Stocks have kicked off Tuesday’s trading on a stronger note, as oil trails and markets keep one eye on hawkish Fed talk and another on the brutal battle for Ukraine.
Some of that positivity may come from the fact investors look ready to choose higher rates over higher inflation, with the former seen as less toxic for companies in the longer run, said Ipek Ozkardeskaya, senior analyst at Swissquote.
Read: Jerome Powell leaves door open for rate hikes larger than 25 basis points
While everything can change in a minute, investors might be wondering what it will take for the S&P 500 to build on last week’s 6% rally. Our call of the day, from MKM Partners’ chief market technician, JC O’Hara, advises watching for signs of stabilization in areas that were first hit in the leg downward.
And biotech is fitting that theme, he said. “The S&P 1500 Biotech group of stocks is bouncing exactly where it should.” He zeroes in on two charts, from Ionis Pharmaceuticals
IONS,
+2.69%
and Moderna
MRNA,
+3.23%,
the latter which is holding a vaccine day presentation for investors on Thursday.
It’s not just biotech. “There are more and more pharmaceutical charts breaking out to new highs in a tape that saw plenty of bear market moves from individual names,” said O’Hara, as he flagged bullish charts from Bristol Myers Squibb
BMY,
-0.36%,
Corcept Therapeutics
CORT,
-2.80%,
Harmony Biosciences
HRMY,
+1.69%,
Innoviva
INVA,
+1.35%,
Johnson & Johnson
JNJ,
-0.53%,
Eli Lilly
LLY,
-1.53%,
and Pacira BioSciences
PCRX,
+3.50%.
O’Hara also likes European pharmaceutical stocks. “While geopolitical concerns remain front and center in Europe, pharma seems to be a good place to put capital to work.”
He sees bullish charts on the following names: ALK-Abello
ALK.B,
-1.76%,
AstraZeneca
AZN,
+0.26%,
Bayer
BAYN,
+0.87%,
GlaxoSmithKline
GSK,
+1.18%,
Ipsen
IPN,
+0.27%,
Novartis
NVS,
+0.13%,
Novo Nordisk
NVO,
-0.87%,
Roche
ROG,
-0.12%,
Sanofi
SNY,
+1.67%
and UCB
UCB,
+0.63%.
As for that 6% S&P 500 rally last week, O’Hara said the most positive takeaway was a close above the key 4,400 level.
“The magnitude of the move was impressive, but the levels broken above are what we need to focus on,” said O’Hara, who noted other “bullish action,” such as the Russell 2000
RUT,
+0.62%
and Nasdaq 100 indexes
COMP,
+1.71%
breaking above intermediate downtrends. And the Stoxx Europe 600 regained a level seen the day Russian launched its attack on Ukraine.
The buzz
Ukraine forces claim to have recaptured a key suburb in Kyiv, while the battle for Mariupol rages on and strategists say a stalemate situation is building. President Vladimir Zelensky says he’s ready to discuss a deal for a Russian cease-fire.
Accounts, yachts, private jets, properties in London, Italy and France worth more than $17 billion have been connected to Russian officials with close ties to President Vladimir Putin, plus dozens of oligarchs.
Nike
NKE,
+3.05%
reported stronger-than-expected earnings and sales, lifting shares in premarket, and bucking worries about slumping China sales.
Chinese e-commerce giant Alibaba
BABA,
+12.10%
boosted its buyback program to $25 billion.
The Okta
OKTA,
-3.35%
authentication company said it’s investigating images appearing to show a hack of its internal system. That hack is believed to be Brazil-based, though the U.S. has warned at least 100 companies to brace for Russian cyberattacks.
The data calendar is empty but we’ve got more Fed speakers ahead — New York Fed President John Williams, San Francisco President Mary Daly and Cleveland President Loretta Mester.
A tracking tool from Reclaim Finance finds that of 150 financial institutions are still working with oil and gas companies despite their green promises.
The markets
Stocks
DJIA,
+0.82%
SPX,
+1.10%
COMP,
+1.71%
are higher, while oil prices
CL00,
-1.87%
NQ00,
+1.73%
struggle for traction. Treasury yields
TMUBMUSD10Y,
2.378%
are charging higher, while gold
GC00,
-0.51%
and the dollar
DXY,
+0.04%
step back.
Equities were mixed in Asia
NIK,
+1.48%
000300,
-0.08%,
but moved higher in Europe
SXXP,
+0.85%.
Cryptocurrencies are also having an upbeat day, with bitcoin
BTCUSD,
+3.38%
surging to a two-week high and Ether
ETHUSD,
+3.37%
also climbing.
The tickers
These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern.
Random reads
Russia didn’t embrace Arnold Schwarzenegger’s video message about the Ukraine war.
The founder of the World Central Kitchen makes a plea for instant translated messages from WhatsApp.
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