Dow Jones futures were little changed overnight, along with S&P 500 futures and Nasdaq futures. Stocks fell Thursday morning on the hawkish Fed announcement, extending Wednesday’s losses. But the major indexes rebounded from some key levels to close slightly higher.
Treasury rates rose again as oil prices plummeted.
apple (AAPL), Microsoft (MSFT) and parent Google alphabet (GOOGL), the only three-trillion-dollar stock on the US exchange, rallied after testing support at the 50-day moving average. At the same time, Tesla (TSLA) retreated to its market low.
Investors should be alert to the market at the moment, add the transmission step by step and be ready to take profits and cut losses quickly.
Tools used (AMAT), Palo Alto Networks (PANW), Clearfield (CLFD) and Ross Stores (ROST) both EPS and sales outlook late Thursday, with overall strong guidance as well.
AMAT stock rose slightly overnight, poised to retrace above its 200-day high. PANW stock bounced back, marking a 50-day move above. CLFD stock is up in long-term trading, looking to break above the 50-day line as it tries to build on the right side of the double bottom base. ROST stock has exploded to a 2022 high after closing the gap from a low base.
JD.com (JD) and Atkore (ATKR) is in production on Friday morning.
JD stock jumped 7.5% on Thursday, to its 200-day line, following Alibaba (BABA) on Thursday morning. ATKR stock fell 3.5% on Thursday, but it is better than its 200-day line as it works on the right side of a deep cup base.
Dow Jones Futures today
Dow Jones futures fell 0.1% vs. The S&P 500 futures jumped. Nasdaq 100 futures rose 0.1%, with tech stocks AMAT and PANW up.
Oil futures rose 1%.
Remember that overnight movements in Dow futures and elsewhere do not necessarily translate into actual trading in the next trading session.
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Stock Market Rally
The stock market rally fell sharply in the open when the president of St. Louis Fed James Bullard and Kansas City Fed President Esther George. The major indexes have rebounded to close flat to slightly lower.
The Dow Jones Industrial Average was below the break-even point in Thursday’s market trading. The S&P 500 index was down 0.3%. The Nasdaq composite fell 0.35%. The small-cap Russell 2000 gave up 0.9%.
Apple stock rose 1.3%. Microsoft stock returned two cents, Google stock fell 0.5%. Everyone tried the 50-day-a-day line. All are below the 200-day line with no clear buy points. Tesla stock sank 2%, nearing a Nov. 9 bear market.
US crude oil prices fell 4.6% to $81.64. In addition to the Fed’s hawkish comments, blame Beijing’s revision of the “zero-Covid” policy. China’s State Council is said to have warned cities to avoid “irresponsible relaxation” of Covid-19 measures, just a week after the top body backed easing rules. On Wednesday, Peking University was closed due to a single case. The number of Covid infections has increased in the past two weeks in China.
Hawkish Fed Raises Treasury Yields
The 10-year Treasury yield rose 8 basis points to 3.77%.
St. Louis Fed’s Bullard said the funds rate, currently at 3.75%-4%, may have to rise to 7%, well above the consensus of 5%. . Kansas City Fed’s George said a recession may be necessary to lower inflation.
One reason why policymakers are hawkish is to raise interest rates and curb liquidity in the stock market. If the financial situation worsens in anticipation of the Fed pivot, inflation may stay longer, forcing the Fed to tighten the official rate more.
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Among the best-performing ETFs, the Innovator IBD 50 ETF ( FFTY ) was down 0.1%. The iShares Expanded Tech-Software Sector ETF (IGV) was down 2.65%, although MSFT stock was a significant component. PANW stock is also an IGV holding. The VanEck Vectors Semiconductor ETF (SMH) stock price increased by +0.5% during the week.
Shares of the SPDR S&P Metals & Mining ETF rose 2.1%. SPDR S&P Homebuilders ETF’s share price has changed by +2%. The Energy Select SPDR ETF (XLE) was down 0.5% and the Health Care Select Sector SPDR Fund (XLV) was down 0.2%.
Over the past month, the price of the ARK Innovation ETF has changed by -2.8% and the ARK Genomics ETF has changed by -3.2%. TSLA stock is a major holding in Ark Invest’s ETF.
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Stock Market Rally Analysis
The stock market rally tested some key levels at Thursday’s open. The Nasdaq found support above its 50-day moving average. The S&P 500 is off its all-time high in October. The Russell 2000 rebounded from near the 21-day line. The S&P 400 MidCap held the 200-day line.
Arguably, the market is due for a pullback after a strong run with the S&P 500 nearing its 200-day line. Meanwhile, the market found support on Thursday in key areas. Therefore, the past two days have been normal and somewhat constructive for the major indexes – assuming that they can hold the lows on Thursday and eventually go higher.
However, the market’s decline from Tuesday’s high to Thursday morning has caught up with several stocks that have emerged or emerged early entry in the past two days. Many have tried these approaches or failed completely. Some relapse while others may. In some cases, previous purchase points are still valid, while others may require setting up a new handle or other login. Others may struggle for a long time.
Many stock types and sectors are showing interesting activity.
In all these cases, a healthy crowd will be important.
Apple stock, Microsoft and Google are not market leaders and may not be for a long time. But if they can avoid the delay, it will be a big help.
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What to do now
Thursday’s fundraiser showed encouraging activity. The general trend has been higher in recent weeks. But it’s been a winding road for investors.
Anyone who bought shares after October 21st could be in the water by early November. While the index rose on the November 10 CPI report, the Nasdaq, S&P 500 and Russell 2000 have been down since then.
Stock market volatility remains murky, with sector volatility and major weather changes complicating matters. Buying opportunities are often times when the market pulls in investors.
So, keep the light on. Add alerts gradually – and be prepared to cut off threats due to market conditions or individual stock trading rules.
Keep your watchlist updated so you can spot emerging leaders.
Read The Big Picture every day to stay in tune with the direction of the market and stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market reforms and more.
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