The Dow Jones Industrial Average rose as Americans voted on Election Day. A number of so-called ‘Republican stocks’ have made gains, though Donald Trump’s SPAC Acquisition of the digital world (DWAC) fell. Coinbase (CURRENCY) and Riot Blockchain (RIOT) plunged as Bitcoin reduced the June bear market low after Binance decided to buy crypto exchange FTX.
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A number of stocks tested buy points amid the broadly bullish action, including Albemarle (ALB), Big BJ club (BJ) and Factory (FN).
Volume was up on the Nasdaq and the New York Stock Exchange from the same time Monday. That’s a plus point on a busy day.
The yield on the benchmark 10-year Treasury fell 9 basis points to 4.13%. West Texas Intermediate crude oil slid more than 2%, cutting $90 a barrel.
Nasdaq Pops, IBD 50 shifts
The Nasdaq was off the highs but fought off negative pressure to gain 0.2. The S&P 500 rose 0.4%.
The S&P 500 sectors were mostly positive, with materials and real estate doing the best. Consumer discretionary and communication services suffered the most.
Small caps reversed lower, with the Russell 2000 down 0.5%.
But the Innovator IBD 50 (FFTY) ETF, a benchmark for growth stocks, fared the worst with a 0.6% drop.
Dow Jones Pops: Amgen shines, Disney revenue is due
The Dow Jones Industrial Average fared the best among the major averages, rising almost 1%. But he also gave up some winnings.
Amgen (AMGN) led the index, gaining around 5%. Boeing (BA) also shined, as it rose around 2%.
Walgreen Boot Alliance (WBA) fell behind, falling 1.4%. But waltz disney (DIS) fares worst ahead of earnings report, down 1.5%
Gain of “republican actions”
Research shows that the stock market tends to recover after the midterm elections. Since 1950, the average one-year return of the S&P 500 after a mid-term has been around 15%.
With Republicans expected to take at least partial control of Congress, a number of stocks Strategas hand-picked for its GOP portfolio were gaining.
defensive play Lockheed Martin (LMT) rose nearly 1% and is currently trading in a buy zone above an entry of 480.09, according to MarketSmith analysis.
Johnson & Johnson (JNJ) reversed the rise to gain nearly 1%. It approximates a cup entry with handle of 175.49.
Ranking Stock Energy Cheniere (GNL) is also on the list and was up nearly 2% for the day. The Natural Gas play is trading just below a buy point of 178.72.
Donald Trump Stock Slides
Digital World Acquisition failed to rally with other Republican stocks. Donald Trump’s SPAC pounced on election speculation on Monday.
The future of the company, which is trying to take the former president’s Trump Media and Technology Group public, remains uncertain. A shareholder vote on whether to approve an extension of the deadline to complete the merger has been pushed back until Nov. 22.
After initially failing to hold the vote in September, SPAC sponsor ARC Global Investments contributed about $2.9 million to extend the merger deadline to Dec. 8, according to federal documents.
Trump Media and Technology Group’s main product at present is the conservative social media site Truth Social, a right-wing alternative to Twitter.
DWAC stock was at a low for the day but remained down more than 6%. It’s about 64% higher so far this month, but has fallen nearly 48% for the year. Donald Trump stock is in the bottom 19% of stocks in terms of stock market performance over the past 12 months.
Coinbase Stock, Bitcoin Rally After Move
COIN and Bitcoin stocks rallied explosively before giving up gains and more.
They made their way after it emerged that Binance had reached a deal to buy crypto exchange FTX.
In a tweet, Binance CEO Changpeng Zhao said they are helping the company.
“This afternoon, FTX asked for our help. There is a significant liquidity crisis,” he said. “To protect users, we have signed a non-binding letter of intent, intending to fully acquire FTX.com and help cover the liquidity crisis.”
It’s a remarkable reversal of fortune for FTX, which is led by CEO Sam Bankman-Fried. Earlier in 2022, it was valued at $32 billion by private investors.
Binance is the world’s largest crypto exchange by 24-hour trading volume.
After briefly turning positive, COIN stock reversed sharply and was down nearly 13% on the day. It continues to trade below all major moving averages. Shares are down more than 80% since the start of the year.
Bitcoin also saw its losses intensify after briefly hitting lows for the day. It was trading just above the $18,000 mark after falling more than 11%. It is at the lowest of the year.
Other cryptocurrency games have struggled. Grayscale Bitcoin Trust (GBTC) plunged almost 13% while Bitcoin mining game Riot Blockchain fell more than 10%, despite being at a low for the day.
ZeroHedge said in a tweet that the FTX sell-off was hitting stocks, sending them plummeting.
Outside of Dow Jones: 3 stock test entries
Albemarle briefly broke above a consolidation buy point of 308.34 before reversing. It also cleared an early entry of 287.98, just above the November 1 high.
The overall performance is solid, with the stock holding a perfect IBD composite rating of 99.
Albemarle, based in Charlotte, North Carolina, is the world’s largest lithium producer and one of the largest suppliers of lithium for electric batteries. The company is already supplying the crucial metal to the electric vehicle giant You’re here (TSLA).
BJ’s Wholesale Club tested a mug entry with handle of 78.93. The relative strength line has just reached a new high, a bullish sign.
Earnings are a key force for the retail stock. Lots of money has been buying stocks lately, with its accumulation-distribution rating at B+.
Fabrinet is in a buy zone after breaking through a cup buy point with a handle of 118.15. He was jumping on solid profits.
With the current uptrend in the stock market still under pressure, buying stocks now carries additional risk.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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