Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Thursday morning’s stock market rally fell as the Fed’s hawkish remarks extended Wednesday’s losses. But major indices rose from some key levels to close slightly lower.
X
Treasury yields rose again as crude oil prices fell.
apple (AAPL), Microsoft (MSFT) and Google relative Alphabet (GOOGLE), the only three-trillion-dollar U.S. stock, rose after testing support at its 50-day moving average. In the meantime, Tesla (TSLA) retreated towards the bearish-market lows.
Investors should be cautious in the current market, add exposure slowly and be prepared to take profits and cut losses quickly.
Earnings
Applied materials (he loved), Palo Alto Networks (PANW), Clearfield (CLFD) and Ross Stores (FACE) Beat EPS and sales views late Thursday, also generally strong with leadership.
AMAT stock rose modestly overnight, poised to break above its 200-day line. PANW stock rose, indicates a move above 50 days. CLFD shares rose in extended trade, trying to break above the 50-day line as it attempts to establish the right side of a double-bottom base. ROST stock rose to the 2022 high after closing the gap from the bottom base.
JD.com (JD) and Atkore (ATKR) is found on Thursday morning.
Shares of JD rose 7.5% to hit their 200-day line on Thursday Alibaba (baby) early earnings on Thursday. ATKR shares fell 3.5% on Thursday, but were comfortably above their 200-day line as they worked to the right of a deep cup base.
Dow Jones Futures today
Dow Jones futures fell slightly. fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures rose 0.3% with AMAT and PANW fund raising technologies.
Crude oil futures rose 1%.
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
Stock market rally St. Louis Fed President James Bullard and Kansas City Fed President Esther George Shahin made statements. Major indices rose again, closing flat slightly lower.
The Dow Jones industrial average was slightly below the loss on Thursday stock trading. The S&P 500 index fell 0.3%. The Nasdaq composite fell 0.35%. The small-cap Russell 2000 yielded 0.9%.
Apple shares rose 1.3%. Microsoft shares gave back two cents, while Google shares fell 0.5%. All tested their 50-day lines intraday. All are below their 200-day lines with no clear buy points. Tesla shares closed down 2% in November. 9 is a bear market down.
The price of crude oil in the United States fell by 4.6% to $81.64 per barrel. In addition to the Fed’s blunt comments, blame Beijing’s re-emphasis on “zero-Covid” policies. China’s State Council has reportedly warned cities to avoid an “irresponsible relaxation” of Covid-19 measures, a week after the top body backed easing rules. On Wednesday, Peking University was closed due to a case. The number of cases of coronavirus infection in China has increased over the past two weeks.
Hawkish Fed raises Treasury yields
The 10-year Treasury yield rose 8 basis points to 3.77%.
St. Louis Fed’s Bullard said the federal funds rate, currently at 3.75%-4%, may need to rise to 7%, much higher than the consensus of around 5%. The Kansas City Fed’s George said it may take a recession to bring down inflation.
One reason politicians are hawkish is to boost market prices and curb a stock market rally. If financial conditions ease significantly based on the Fed’s pivot hopes, inflation could remain high for longer, forcing the Fed to tighten official rates even further.
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ETFs
between the best ETFsInnovator IBD 50 ETF (FFTY) decreased by 0.1%. iShares Expanded Tech Software Sector ETF (IGV) is down 2.65%, even with the MSFT fund as a major component. PANW shares are also IGV holdings. VanEck Vectors Semiconductor ETF (SMH) down 0.5%, AMAT shares with outstanding SMH holdings.
SPDR S&P Metals & Mining ETF (XME) decreased by 2.1%. SPDR S&P Homebuilders ETF (XHB) retreated 2%. Energy Select SPDR ETF (XLE) 0.5% and Healthcare Select Sector SPDR Fund (XLV) decreased by 0.2%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) 2.8% and ARK Genomics ETF (ARKG) 3.2%. TSLA stock is a core holding among Ark Invest’s ETFs.
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Stock Market Rally Analysis
The stock rally tested some key levels at Thursday’s open. The Nasdaq found support just above its 50-day moving average. The S&P 500 briefly fell to an October high. The Russell 2000 bounced back from near its 21-day line. The S&P 400 MidCap crossed the 200-day line.
After a strong run and the S&P 500 nearing its 200-day line, the market should have pulled back. Meanwhile, the market rally found support in key areas on Thursday. So, the last few days have been normal and somewhat constructive for the major indices – assuming they can hold Thursday’s lows and eventually move higher.
However, the market’s pullback from Tuesday’s intraday high to Thursday morning’s low has hit a number of stocks that have bled or fizzled out over the past few days. A few have tested these inputs or failed completely. Some rebound and some can. In some cases, previous purchase points are still valid, while others may need to set new handles or other records. Others may struggle for a long time.
Various stocks and sectors are showing interesting movements.
In all these cases, a healthy market rally will be key.
Apple shares, Microsoft and Google are not market leaders and may not be for some time. But it would be a big help if they could prevent the backlog.
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What to do now
The stock market rally showed promising action on Thursday. Over the past few weeks, the overall trend has been higher. But it has been a circuitous road for investors.
Anyone who bought shares after October. 21 follow-up day it was probably underwater in early November. While the indices rose in November. At 10 on the corresponding CPI report, the Nasdaq, S&P 500 and Russell 2000 have all been down since then.
In a stock market rally, sector rotation and large intraday swings complicate matters. Buying opportunities have often been the moment the market pulls the rug out from investors.
So keep the lighting on. Add exposure gradually and be prepared to reduce exposure based on market conditions or individual stock sales patterns.
Keep your watchlist up to date so you can see new leads.
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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