The major US indices that I follow are all showing signs of forming a base in the early hours of Monday, as we have been trying to find our footing for several days. Now, I have a few targets I will be watching going forward.
The big draw for investors with Dow Inc. (DOW 2.04%) is its huge 7.8% dividend yield. While that will clearly be attractive to income investors, it has to be juxtaposed against the company's business risks.
The Dow Jones Industrial Average (^DJI 1.65%) is one of the most-watched stock indexes on Wall Street. Its list of components is rather small; that small list, however, means these are cherry-picked companies that are both large and highly important businesses.
Stock market volatility is back, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all down year to date -- with their declines led by sell-offs in growth-focused sectors like technology and consumer discretionary.
With the S&P 500 and Nasdaq Composite down year to date (YTD), investors may be seeing many top stocks in their portfolios sell off. But certain companies, like Dow Jones Industrial Average component McDonald's (MCD 0.78%), have been immune from broader market jitters.
The US indices that I follow all look tenuous at best, and at this point in time, Dow Jones looks horrible. However, there is at least an attempt to stabilize the other two, so now is a time to be observant.
While the current broad market sell-off dominates headlines, there's still value in looking at specific laggards from the major indexes.
In the closing of the recent trading day, Dow Inc. (DOW) stood at $36.23, denoting a +1.34% change from the preceding trading day.
Despite net negative technicals, there were key bottoming signs for the stock in the indicators and so a bullish reversal may be near. Q4 earnings were a bit disappointing but revenue growth remains at above average levels compared to past years. The P/S ratio's major contraction reflects undervaluation in the stock as it is disconnected from the financials and is at an excessive discount to the sector.
The US indices that I follow are all looking to stabilize at the moment, as the markets are waiting for some kind of positive news. At this point, we are at least attempting to build a base.
Investors continued to be rattled by escalating tensions between the US and its key trade partners, causing the Dow Jones Industrial Average to fall further on Wednesday. The blue-chip index experienced a decline of 364 points, representing a 0.8% drop at the time of writing.
The US indices that I follow all look like they are ready to attempt to bounce. At this point in time, the market continues to see a lot of external pressures, but with the CPI numbers coming out lower than anticipated, this could be a short-term rally.