Futures: Four Titans Leads Earnings Wave; what to do now

Futures: Four Titans Leads Earnings Wave;  what to do now

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures.


The stock market rally had another sideways week, with the Dow Jones, S&P 500 and Nasdaq Composite all sliding lower in continued tight action. Investors await a flood of gains highlighted by Microsoft (MSFT), Amazon.com[ticker symb=AMZN], Metaplatforms (META) and parent of Google Alphabet (GOOGL).

Buying opportunities have not been plentiful and many have vanished or gone bankrupt. Earnings season will reach full force in the coming week, offering potential for the market rally to get out of its groove.

Microsoft, Amazon, Meta and Google are particularly important. Microsoft shares and, probably, Amazon are now usable. Google’s stock is close to a buy point as Facebook parent Meta is pulling back after a massive run.

By themselves, they have a big impact on the major indices. And their comments on future growth in key markets like cloud computing, artificial intelligence, e-commerce and PCs will have a big influence on the technology sector and beyond.

In the meantime,Prime Solar (FSLR), Dexcom (DXCM), Mobileye (MBLY), boeing (BA), ServiceTime (NOW), Cloudflare (NET), Align technology (ALGN), Nice Isaac (FIG), Visa (V) e Mexican Grilled Chipotle (CMG) are just a few of the notable companies reporting next week with stocks in or near the Buy Zones.

MBLY stock in particular has an action-packed week, with the IPO block deadline on Monday followed by earnings on Wednesday.

Bed Bathroom and beyond (BBBY) filed for Chapter 11 bankruptcy on Sunday, with the home improvement retailer long grappling with debt and declining sales. BBBY stock has been down for a long time, but meme shares soared 23% last week despite the prospect of bankruptcy.

In the meantime, keep an eye out for the news at Medical shock wave (SWAV). SWAV shares rose Friday on a report that Boston Scientific (BSX) is evaluating a takeover bid for Shockwave. But the companies said nothing.

The video embedded in this reviewed article Arista Networks (A NETWORK), TJXCos. (TJX) e JPMorgan Chase (JPM).

Microsoft shares are on the long-term leaders IBD.

Dow Jones Futures today

Dow Jones futures open at 6 p.m. ET, along with S&P 500 and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session of the stock market.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock market rebound

The stock market rally didn’t have much direction last week.

The Dow Jones Industrial Average fell 0.2% in the stock market last week. The S&P 500 index fell 0.1%. The Nasdaq composite fell 0.4%. The small-cap Russell 2000 was up 0.6%.

The yield on the 10-year Treasury rose 5 basis points to 3.57%.

U.S. crude futures tumbled 5.5% to $77.87 a barrel last week.


Among growth ETFs, the Innovator IBD 50 ETF (FFTY) was up 2.7% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) was down 0.4%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 0.1%, with MSFT stock a major holding. The VanEck Vector Semiconductor (SMH) ETF slipped 1.5%.

Reflecting the stock’s more speculative stories, ARK Innovation ETF (ARKK) was down 3% last week and ARK Genomics ETF (ARKG) was up 1%.

The SPDR S&P Metals & Mining (XME) ETF tumbled 4.2% last week. The Global X US Infrastructure Development ETF (PAVE) was up 0.55%. The US Global Jets ETF (JETS) was up 1.8%. SPDR S&P Homebuilders ETF (XHB) was up 3.4%. The Energy Select SPDR ETF (XLE) tumbled 2.6% and the Health Care Select Sector SPDR Fund (XLV) fell 0.2% after five weekly gains.

The SPDR Financial Select ETF (XLF) was up 1%, with JPM stock a major holding. The SPDR S&P Regional Banking (KRE) ETF advanced 1.5%, but still has a long way to go to recover.

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Analysis of market rallies

The equity market rally continues to move sideways, with major indexes declining slightly. The S&P 500 and the Nasdaq Composite indeed have tight four-week patterns. The Nasdaq tested support at the 21-day line and the 12,000 level towards the end of the week.

More broadly, the major indices are stuck in a range between early 2023 highs and 50-day moving averages.

Market breadth remains thin, especially on the Nasdaq. The advance-decline line has weakened in recent days.

The Invesco S&P 500 Equal Weight ETF (RSP) closed slightly higher last week, holding firmly to its 50-day line.

Homebuilders look strong, with more reporting next week. Medical product companies were also leaders, including Boston Scientific and SWAV stock.

Chip stocks are down all month, with the SMH ETF closing just below its 50-day line on Friday. This may be a healthy break, but it’s been a tough one for chip investors. Other tech hardware names struggled last week due to IT spending concerns.

Microsoft, Google, Amazon, and Meta will provide some insight into broader IT spending plans. Their spending plans and growth prospects will matter to key vendors, such as Arista Networks.

At some point, the market rally will break out of its recent range, for better or for worse. The earnings season in the coming weeks, coupled with key economic data and the Fed meeting in early May, could provide the catalyst for a decisive rally or sell-off. Or they could offer a series of mixed signals that add more volatility to a rangebound market.

Time The Market with IBD’s ETF Market Strategy

what to do now

The market rally hasn’t done anything wrong, but it’s currently doing nothing special.

Sideways action and short-lived rallies, coupled with sector rotation, are not a great environment for buying stocks, especially in traditional breakouts. The moment a stock makes a strong move, flashing buy signals, there’s a good chance it will come back down.

Truth be told, it’s probably a good thing that the market rally and major stocks didn’t take off just before gains from Microsoft, Google and hundreds of others.

Now that earnings season is about to get into full swing, it’s not only important to know which holdings have results on hand, but also which rivals, suppliers and customers are reporting.

If the market reacts well to earnings, there could be several buying opportunities. Even then, investors should gradually increase exposure. The risks of specific stocks or the broader market returning gains can remain elevated.

But be prepared to jump on early signups. Have up-to-date checklists. Track a large list of stocks that are performing well or setting up, paying special attention to stocks right around buy points.

Read The Big Picture daily to stay abreast of market direction and major stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarsonfor stock market updates and more.


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