Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures, with key inflation data due Friday morning. Intel (INTC) Y Visa (V) reported after hours with two other Dow components, Chevron (CLC) Y amexpress (AXP), due to early Friday morning. Together with chip gear maker KLA Corporation (KLAC), are five stocks that closed near buy points with earnings expected before the opening bell.
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The stock market rally continued to advance on Thursday amid a barrage of earnings reports and economic data. The major indices closed near highs for the fifth session in a row and are about to break major resistance.
tesla (TSLA) was a big profit generator, skyrocketing thanks to CEO Elon Musk’s optimistic comments about 2023. Apple (AAPL), Microsoft (MSFT), amazon.com (AMZN), nvidia (NVDA), Google’s main Alphabet (GOOGLE) and father of Facebook metaplatforms (GOAL) all had solid to strong gains. None of these stocks are in position, with only NVDA stocks above their 200-day line.
Still, Thursday’s gains were broad-based.
key gains
KLA’s earnings beat views, but the chip equipment maker led lower. KLAC shares fell nearly 6% after hours. The shares rose 1.45% to 428.76 on Thursday. That was still above a handle of 419.67 point of purchase of a long consolidation, but KLAC shares are poised to undermine that on Friday.
Intel’s profits fell short and the ailing chip giant was guided sharply lower for the first quarter. INTC shares fell nearly 10% in extended trading. The shares advanced 1.3% to 30.09 on Thursday. INTC shares are working at 30.48 cup base with handle which mostly formed 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 true market leader.
Visa’s earnings beat forecasts for the fiscal first quarter. V shares rose 1% overnight. The shares were down 0.1% at 224.71 on Thursday after better-than-expected gains from the archrival. MasterCard (BREAST). Visa shares are still in the 220.08 buy point range.
Chevron earnings are available Friday morning, but CVX shares were already up 4.9% on Thursday at 187.79, beating an early entry of 182.65. It is not far from the official buy point of 189.78 of a flat base. On Wednesday night, energy giant Dow Jones announced a $75 billion buyback, as well as a 6% dividend increase.
AXP shares fell 0.6% to 155.88 on Thursday before earnings, holding above its 200-day line. American Express has a buy point of 161.65 from a fund basis. Investors could use a move above Thursday’s high of 158.23 as an early entry.
PCE inflation rate
The December PCE (Personal Consumption Expenditures) Price Index, the Fed’s favorite inflation gauge, will be released at 8:30 am ET as part of the Commerce Department’s Income and Expenditure Report. Economists expect the PCE price index to remain flat versus average. November, with the PCE inflation rate cooling to 5% from 5.5%. Core PCE prices are expected to rise 0.3%, with the inflation rate falling from 4.7% to 4.4%.
Fed chief Jerome Powell recently stated that he is focusing on prices for basic services, excluding housing.
Thursday’s GDP report showed that Basic PCE services less housing increased at an annual rate of 4.7% in the fourth quarter. The 12-month super core inflation rate rose to 4.4% from 4.2%.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures fell 0.3%. Nasdaq 100 futures fell 0.5%. Intel stocks are a component of the Dow Jones, S&P 500, and Nasdaq, though they no longer carry as much weight as they once did. Visa, Chevron and AXP stocks are components of the Dow Jones S&P 500.
The 10-year Treasury yield rose 2 basis points to 3.51%.
Japan and the Netherlands to join US vs. US chip export controls China, Bloomberg reported, with details finalized Thursday night. That could affect the Dutch chip equipment maker. ASML (ASML).
Remember that overnight action in dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock Exchange session.
Join IBD experts as they discuss actionable actions in the stock market rally on IBD Live
stock rally
The stock market rally had some morning wobbles but picked up momentum again towards the close.
The Dow Jones Industrial Average rose 0.6% on Thursday stock trading. The S&P 500 Index jumped 1.1%. The Nasdaq Composite jumped 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, retaking the 50-day line after falling to 230.90 intraday on Wednesday. Google shares advanced 2.4%, Amazon 2.1%. Nvidia rose 2.5% to its highest price since early May.
US crude prices rose 1.1% to $81.01.
