Dow Jones futures will begin trading on Sunday night, along with S&P 500 futures and Nasdaq futures. apple (AAPL), the Federal Reserve and the October jobs report will be another busy news headline.
X
The stock market correction intensified last week, with all major indexes falling to multi-month lows amid mixed performance. The Nasdaq rose on Friday, supported by the following factors: Amazon.com (AMZN). However, it was another weak session overall.
Investors need to be very cautious as they primarily hold cash.
Amazon stock, meta platform (Meta), microsoft (MSFT) and ServiceNow (now) are four large technologies worth noting. All of them are close to point purchase. What’s notable is that all companies are profitable and have experienced accelerating growth over multiple quarters.
Early Monday morning, EV chip maker ON Semiconductor (upon) reports third quarter earnings. Arista Networks (ANET) fell on Thursday due to cuts in Meta’s capital spending plans, but are scheduled for Monday night. Apple’s financial results will be released on Thursday night. Apple stock has fallen below its 200-day price point due to concerns about demand for the iPhone 15, particularly in China.
The Federal Reserve will meet this week, and the market sees no chance of a rate hike on Wednesday. Several policymakers have suggested there is little need for further action as long-term bond yields soar. Fed Chairman Jerome Powell is likely to reinforce that message after Wednesday’s meeting announcement.
The October jobs report concludes the week on Friday.
Metastock is on IBD Leaderboard, currently in stock on your leaderboard watchlist. MSFT stock is featured in his IBD Long Term Leaders.Microsoft stock and meta IBD50. Microsoft and ServiceNow stock prices are IBD big cap 20.
In the video embedded in this article, we discuss this week’s market trends and analyze Microsoft stock. united health group (UNH) and weatherford (WFRD).
Dow Jones futures today
Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, open at 6pm ET on Sunday.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market correction
The stock market correction is getting worse. The index attempted to rebound earlier in the week, but fell sharply again.
As the Israeli military intensifies its operations in the Gaza Strip, Friday will be the third consecutive day heading into the weekend, likely due to concerns between Israel and Hamas.
The Dow Jones Industrial Average fell 2.1% in stock market trading last week. The S&P 500 index fell 2.5%. The Nasdaq Composite fell 2.6%.
The Nasdaq rose slightly on Friday, but it remained well off its highs near its 200-day line. Therefore, a new stock market rally attempt is underway. But it will take more time than that to show a convincing uptrend.
Friday didn’t get off to a particularly convincing start, with large-cap stocks such as Amazon, Microsoft, Meta, and ServiceNow accounting for most of the gains.
On Friday, not only did the Dow Jones Industrial Average fall to its lowest point in seven months, but the Russell 2000 index also sank to its lowest point since November 2020. The small-cap Russell 2000 index fell 2.5% for the week.
Invesco S&P 500 Equal Weight ETF (RSP) For the week, the stock fell 2.45%, hitting a 52-week low.
The First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) fell 0.5% on Friday, while the Nasdaq 100 rose 0.5%, supported by giants such as Amazon and Microsoft. QQEW fell 3.15% for the week.
The tech giants may continue to be leaders, but it is important to broaden their market breadth.
The Nasdaq needs to regain its 200-day line and regain its 21-day line to break the short-term downtrend. A decisive move above the 50-day line could break the downtrend since late July.
The yield on the 10-year U.S. Treasury fell 8 basis points to 4.85%, after briefly exceeding 5% Monday morning.
U.S. crude oil futures fell 2.9% to $85.54 a barrel, despite Friday’s 2.8% rise.
ETF
iShares Enhanced Technology Software Sector ETF (IGV) gave up 2.8%, even though Microsoft and NOW stocks are large holdings in IGV. VanEck Vectors Semiconductor ETF (SMH) retreated by 2.7%.
ARK Innovation ETF (Arkku) plunged 5.4% last week, with the ARK Genomics ETF (arcg) 6.4%.
SPDR S&P Metals & Mining ETF (XME) rose 1% last week. SPDR S&P Home Builders ETF (XHB) fell 1.5%. Energy Select SPDR ETF (XLE) plunged 6.2%, while the Healthcare Select Sector SPDR Fund (XLV) fell 3.8%, hitting a 52-week low. Industrial Select Sector SPDR Fund (XLI) and Financial Select SPDR ETF (XLF) decreased by 2.3%.
Top 5 Chinese stocks to watch right now
microsoft stock
Microsoft stock rose 1% last week to 329.81, but has retreated significantly from its October 25 high of 346.20. It is currently the only Magnificent Seven stock trading above its 50-day line. Microsoft stock’s relative strength line has already hit new highs. The stock has a consolidation buy point at 366.78, but the October 25th high could serve as an early entry.
Microsoft’s fiscal 2024 first quarter revenue increased 27% year-over-year, with revenue increasing 13% to $56.5 billion. Both companies have seen their growth accelerate for three consecutive quarters, with Dow tech giant also leading sales in the second quarter. Unlike the parent companies of Amazon and Google alphabet (Google), Microsoft outperformed Microsoft in terms of growth in cloud computing services.
metastock
Meta revenue increased 168% in the third quarter due to cost reductions and a rebound in advertising sales. Sales increased 23% to $34.1 billion. Growth accelerated for three consecutive quarters. However, the stock fell as Meta noted weakening advertising trends in the fourth quarter. Meta stock fell 3.9% for the week to 296.73, but rebounded on Friday to sit just below its 50-day moving average.
Meta stock is still consolidating at buy points of 326.20 or 330.54. Investors could make a decisive move above the 50-day line as an early entry, but market conditions have heightened the risks.
amazon stock
Amazon’s revenue easily outpaced this, jumping 236%. Sales increased by 13% to $143.1 billion, the second consecutive quarter of accelerated growth. Over the past three quarters, EPS has increased significantly. Although revenue for Amazon Web Services fell slightly short, the tech giant sees momentum heading into the fourth quarter, with AWS poised to capitalize on its AI.
Amazon stock rose 6.8% to 127.74 on Friday, rebounding from its 40-week line. The stock rose more than 2% for the week. AMZN stock has been in a short-term consolidation, with investors potentially viewing it as a double-dip buy point at 134.48. That would require a decisive recovery of the 50-day line.
ServiceNow Stock
ServiceNow stock rose 2.1% last week to 554.01, just below its 50-day line, after briefly regaining that level on Thursday. NOW stock has a buy point of 607.90 from a flat double-bottom base. Investors could use Thursday’s high of 507.90 as an early entry. NOW stock’s RS line has already hit new highs, which is a bullish sign.
ServiceNow’s revenue increased 49% and revenue increased 25%, both of which are the second consecutive quarters of accelerated growth. The software giant also provided guidance on subscription revenue.
Timing the Market with IBD’s ETF Market Strategy
what to do now
The stock market is entering a correction phase. All major indexes are below their 200-day lines. And the situation inside the market seems to be getting worse.
We live in an era where most, if not all, of our finances are covered by cash. If you have a long-term winner, you can hold on to it. But at some point, investors must have boundaries to cut or exit winning positions.
There is no need to rush your recovery. The market needs several days of strong performance to show that the recession is over. An early morning rally like Friday’s modest Amazon-led rally is hardly enough.
There are very few stocks in the position, and the number of stocks close to the position is relatively small. So keep an eye on stocks that are showing relative strength. At this point, it should include names like Microsoft stock and ServiceNow, as well as energy-related stocks like WFRD stock. However, it is unclear which stocks and sectors will lead the market in the next uptrend.
So keep your screens running and stay involved.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
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