Dow Jones Gains As Tesla Stumbles On Price Cuts; Big Short Michael Burry Places These Bets

The Dow Jones Industrial Average battled back as Merck (MRK) and Apple (AAPL) were among its gainers. The latest bets of legendary Big Short investor Michael Burry have been revealed. Tesla (TSLA) was lower after yet more price cuts emerged.


Meanwhile, a trio of stocks moved higher as they eye breakouts despite the current uptrend being under pressure. Box (BOX), Monster Beverage (MNST) and Option Care Health (OPCH) all moved toward entries.

Treasury yields moved higher. The 10-year yield rose two basis point to 4.19%, while the two-year yield popped seven basis points to 4.97%, making the yield curve more inverted.

Nasdaq Gains As Small Caps Fight Back

The tech-heavy Nasdaq fared best out of the major indexes as it reversed higher to gain a muscular 1.1%. Leaderboard stock Nvidia (NVDA) was the top performer here as it popped 7.1%.

The benchmark S&P 500 also managed to rally out of the red, closing up 0.6%. Micron Technology (MU) was among the top components here thanks to a lift of 6.1%.

The S&P 500 sectors ended the session mixed. Technology and communication services fared best in the stock market today. In contrast, real estate and utilities lagged the most.

The bears continued to nibble at small caps, with the Russell 2000 falling 0.3%. Growth stocks rallied well, with the Innovator IBD 50 ETF (FFTY) rising 0.2%.

Dow Jones Today: Merck, Apple Stock Among Gainers

The Dow Jones managed to rally into the close, ending in positive territory. It gained 26 points, or 0.1%.

Apple stock was among the best gainers as it rallied 0.9%. Despite this it remains marooned below its 50-day moving average, according to MarketSmith analysis.

Intel (INTC) fared best though with a 2.3% gain. It is now clear of its short-term and major moving averages.

Merck (MRK) and Visa (V) also performed well on the Dow Jones today with lifts of 1.4% and 1.2%, respectively.

3M (MMM) was the worst laggard as it fell 1.1%. Goldman Sachs (GS) and Walmart (WMT) were the next worst performers with dips of nearly 1% each.

Big Short Michael Burry Makes These Moves

All eyes in the investment community are on the deluge of 13-F filings showing up on the SEC database.

Michael Burry, whose became famous after going short ahead of the subprime mortgage crisis, is taking a cautious approach following the stunning stock market run-up in the first half of the year.

The “Big Short” legend’s Scion Asset Management placed a couple of noteworthy bearish bets according to its filing. Firstly, it has put options against 2,000,000 SPDR S&P 500 ETF Trust (SPY) shares. This position had a value just shy of $887 million at the time of the filing.

In addition, his firm has put options against a further 2,000,000 Invesco QQQ Trust (QQQ) shares, which is a negative bet against the Nasdaq-100 Index.

However, Scion Asset Management also took out a number of new positions in the likes of MGM Resorts (MGM), Generac (GNRC) and Expedia (EXPE).

Michael Burry is not the only big name whose latest bets have been eagerly awaited. The 13-F filing of Berkshire Hathaway (BRKB), which is led by legendary investor Warren Buffett, is expected late Monday.

Tesla Stock Falls On More Price Cuts

Tesla made up some of its losses for the day after dipping on more price cut news, but it still closed lower.

It was hit after it emerged it will reduce prices once again, this time in China.

The global EV giant announced the cost of the Model Y Long Range and Performance variants have been reduced by RMB14,000 ($1,930). This represents about a 4% price cut. It marked the company’s third price trim on various Model Y versions in China.

On the plus side, Tesla left prices for its base Model Y unchanged. This is the most popular variant in China.

Tesla has made multiple price cuts around the globe in 2023. This puts pressure on profit margins.

The EV stock ended the session down 1.2%, losing ground on its 50-day moving average. It has been reversing since its post-Q2 earnings plunge. Nevertheless, Tesla stock remains up nearly 122% so far in 2023.

Outside Dow Jones: These 3 Stocks Eye Entries

When a stock market uptrend is under pressure, it is important to keep track of possible breakouts.

Box stock moved closer to a cup-with-handle entry of 31.83, MarketSmith analysis shows.

The database software play is a strong all-around performer, with its IBD Composite Rating coming in at 88 out of 99.

Monster Beverage moved closer to a flat base entry of 60.47. It pulled away from its 50-day line in the process.

Earnings are a key strength for the energy drink stock, with its EPS Rating an excellent 94 out of 99.

Option Care Health is powering toward a consolidation entry of 35.87. Big Money has been snapping up shares, with its Accumulation/Distribution Rating strong at A-.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.


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