Dow Jones Futures: Market Rally Faces Big Test With Inflation History; Intel Waves

Dow Jones Futures: Market Rally Faces Big Test With Inflation History;  Intel Waves
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Dow Jones futures rose early Friday, while S&P 500 futures and Nasdaq futures fell slightly on dire earnings and guidance from Intel. Basic inflation data is available.


Intel (INTC), a chip-gear manufacturer KLA Corp. (KLAC) and visa (v) reported on Thursday night Chevron (CVX) announcement of results early Friday. American Express (AXP) is also Thursday. All stocks except KLAC are Dow components.

The stock market rally continued to advance on Thursday amid a flurry of earnings reports and economic data. The major indexes closed near highs for the fifth consecutive session and are on the verge of breaking some major resistance.

Tesla (TSLA) made big gains given CEO Elon Musk’s bullish comments about 2023. apple (AAPL), Microsoft (MSFT), (AMZN), Nvidia (NVDA), relative to Google Alphabet (GOOGLE) and a Facebook relative Meta platforms (TARGET) all had solid earnings. None of these stocks are on the spot, with only NVDA stock above its 200-day line.

Still, Thursday’s gains were wide-ranging.

Basic Earnings

KLA’s earnings beat views, but the chip equipment maker steered lower. KLAC shares fell 5% in premarket trading. Shares rose 1.45% to 428.76 on Thursday. It was still above the 419.67 handle point of purchase from a long consolidation, but KLAC stock is poised to pare it down on Friday.

Intel’s revenues fell and the ailing chip giant headed sharply lower for Q1. INTC shares fell 10% in extended trading. Shares rose 1.3% to 30.09 on Thursday. INTC shares are trading at 30.48 base with cup handle which is mostly forming above the 50-day line, but the chip giant is well below the 200-day line. It’s been a long time since Intel was a real market leader.

Visa revenues beat fiscal Q1 forecasts. V shares rose 1% overnight. Shares fell 0.1% to 224.71 on Thursday after better-than-expected earnings from the archrival. MasterCard (MA). Visa shares are still in the 220.08 buy point range.

Chevron’s earnings missed views early Friday, but beat revenue. Shares were down about 2% before the open. CVX shares rose 4.9% to 187.79 on Thursday, up from an early entry of 182.65. 189.78 from A is not far from the official buy point flat base. On Tuesday, energy giant Dow Jones announced a $75 billion buyback and a 6% dividend increase.

American Express earnings and revenue reviews missed a bit. But AXP shares rose more than 5% on positive guidance, signaling a breakout. The stock fell 0.6% to 155.88 on Thursday, holding above its 200-day line. American Express has a 161.65 buy point from the bottom base. Investors can use a move above Thursday’s high of 158.23 as an early entry.

PCE inflation rate

December’s PCE (personal consumption expenditures) price index, the Fed’s favorite inflation gauge, is due out at 8:30 a.m. as part of the Commerce Department’s income and spending report. Economists expect the PCE price index to be relatively stable in 2018. In November, the PCE inflation rate cooled to 5% from 5.5%. Core PCE prices rose 0.3%, with the inflation rate falling to 4.4% from 4.7%.

Fed chief Jerome Powell recently said he is focusing on the prices of basic services, excluding housing.

Thursday’s GDP report showed that basic PCE services minus housing It grew by 4.7% year-on-year in Q4. 12-month super core inflation rose to 4.4% from 4.2%.

Dow Jones Futures today

Dow Jones futures were slightly above fair value, ranging between subtle gains and losses. S&P 500 futures were down 0.2%. Nasdaq 100 futures fell 0.5%. Intel stock is a component of the Dow Jones, the S&P 500 and the Nasdaq, although it doesn’t have as much weight as it once did. Visa, Chevron and AXP stocks are Dow Jones and S&P 500 components.

The 10-year Treasury yield rose 6 basis points to 3.55%.

Crude oil futures rose more than 1%.

Japan and the Netherlands to join US chip export controls. China, Bloomberg reported that the details were finalized on Thursday evening. This could affect the Dutch chip equipment maker ASML (ASML), dropped humbly on Friday morning.

Don’t forget that it’s a one night stand Dow futures and elsewhere does not necessarily become the actual trade on a regular basis Stock market session.

Join IBD’s experts as they analyze the stocks that made the most of the stock rally on IBD Live

Stock market rally

The stock rally had some morning ripples but picked up steam again at the close.

The Dow Jones Industrial Average rose 0.6% on Thursday stock trading. The S&P 500 index rose 1.1%. The Nasdaq composite rose 1.7%. The small-cap Russell 2000 gained 0.6%.