The 10-year Treasury yield rose 3 basis points to 3.49%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (ffty) advanced 1.35%. The iShares Expanded Technology Software Sector ETF (IGV) jumped 2.5%, with MSFT shares a major holding. The VanEck Vector Semiconductor ETF (HMS) rose 1.8%, with Nvidia shares the main component. Intel and KLAC are also notable SMH holdings.
Mirroring more speculative historical stocks, the ARK Innovation ETF (ARKK) burst 2% and ARK Genomics ETF (ARKG) rose 0.15%. Tesla stock is a major holding in Ark Invest ETFs. Cathie Wood’s Ark has been loading up on TSLA stock in recent weeks. Ark Invest also owns a small position in the Chinese electric vehicle and battery giant BYD (BYDDF).
SPDR S&P Metals and Mining ETF (XME) rose 0.8% and the Global X US Infrastructure Development ETF (TO PAVE) boosted 1.9% more. US Global Jets ETF (JETS) decreased to 0.15%. SPDR S&P Home Builders ETF (XHB) gained 0.3%. The Energy Select SPDR ETF (XLE) jumped 3.2%, with CVX shares a mammoth holding. The SPDR Financial Select ETF (XLF) advanced 0.5%. The AXP stock is an XLF component. The SPDR Select Healthcare Sector Fund (XLV) rose a further 0.2%.
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Tesla Stock
Tesla shares rose 11% to 160.27, jumping above their 50-day and 10-week lines.
Tesla’s profit rose 40%, slightly outpacing reduced views. Revenue grew 37%, missing some estimates and beating others. Tesla’s gross margins fell more than expected, and that was before big price cuts to kick off 2023. But what sent TSLA shares skyrocketing was the conference call. Chief Executive Elon Musk was optimistic, saying production could reach 2 million electric vehicles by 2023. He said orders have skyrocketed in recent weeks. But will that demand hold without further price cuts?
Tesla will discuss a new electric vehicle at an event on March 1, perhaps a cheaper model that can compete with China’s BYD and others.
Tesla shares are up 57% since their January 1 listing. 6 bear market low of 101.81. But it is still well below the 200-day line.
Meanwhile, BYD shares rose 4.6%, back above the 200-day line for the first time since late August. While it was still building the right side of a very deep cup base, BYD stock arguably offered an aggressive entry on Thursday.
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Market recovery analysis
The stock market rally continued to show strong action on Thursday.
The Nasdaq composite ran to its 200-day line with its best close since mid-September. Just above the 200-day line is the intraday high for December.
The S&P 500 broke above Monday’s high and is about 1% off its December high. The index has broken out of a long-term downtrend line.
The Dow Jones held support at its 50-day line. The Russell 2000 hit a five-month intraday high, surpassing its late-2022 peaks, before pulling back.
Tesla’s stock was a big contributor to the Nasdaq’s rise, clearly, and Microsoft, Nvidia and other giants fared well.
But it wasn’t just about megacaps. The Direxion Nasdaq-100 Equal Weight ETF (QQQE) jumped 1.6% on Thursday to a closing five-month high. The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.8%, hitting a five-month intraday high.
Those who advanced led those who fell 2-1 on the New York Stock Exchange and 3-2 on the Nasdaq. The new highs easily outpaced the new lows.
Some leading stocks pulled back lower, while many others looked extended.
CVX shares were clearly actionable on Thursday, along with other major oil companies. exxonmobil (XOM) and various other petroleum-related names. Allegro Microsystems (ALGM) recovered one point of purchase, while Tractor supply (TSCO) Y wing stop (TO THE) showed buy signals.
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What to do now
The stock market rally, since January 1. 6 follow-up day, has been a strong and healthy uptrend, with modest pullbacks. Breakouts and buy signals have had a much higher success rate than last year.
Therefore, investors should have been gradually accumulating exposure. That may continue, although it could choose to hold off on further buying until the major indices clear some final areas of resistance, especially with higher gains and the Federal Reserve meeting in the next week or so.
The energy, chip, e-commerce, restaurant/retail, housing, biotech, industrial, travel and financial sectors are showing positive action, with stocks selling off buyouts or settling. So make sure your watchlists are complete.
Read The panorama daily to stay in sync with market direction and major stocks and sectors.
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