Dow Jones Futures Fall: Netflix Chills; Tesla Eyes 3 Buy Points With Earnings Due

Dow Jones futures, S&P 500 and Nasdaq were all down slightly overnight. Tesla is due to report earnings on Wednesday, but Tuesday's reports were dominated by Netflix.

Tuesday's major indexes closed little changed, as the stock market continues to move sideways.

Netflix (NFLX), which reported mixed results, was volatile. Intuitive Surgical jumped to a buying point. United Airlines (UAL), Interactive Brokers, and United Airlines all reported earnings. Hard-hit regional bank Western Alliance Bancorp and Metropolitan Bank Holding both saw their shares rise on the back of better than expected earnings.

ASML, a major chip equipment company, will report early on Wednesday. Lam Research (LRCX), meanwhile is due to report late on Wednesday.

Tesla stock is still near several possible buying points.

This article includes a video that reviews and analyses the current market and Mobileye (MBLY), Las Vegas Sands LVS and Lockheed Martin LMT.

Dow Jones Futures Today

Dow Jones futures fell 0.2% against fair value. S&P futures fell 0.15%, and Nasdaq futures dropped 0.1%. Netflix is a major component of the S&P 500, Nasdaq100 and ISRG.

Keep in mind that overnight trading in Dow futures or elsewhere may not necessarily translate to actual trading during the next regular session of the stock market.

Key Earnings

After initially plummeting, the NFLX stock briefly turned positive. Netflix's subscriber growth was below expectations, and slowed down significantly from Q4 to Q5. The earnings were just a little bit better than expected and the revenue was just a little bit short. The streaming TV company also announced that it will crack down on password-sharing in the U.S. and increase buybacks throughout the year. The shares closed at 333.70 up 0.3%, with support found on the 50-day line. Netflix stock is trading at 349.90, a cup-and-handle-base price after the streaming giant's share price more than doubled between May 2022 and early February 2023.

Netflix announced that it will shut down DVD-by-mail on September 29.

ISRG's stock price jumped after-hours, signaling the possibility of a breakout. Intuitive Surgery's earnings and revenue were modestly better than expected, but procedure growth was sharp. The shares rose 0.15% on Tuesday to 269.28. After clearing a too low handle of 259.12, Intuitive Surgical has a cup-base purchase point of 285.19.

United Airlines' earnings exceeded expectations, resulting in a slight rise in the UAL stock. The shares rose by 1.6% on Tuesday to 43.04, rebounding from the 200-day level but still struggling to recover from a March sell-off.

IBKR fell in extended trading when Interactive Brokers' earnings were below expectations, but revenue was on track. On Tuesday, Interactive Brokers rose by 1.1% to 84.74, indicating an early entry. IBKR is now signaling that it will move below this key level.

WAL's stock soared overnight as the Phoenix-based Bank beat expectations and stated that deposits had increased since March. Western Alliance shares fell 0.9% to 32.51 on Tuesday. The stock is still well above its 11-year-low of 7.46 set in March, but it has fallen more than 50% since early-March.

MBC's stock also rose after hours, as the New York-based bank topped. Core deposits were also up slightly by March 31, compared to the end of 2020. Metropolitan Bank's stock fell 1.2% to $30.80.

Morgan Stanley (MS), and Superregional U.S. Bancorp, (USB), are due to report early on Wednesday.

ASML will release its earnings very early on Wednesday morning. ASML's stock rose 0.7% on Tuesday to 643.33, but was halted by resistance at the 50 day line. According to MarketSmith's analysis, the Dutch chip equipment company has a cup-with handle buy point of 683.28.

ASML's stock fell 4.1% Monday on reports that Taiwan Semiconductor will cut capital expenditure plans when it announces Q1 results at the start of Thursday.

Stock Market Rally

Stocks opened higher but then lost gains. They traded in a narrow range for the majority of the session.

In Tuesday's trading, the Dow Jones Industrial Average dropped a small amount. S&P 500 index increased by 0.1%. The Nasdaq composite dipped. The Russell 2000 small-cap index fell by 0.4%.