Apple shares rose 1.5% to their best level in more than a month. Microsoft shares rose 3.1% to 248, retracing the 50-day line after dropping to 230.90 on Wednesday. Google shares rose 2.4%, Amazon rose 2.1%. Nvidia climbed 2.5% to its highest price since early May.

The price of crude oil in the United States increased by 1.1% to 81.01 dollars.

The 10-year Treasury yield rose 3 basis points to 3.49%.


Growth exchange-traded funds include the Innovator IBD 50 ETF (FFTY) advanced 1.35%. iShares Expanded Tech Software Sector ETF (IGV) rose 2.5%, with MSFT shares a key holding. VanEck Vectors Semiconductor ETF (SMH) advanced 1.8%, a key component of Nvidia stock. Intel and KLAC are also notable SMH holdings.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) rose 2% and the ARK Genomics ETF (ARKG) increased by 0.15%. Tesla stock is a major holding in Ark Invest’s ETFs. Cathie Wood’s Ark has been loading into the TSLA fund in recent weeks. Ark Invest also has a small position in the Chinese EV and battery giant BYD (BYDDF).

SPDR S&P Metals & Mining ETF (XME) rose 0.8% and the Global X US Infrastructure Development ETF (PEACE) rode 1.9% higher. US Global Jets ETF (JETS) decreased by 0.15%. SPDR S&P Homebuilders ETF (XHB) increased by 0.3%. Energy Select SPDR ETF (XLE) jumped 3.2%, CVX shares held mammoth. Financial Select SPDR ETF (XLF) advanced 0.5%. AXP stock is a component of XLF. Healthcare Select Sector SPDR Fund (XLV) rose 0.2%.

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Tesla shares

Tesla shares rose 11% to 160.27, breaking above the 50-day and 10-week lines.

Tesla’s earnings rose 40%, slightly lowering views. Revenue rose 37%, missing some estimates and beating others. Tesla’s overall revenues fell more than expected, ahead of major price cuts through 2023. CEO Elon Musk was bullish, saying production could reach 2 million EVs in 2023. He said orders have increased in recent weeks. But will this demand continue without falling further?

Tesla will discuss its new EV at its March 1 event, possibly a cheaper model to compete with China’s BYD and others.

Tesla shares are up 57% since January. 6 month bear market is below 101.81. But it is still well below the 200-day line.

Shares rose 2% on Friday.

Meanwhile, BYD shares rose 4.6% above the 200-day line for the first time since late August on Thursday. While still building the right side of a very deep bullish base, BYD shares arguably offered an aggressive entry on Thursday.

Tesla Vs. BYD: EV giants vying for the crown, but which one is better to buy?

Market rally analysis

The stock market rally continued to show strong action on Thursday.

The Nasdaq composite hit its 200-day line for its best close since mid-September. Just above the 200-day line is the December high.

The S&P 500 topped Monday’s peak and is about 1% off its December peak. The index cleared the long-term downtrend line.

The Dow Jones held support at its 50-day line. The Russell 2000 hit a five-month one-day high, surpassing its late-2022 highs before pulling back.

Tesla shares contributed heavily to the advance of the Nasdaq, where Microsoft, Nvidia and other giants performed well.

But it wasn’t just megacaps. Direxion Nasdaq-100 Equal-Weight ETF (QQQE) rose 1.6% to a five-month high on Thursday. Invesco S&P 500 Equal Weight ETF (RSP) rose 0.8% to a five-month one-day high.

Advancers led decliners 2-to-1 on the NYSE and 3-to-2 on the Nasdaq. New highs easily exceeded new lows.

Some leading stocks fell while others extended.

CVX shares were clearly bullish on Thursday, along with the oil major Exxon Mobil (RAW) and several other names related to oil. Allegro Microsystems (ANYTHING) when redeeming a point of purchase Tractor supplies (TSCO) and Wingstop (WING) buy signals flashed.

Market Timing with IBD’s ETF Market Strategy

What to do now

Stock market rally since January. 6 follow-up day, has been a strong and healthy rally with only modest pullbacks. Breakouts and buy signals have a higher success rate than last year.

Hence, investors had to gradually increase their exposure. This could continue, although you may choose to hold off on new purchases until the major indexes clear some recent areas of resistance, especially with bigger gains next week and the Federal Reserve meeting.

The energy, chip, e-commerce, restaurant/retail, housing, biotech, industrials, travel and financials sectors showed positive action with stocks clearing or building buy points. So make sure your watchlists are comprehensive.

Read it The Big Picture daily to stay in sync with market direction and leading stocks and sectors.

Follow Ed Carson on Twitter @IBD_ECarson for stock updates and more.


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