Dow Jones futures rose Thursday morning, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDA), Salesforce.com (CRM), Snowflake (SNOW) and Dollar General (DG) headlined overnight earnings, while Tesla stock rose after a 3-for-1 split.
The stock market rally rose slightly Wednesday, though the major indexes again hit resistance at their 21-day moving averages. Investors don’t want to commit heavily before Friday’s speech from Fed chief Jerome Powell. The Jackson Hole monetary policy symposium starts today.
Meanwhile, Apple (AAPL), the top investment holding of Warren Buffett’s Berkshire Hathaway (BRKB), edged higher Wednesday. AAPL stock now has a valid handle on a daily chart.
Tesla (TSLA) rose modestly early Thursday, testing key levels after hitting resistance on Wednesday. A 3-for-1 TSLA stock split took place overnight.
Nvidia earnings offer a view into semiconductors, notably the data center and gaming sectors. Salesforce earnings signals demand for business software. So does analytics firm Snowflake, while the SNOW stock reaction gives an indication of investor demand for highly valued former tech leaders.
Nvidia earnings were roughly in line with lowered guidance as gaming revenue fell one-third but data center revenue jumped 61%. The chip giant guided lower on Q3 revenue. NVDA stock fell more than 3% in premarket trade. Nvidia stock edged up 0.2% Wednesday to 172.22.
Salesforce earnings topped views, but the software giant guided low for the current quarter. Despite a new $10 billion buyback program, CRM stock declined 6% in extended action. Salesforce.com stock climbed 2.3% to 180.01 on Wednesday.
Snowflake reported a wider-than-expected Q2 loss, but the 83% revenue gain beat. SNOW stock soared 19% early Thursady. Snowflake stock popped 4.2% to 160.28 on Wednesday, bouncing off the 50-day line after pulling back over the past few weeks.
Meanwhile, Splunk (SPLK), Box (BOX) and Autodesk (ADSK) added to a busy software lineup after the close, with storage giant NetApp (NTAP) and housewares and furnishings retailer Williams-Sonoma (WSM) also reporting. Autodesk, NetApp and WSM stock rose overnight. Splunk and Box fell.
Early Thursday, Dollar General (DG) reported better-than-expected second-quarter earnings, with rival Dollar Tree (DLTR) cut EPS guidance. DG stock fell modestly after Dollar Tree reported, threatening to undercut a buy point. DLTR stock tumbled, set to knife below the 50-day line.
Dow Jones Futures Today
Dow Jones futures were up 0.35% vs. fair value, with CRM stock a drag on blue chips. S&P 500 futures climbed 0.6% and Nasdaq 100 futures rose 0.7%.
China unveiled $44 billion in new stimulus measures to support an ailing economy pressured by Covid and power restrictions.
Copper futures rose 1%.
The 10-year Treasury yield fell 2 basis points to 3.09%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally saw slim-to-modest gains Thursday, but the major indexes hit resistance once again.
The Dow Jones Industrial Average rose 0.2% in Wednesday’s stock market trading. The S&P 500 index advanced 0.3%. The Nasdaq composite gained 0.4%. The small-cap Russell 2000 climbed 0.8%.
U.S. crude oil prices rose 1.2% to $94.89 a barrel. The U.S. rejected Iran’s conditions for a revived nuclear deal, meaning no agreement yet that would release Iranian crude onto world markets.
Natural gas prices climbed 1.5%. Natgas futures tumbled 5% Tuesday, retreating from 14-year highs.
The 10-year Treasury yield rose 5 basis points to 3.11%, the highest since June 29. It’s up 24 basis points over four sessions. Markets are leaning toward a third straight 75-basis-point Fed rate hike on Sept. 21. Of course Fed chief Powell speaks on Friday, and a slew of economic data will be released before the next Fed rate decision.
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Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.4%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.4%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 0.6%. CRM stock is a key IGV component. The VanEck Vectors Semiconductor ETF (SMH) edged down 0.1%. Nvidia stock is a major SMH holding.
SPDR S&P Metals & Mining ETF (XME) rallied 2.1% and the Global X U.S. Infrastructure Development ETF (PAVE) advanced 0.6%. SPDR S&P Homebuilders ETF (XHB) climbed 0.75%. The Energy Select SPDR ETF (XLE) picked up 1.2%. The Health Care Select Sector SPDR Fund (XLV) edged up 0.1%
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rebounded 2.6% and ARK Genomics ETF (ARKG) 3.5%. Tesla stock is a major holding across Ark Invest’s ETFs.
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Apple stock edged up 0.2% to 167.53, finding support off the 21-day line. The Dow Jones tech titan now has a 176.25 handle buy point on a daily chart, with that entry already there on a weekly chart. Apple officially sent out invitations for a Sept. 7 event, with the iPhone 14 unveiling expected.
The relative strength line has been hitting new highs, reflecting AAPL stock’s outperformance vs. the S&P 500 index.
Berkshire Hathaway bought 3.9 million more shares in Q2 for a total of nearly 895 million shares.
That stake in the iPhone maker was worth $122.3 billion as of June 30, but Apple stock has rallied significantly since then. AAPL stock accounted for 41% of Berkshire’s portfolio at the end of Q2.
Tesla stock inched 0.2% higher to 297.10 on Wednesday, but pulled back after reclaiming the 200-day moving average intraday. TSLA stock has an aggressive entry at 314.87, just above short-term highs. The EV giant is a long way from the official buy point of 402.87.
The Tesla share prices are adjusted for a 3-for-1 stock split that took place overnight.
TSLA stock rose 2% before the open, suggesting another move above the 200-day line.
Market Rally Analysis
After sinking below the 21-day moving average on Monday, the major indexes are now hitting resistance at that short-term level. The small-cap Russell 2000 moved back above its 21-day line.
While the major indexes may swing Thursday on Nvidia, Salesforce, Snowflake and other big earnings, the market rally seems to be waiting for Fed chief Powell’s speech.
Stocks that have broken out or rebounded on bullish signals in the past few days continue to act well. But many are extended.
Meanwhile, the recent market pullback is letting a lot of stocks, such as Apple, carve handles.
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What To Do Now
There are stocks that have flashed buy signals in recent days, notably in the energy and EV supplier areas. However, the market rally is in a pullback, hitting short-term resistance. Powell’s speech likely will be a market catalyst. So investors should be cautious about adding much exposure until then.
But be ready. If the market rally revs higher on Fed chief Powell’s comments, a number of buying opportunities could spring to life. So an up-to-date watchlist will be key. If the market skids lower, investors should be prepared to scale down.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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