expected to show a slightly shallower contraction than the 1.4 percent quarterly annualised drop originally reported.

The Personal Consumption Expenditures report will follow on Friday, which will provide further clues regarding consumer spending and whether inflation peaked in March, as other indicators have suggested.

The Dow Jones Industrial Average rose 191.66 points, or 0.6 percent, to 32,120.28, the S&P 500 gained 37.25 points, or 0.95 percent, to 3,978.73 and the Nasdaq Composite added 170.29 points, or 1.51 percent, to 11,434.74.

Nine of the 11 major sectors in the S&P 500 rose, with consumer discretionary stocks leading the pack with a gain of 2.8 percent.

Amazon.com Inc and Tesla Inc provided the strongest lift to the S&P 500 and the Nasdaq, rising 2.6 percent and 4.9 percent, respectively.

Department store operator Nordstrom Inc surged 14.0 percent on the heels of its upbeat annual profit and revenue forecasts.

Fast-food chain Wendy’s Co jumped 9.8 percent after a regulatory filing revealed that shareholder Nelson Peltz was considering a potential takeover bid for the company.

Shares of Nvidia Corp fell more than 8 percent in after-hours trading after the company’s second-quarter revenue forecast missed expectations.

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Gas Up Nearly 4 Cents; Price Freeze Lifts in Labrador – VOCM

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Despite predictions to the contrary, the regulated price of gas is up in most parts of the province.

Gasoline is up by 3.9 cents a litre, except along the coast of Labrador. Diesel on the island is up by 1.3 cents while diesel in Labrador has dropped by 11.6 cents a litre. Furnace oil costs over a cent a litre more on the island while stove oil on the island up by the same amount. Stove oil in Labrador is down by 23.70 cents a litre.

Propane meanwhile is down by just under 2 cents.

The suspension of maximum price adjustments on the coast of Labrador lifts as of today as fuel deliveries resume for the season—that means significant increases, in some cases by about a dollar a litre, for some fuels.

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Cheese not on the table in Canada-U.K. trade talks as Britain seeks market access

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OTTAWA — The British foreign secretary has often been mocked for her preoccupation with cheese. It started eight years ago when Liz Truss expressed outrage in a speech to her party’s annual conference.

“We import two thirds of our cheese,” she raged. “That is a disgrace.”

Now Truss is facing another battle over cheese, this time with Canada.

Britain wants greater access to Canadian markets for more than 700 varieties of cheese including Stilton, Cheshire, and Wensleydale, a crumbly variety originating from Yorkshire.

But Ottawa has made it clear it does not want to see more British cheddar, let alone artisan varieties such as stinking bishop, renegade monk and Hereford hop, on Canadian fridge shelves.

During the first round of negotiations of the U.K.-Canada trade deal, Canada told Britain that a larger quota for British cheese is not on the negotiating table.

When it was a European Union member, Britain was part of the Comprehensive Economic and Trade Agreement with Canada, giving it some access to Canada’s cheese market.

After the U.K. left the EU, a “continuity agreement” with Canada was swiftly put in place to maintain the CETA arrangement until a bilateral trade deal could be struck.

Ralph Goodale, Canada’s high commissioner to the U.K., said if Britain wants more access to Canadian markets for its cheese as part of a bilateral free-trade agreement, it will have to knock on Brussels’ door and get its part of the dairy quota back.

“The point is we have already provided that volume in the EU deal and the British left it there without taking it with them,” he said in an interview. “That’s an issue they need to resolve with the Europeans because the Europeans have their quota.”

Goodale said the U.K.’s request for extra access for British cheese — on top of the access given to the EU — is “what the Canadian negotiators consider to be pretty much a dead end.”

“You are talking about a double concession — one we have already made to the EU and the request is being made by the U.K. for yet another one on top of that,” he said.

The high commissioner said Canada values its trading relationship with the U.K., adding that he is confident that a mutually-beneficial trade deal will be reached.

But if Canada allows the British to export more of their cheese it would involve “a major commitment of compensation to dairy producers” in Canada to make up for lost incomes.

In 2018, after the United States-Mexico-Canada Agreement gave the U.S. fresh access to the Canadian dairy market, Prime Minister Justin Trudeau said he would compensate Canadian dairy farmers.

Canada’s dairy industry was worth over $7 billion in 2020, according to the Canadian Dairy Commission’s annual report.

There are over 10,000 dairy farms in Canada — most of them in Quebec and Ontario — with an average of 92 cows per farm, it said.

Until at least the end of next year, Britain will be able to keep exporting its cheese to Canada under the trade continuity agreement, the U.K.’s trade department said.

This allows U.K. cheese exporters to access the Canadian market tariff-free under the EU portion of Canada’s World Trade Organization cheese tariff rate quota.

As part of the 1995 WTO agreement on agriculture, Canada established tariff rate quotas for cheese and other dairy products. The quotas set out quantities of dairy that could enter Canada with little or no duty.

For Britain, a fully fledged free trade deal with Canada is crucial after Brexit left it looking for fresh tariff-free markets.

“We want to negotiate an ambitious and comprehensive new agreement with Canada that will strengthen our close and historic bilateral trade relationship,” said a U.K. government trade spokesman in a statement, adding the relationship was worth about $34.5 billion in 2021.

In March, U.K. Trade Secretary Anne-Marie Trevelyan flew to Canada to announce with Canada’s Trade Minister Mary Ng that bilateral negotiations had officially begun.

In a speech in the House of Lords in London earlier this month, Goodale reported on progress in the talks, saying that “both sides are optimistic that, as good as CETA and the continuity agreement were, we can do better still when Canada and the U.K. negotiate a deal face-to-face, directly with each other.”

Like Goodale, Ng said Canada is confident a free-trade deal with Britain will be reached, enhancing co-operation in a number of areas, including on renewables, sustainability and the digital economy.

“Canada values the relationship with the United Kingdom. They are … an important trading partner and a trade agreement with the U.K. will be very good for Canadian businesses,” she said in a phone interview from Thailand last weekend.

But she was also firm about the need to protect Canada’s dairy producers, and that means keeping more British cheese out.

“I have been very clear, our government has been very clear, that we will not provide access to our supply-managed sector,” she said. “We have been clear about that from the get-go.”

The Canadian dairy sector now produces 1,450 varieties of cheese, including ewe, goat and buffalo varieties, as well as the cheese curds used in the Québécois dish poutine.

At least half of Canada’s cheese is made in Quebec, which is home to a number of artisan varieties including bleu l’ermite, or blue hermit, and Oka, a popular semi-soft rind cheese.

Pierre Lampron, president of the Dairy Farmers of Canada, has made it clear he will fiercely protect Canadian cheese from British interlopers.

Lampron said he had “validated that the issue of access to the Canadian dairy market was not on the agenda of these trade talks.”

Canada’s protectionist stance toward its dairy industry may have pleased farmers. But it has caused some tension with close allies.

Earlier this month, New Zealand launched a formal trade dispute against Canada, accusing the federal government of breaking promises to give access for dairy imports under the Trans-Pacific Partnership agreement.

The Biden administration also recently said it was asking for a second dispute settlement panel under the U.S.-Mexico-Canada Agreement to review a trade dispute with Canada over dairy import quotas.

This report by The Canadian Press was first published May 26, 2022.

 

Marie Woolf, The Canadian Press

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