U.S Stock Price Today (February 24): Best Analysis and Forecast
|Photo: USA Today|
US technology stocks fell sharply on Monday as rising inflation expectations and long-term interest rates undercut arguments for their high valuations, Financial Times.
The technology-focused Nasdaq Composite closed down 2.5 percent, losing more ground than other benchmark indices. The blue-chip S&P 500 closed down 0.8 percent, while the Russell 2000 lost 0.7 percent.
U.S Stock price best analysis on February 22, 2021
Facebook, Amazon, Apple, Netflix, and Google parent Alphabet — collectively known as the Faang stocks — all tumbled in what some investors said could be the beginning of an overdue correction.
Apple outperformed on Monday sliding nearly 3%
Shares of Apple Inc. AAPL, -2.98% shed 2.98% to $126.00 Monday, on what proved to be an all-around mixed trading session for the stock market, with the Dow Jones Industrial Average DJIA, +0.09% rising 0.09% to 31,521.69 and the NASDAQ Composite Index COMP, -2.46% falling 2.46% to 13,533.05. Apple Inc. closed $19.09 short of its 52-week high ($145.09), which the company reached on January 25th.
On Monday, the S&P 500 moved down 0.8%, while the Dow Jones Industrial Average traded up 0.1%.
Among the Dow Jones leaders, Apple (AAPL) slid 3%, while Microsoft (MSFT) descended 2.7%. Apple stock fell further below its 10-week line, while Microsoft is testing a recent buy point. Disney (DIS) is back in the buy range after Monday's sharp gain.
Late Monday, Cadence Design Systems (CDNS), Palo Alto Networks (PANW), and ZoomInfo (ZI) reported earnings results.
Among top stocks in or near buy zones, hot IPO stock Shoals Technologies (SHLS) is trying to break out past a new buy point, while Trade Desk (TTD) continues to form a new base.
Apple, Microsoft, Tesla, and ZoomInfo are IBD Leaderboard stocks. Shoals Technologies was Thursday's IBD Stock Of The Day. Trade Desk was featured in this week's Stocks Near A Buy Zone column.
Airlines, which have been battered by the virus pandemic, rose after Deutsche Bank upgraded its view on the sector and the potential for recovery as COVID-19 cases fall and vaccination rates increase. American Airlines jumped 9.4%, while Delta rose 4.5% and United Airlines gained 3.5%.
Traders continued to bid up shares in energy companies, which are getting a boost from higher energy prices. The sector has risen four out of the last five days. Exxon Mobil rose 3.7%.
The price of crude U.S. crude oil rose 3.8% to $61.49 a barrel. It's now up 27% for the year.
Brent crude, the international standard, rose 3.7% to $65.24 a barrel and is up 26% this year. Goldman Sachs predicted in a research note that the price of Brent crude would reach $70 by the second quarter.
The price of Bitcoin, which moved above $50,000 for the first time early last week, dropped 6.2% to $53,765 Monday, according to the currency brokerage Coinbase. The slide followed a tweet late Friday by Elon Musk in which the Tesla CEO said the price of Bitcoin and another cryptocurrency, Etherium, "seem high." Earlier this month, Tesla announced that it was buying $1.5 billion in Bitcoin as part of a new investment strategy and that it would soon be accepting Bitcoin as payment for its cars, reported USA Today.
Tesla stock suffers the biggest fall since September 2020
According to CNBC, shares of Tesla closed down 8.55% on Monday, as investors betting on a pandemic comeback rotated out of Big Tech and piled into cyclical stocks.
It’s Tesla’s biggest drop since Sept. 23, 2020, when it closed down 10.34%.
Shares of the company’s Big Tech peers also dropped Monday, with Apple, Amazon, and Microsoft each closing down more than 2%. Overall, the Nasdaq Composite fell 2.5% on Monday, while the Dow Jones Industrial Average reversed a 200-point loss to close up 0.1%.
Tesla’s stock could also have been dragged down from Bitcoin, which slowed its rally on Monday. The coin was down about 6% after the bell Monday, according to CoinDesk.
Earlier this month, Tesla disclosed it bought $1.5 billion worth of Bitcoin for “more flexibility to further diversify and maximize returns on our cash.” The company also said it plans to start accepting payment in Bitcoin.
The company is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” Wedbush Securities analyst Daniel Ives said in a research note over the weekend.
Volatility should be expected from Tesla stock. It soared 743% last year as it won over Wall Street's attention. Tesla's sales jumped, and the company demonstrated strong profits. Also likely helping the stock price last year was a big year for growth stocks in general. Many such stocks soared 50% or more in 2020.
But growth stocks were taking a breather on Monday as the Nasdaq Composite fell 2.5%.
Most of Tesla's gains this year have evaporated. Shares are now up just 1.5% in 2021.
Tesla's underlying business will likely continue to grow rapidly this year. Indeed, management guided for vehicle deliveries to increase from about 500,000 in 2020 to more than 750,000 this year.
But with a very optimistic business view already priced into Tesla shares, it's difficult to predict where the stock could end up at the end of 2021.
There's one thing we can expect with near certainty: plenty more volatility.
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Dow Jones features on February 22
After the stock market close Monday, Dow Jones futures and S&P 500 futures were up 0.2% each, while Nasdaq 100 futures rallied 0.5% vs. fair value. Remember that trading in Dow Jones futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session, as cited by Investors.
Among exchange-traded funds, Innovator IBD 50 (FFTY) tumbled 2.9% Monday. The Nasdaq 100-linked Invesco QQQ Trust ETF (QQQ) traded down 2.6%. Meanwhile, the SPDR S&P 500 ETF (SPY) lost 0.8%.
Gamestop Stock price and prediction
Gamestop stock news
The ramifications from the Gamestop episode are yet to be fully played out. The White House is to investigate if a tax on stock trading is worth considering in the wake of the Gamestop (GME) saga, according to reports from CNN. This would be a significant revenue source for the US as share trading has exploded during the pandemic. The US currently does not impose a tax on share trading for individuals, unlike the UK and many EU countries, where the rate varies from 0.5 to 1%. A $1.9 trillion stimulus package also needs to be funded!
Gamestop (GME) stock forecast
For now, sentiment appears to be favoring bulls, but it is hard to say for how long. Given increased institutional attention, it is harder for retail to dominate the Gamestop pitch like before. But the trend is your friend, so jump on and just make sure to manage risk carefully.
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