Dow Jones Futures: Nasdaq Holds Support, Watch These 17 Stocks; Taiwan Semi

Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Taiwan Semiconductor (TSM) and Birkenstock earnings loom early Thursday.

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The stock market rally retreated again Wednesday amid weak China GDP growth, higher European inflation figures and mixed U.S. economic data. The major indexes tested a key level, but closed off lows.

However, a number of stocks fared relatively well, holding in or near buy zones. Those included Microsoft (MSFT), GitLab (GTLB), Datadog (DDOG), Expedia (EXPE), Royal Caribbean (RCL), United Rentals (URI), Axon Enterprise (AXON), GoDaddy (GDDY), Celsius Holdings (CELH), Elastic (ESTC), DoubleVerify (DV), Novo Nordisk (NVO), Spotify (SPOT), Skechers (SKX), Interactive Brokers (IBKR), AppLovin (APP), Arm Holdings (ARM).

Many of these names, including Datadog, ARM, Skechers, DoubleVerify and IBKR stock, reversed higher. Others pared losses and held key levels, such as Spotify and ESTC stock.

However, Tesla (TSLA) retreated amid substantial price cuts in Europe following cuts in China. TSLA stock sank 2%, hitting a two-month low intraday. Tesla earnings are due on Jan. 24.

DDOG stock, Spotify and Novo Nordisk are on IBD Leaderboard, with CELH stock on the Leaderboard watchlist. Microsoft, Skechers and SPOT are on SwingTrader. MSFT stock is on IBD Long-Term Leaders. RCL stock, Datadog, Celsius, Microsoft, Novo Nordisk, United Rentals and Axon Enterprise are on the IBD 50 list. Datadog, Axon Enterprise and URI stock are on the IBD Big Cap 20.

DoubleVerify was Wednesday’s IBD Stock Of The Day. GTLB stock was Tuesday’s selection.

Dow Jones Futures Today

Dow Jones futures were flat vs. fair value. S&P 500 futures edged lower and Nasdaq 100 futures fell 0.1%.

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

Taiwan Semiconductor Earnings

Taiwan Semiconductor (TSM) reports fourth-quarter earnings before Thursday’s open. TSMC makes chips for Apple (AAPL), Nvidia (NVDA), Qualcomm (QCOM) and many more. It’s also a huge buyer of chipmaking equipment from Applied Materials (AMAT), ASML (ASML), Lam Research (LRCX) and more. So Taiwan Semi earnings and guidance will be key for the chip sector.

TSM stock rebounded for a 1.3% gain to 102.95 on Wednesday, holding the 21-day line. Shares could be actionable at various points around at either 104.75 or 105.52.

Birkenstock Earnings

Birkenstock Holding (BIRK) reports for the first time as a public company early Thursday. BIRK stock climbed 1.1% to 49.98 on Wednesday, but holding above the 21-day and 10-week lines. The Birkenstock IPO, which came public at 46 in early October, could have a flat base by Friday’s close with a 52.12 buy point.

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Stock Market Rally

The stock market rally gave up ground but closed off lows. U.S. and global economic data and recent commentary from policymakers signal slower rate cuts in the U.S. and Europe with no big stimulus for a struggling China.

The Dow Jones Industrial Average dipped 0.25% in Wednesday’s stock market trading. The S&P 500 index and Nasdaq composite lost 0.6%, rebounding from around the 21-day line. Both are in the middle of a modest range, above their Jan. 5 lows with the 50-day and especially 10-week lines offering potential support as well.

Once again, market breadth was decisively negative.

The small-cap Russell 2000 sank 0.7%, but did bounce from near its 50-day line.

The Invesco S&P 500 Equal Weight ETF (RSP) sank 0.8%, now clearly below its 21-day line and at a one-month low.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) sank x%, but did just manage to hold its 21-day line.

An extended market pause would be normal and healthy after strong gains to end 2023. If the major indexes hold near current levels or even at their early January lows, most leading stocks should be fine.

One positive is that the CBOE Volatility Index, or VIX, has jumped to a two-month high. Far from being elevated, the market fear gauge is no longer hovering around pre-Covid lows.

U.S. crude oil prices rose 0.2% to $72.56 a barrel.

The 10-year Treasury yield rose 4 basis points to 4.10%, hitting its highest level in a month. The two-year Treasury bond yield leapt 13 basis points to 4.35%.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.4%, with Microsoft stock a major holding and DDOG also in IGV. The VanEck Vectors Semiconductor ETF (SMH) fell 0.6%. TSM stock is a big SMH component, along with Nvidia, AMAT, LRCX and QCOM.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sank 1.8% and ARK Genomics ETF (ARKG) tumbled 3.1%. Tesla stock is a major holding across Ark Invest’s ETFs.

SPDR S&P Metals & Mining ETF (XME) declined 0.8%. U.S. Global Jets ETF (JETS) descended 1.9%. SPDR S&P Homebuilders ETF (XHB) stepped down 0.3%. The…