The U.S. crude prices increased by 3 cents, to $80.86 per barrel.

The yield on the 10-year Treasury fell by 2 basis points, to 3.57%.

ETFs

Innovator IBD ETF (FFTY), a growth ETF, jumped 2% and reached its highest levels since December. The iShares Expanded Tech Software Sector ETF (IGV), which tracks the tech-software sector, gained 0.2%. VanEck Vectors Semiconductor ETF SMH rose by 0.45%. ASML and LRCX are both SMH holdings.

TSLA remains the top holding across all Ark Invest ETFs. Ark Invest's ETFs are dominated by TSLA stock.

Global Jets (JETS), a major member of the Global Jets group, advanced by 0.9%. The SPDR S&P Homebuilders ETF gained 1.7%. The Energy Select SPDR ETF XLE (XLE) gained 0.4%, while the Health Care Select Sector SPDR Fund XLV (XLV) fell 0.7%.

The Financial Select SPDR ETF, XLF, fell 0.3%. The SPDR S&P regional banking ETF (KRE), a fund that includes WAL, fell 2.2% on Monday.

Tesla Earnings

Tesla's earnings will fall by 20% from a year ago, due to the impact of deep price cuts on gross margins. The revenue should increase by 26%, to $23.73 Billion. However, it will be down sequentially from Q4.

Tesla cut its prices in April in the U.S. and Europe, among other markets. This week, China's EV competitors are launching a number of new models that will challenge Tesla's outdated lineup. Analysts will be looking to see if deliveries are going to continue increasing and if margins will remain low. Investors will also want to know about the Tesla Cybertruck and a refreshed Model 3. They may even be interested in hints regarding a new platform. Tesla bulls have also high hopes for the energy storage business of the company.

Tesla Stock

Tesla's stock dropped 1.5% on Tuesday to 184.31, as it continued to encounter resistance at the 50 day moving average. The 207.89 price point is a buy from the cup-and-handle bottom that was formed just below 200-day moving. Investors may prefer to enter TSLA stocks when the 200-day line is decisively broken, which is currently at 213. Third, a move above the 50 day line after earnings would offer an entry point.

Market Rally Analysis

Stock market rallies had another quiet day with major indexes barely moving after early gains.

It's not a problem for the market to be digesting gains, and trading close to the recent highs of 2023 and the tops of recent consolidations. This is especially true heading into the earnings season. This is the top stocks taking a break while others are setting up.

The Nasdaq has seen a less impressive improvement in market breadth. New highs and new lows are in a tug-of-war.

The Invesco 50 500 Equal-Weight ETF (RSP), which tracks the S&P 500, has shown some improvement in recent weeks. However, it has not yet decisively crossed its 50-day line.

The Russell 2000, which is home to many banks stocks, has fallen below its 200-day line and 50-day line.

Horton (DHI), which reports Thursday, is the first of a series of earnings reports for the group.

The SMH ETF, which has been a strong support for the chip stocks since the 50-day line was reached, tried to pull out of the market on Tuesday morning. The ETF sank despite Nvidia's (NVDA) solid gains. Several chip plays reversed lower. ASML, Lam Research, and Taiwan Semiconductor's earnings could have a major impact on the chip industry and the overall market rally.

In addition, several other groups, including travel, commodities, footwear, software and defense/aerospace as well as medical products and gaming, have stocks that are in or near the buy zone. If the market were to gain strength and breadth, there would be many more buying opportunities.

What to Do Now

Investors could have nibbled on some of the few buying opportunities that have arisen over the last several days. The time is not right to increase market exposure from the current levels. Although the sideways movement of the market is positive, it doesn't provide a significant boost to individual stocks. This is likely the reason why so many stock movements that looked promising near the opening have faded.

Earnings season will also likely affect stocks, sectors, and indexes in the coming sessions.

There are many stocks that show interesting movement from different sectors. Investors need to be prepared to increase their exposure. Have your watchlists prepared.

The Big Picture is a daily read to keep up with market trends, leading stocks, and sectors.