Dow Jones futures will begin trading on Sunday night, along with S&P 500 futures and Nasdaq futures. Late Friday, Moody’s downgraded its U.S. sovereign outlook to negative.
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The stock market bounced back strongly on Friday after Thursday’s pullback, with major indexes hitting new October highs. Although the market breadth remained weak, major stocks performed well as more buy points were cleared or established.
After software initially led the market rally, the chip sector is emerging.
Nvidia (NVDA), broadcom (AVGO), taiwan semiconductor (TSM), KLA (KLAC) and ram research (LRCX) A buy signal flashed on Friday.
meanwhile, mercadolibre (Meri), Roku (Roku) and data dog (DDOG) is a company with recent gains that may provide investors with new buying opportunities.
Investors should be looking for stocks that are setting up and taking advantage of buying opportunities.
Nvidia stock and Datadog are on IBD Leaderboard. Nvidia, Datadog, and MELI stock prices IBD50. DDOG stock is IBD big cap 20. MercadoLibre was IBD’s “Stock of the Day” on Friday.
The video embedded in this article provides a thorough review of market movements, including TSM stock, MercadoLibre, and general electric (G.E.).
Moody’s lowers US outlook
Late Friday, Moody’s Investors Service downgraded the outlook for the United States from stable to negative, citing high budget deficits and political polarization. Moody’s has reaffirmed its current rating on U.S. government bonds at “AAA”.
Moody’s expects the budget deficit to “remain very high” “in the absence of effective fiscal policy measures to reduce government spending and increase revenue in the context of rising interest rates.”
The country’s increasing fragmentation increases the risk that future governments will not address long-term issues.
In the short term, a 45-day government funding measure expires on November 17, but the risk of a government shutdown remains high.
Dow Jones futures today
Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, open at 6pm ET on Sunday.
ETFs showed a 0.1% decline in the Dow Jones, S&P 500 and Nasdaq 100 Friday night following Moody’s negative U.S. outlook.
The yield on the 10-year US Treasury note rose slightly to 4.65%.
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 rise
The stock market rally last week ended long winning streaks for the major indexes, but ended Friday with solid gains.
In last week’s stock market trading, the Dow Jones Industrial Average rose 0.65%. The S&P 500 index rose 1.3%. The Nasdaq Composite rose 2.4%, up just over 2% on Friday. All major indexes were above their October highs, another bullish signal.
Market breadth improved on Friday but remains a concern this week.
The small-cap Russell 2000 is down 3.15% for the week after gaining 1.1%% on Friday.
Invesco S&P 500 Equal Weight ETF (RSP) rose 1.2% on Friday, but was still down 0.6% for the week.
The First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) It went well. Although it lagged the Nasdaq 100’s 2.9% weekly gain, QQEW rose 0.7%, beating Friday’s 50-day gain. Many large tech stocks above the mega-caps had a strong week.
Market leadership is strong. The technology industry is leading the way, but leaders come from a variety of sectors.
While a prolonged market rally may be healthy, bulls don’t want it to stop.
The yield on the 10-year US Treasury note rose 7 basis points to 4.63%, amid daily fluctuations.
U.S. crude oil futures fell 4.15% last week to $77.17 a barrel, but rebounded later in the week.
ETF
Among growth ETFs, iShares Expanded Technology Software Sector ETF (IGV) soared 4.1% along with IGV’s Datadog stock. VanEck Vectors Semiconductor ETF (SMH) rose 5.2%. Nvidia stock is SMH’s No. 1 holding, while TSM stock, Broadcom, KLA, and LRCX are all major components.
SPDR S&P Metals & Mining ETF (XME) fell 3.6% last week as metal prices fell. SPDR S&P Home Builders ETF (XHB) rose 0.1% thanks to Friday’s 2.1% rebound. Energy Select SPDR ETF (XLE) fell 3.8%, while the Healthcare Select Sector SPDR Fund (XLV) fell 0.9%. Industrial Select Sector SPDR Fund (XLI) 0.9% increase
Financial Select SPDR ETF (XLF) rose 0.4%.
ARK Innovation ETF (Arkku) fell 1.8% last week, while the ARK Genomics ETF (arcg) plunged 7.45%.
Top 5 Chinese stocks to watch right now
Chip stocks in buy zone
Nvidia stock rose 7.4% last week to 483.35, clearing Friday’s double-dip buy point at 476.09. The relative force line has updated its highest value. The RS line (the blue line on the chart provided) tracks the stock’s performance relative to the S&P 500 index.
Nvidia’s earnings release date is November 21st, so there isn’t much time to build up a cushion. Also, microsoft (MSFT) is set to unveil its latest AI advances at its Ignite 2023 event on Wednesday, and there is talk that it may unveil its own AI chip to reduce its dependence on Nvidia.
Broadcom stock soared 8.5% last week to 957.52. On Friday, the stock broke off resistance dating back to late May, according to MarketSmith analysis. AVGO stock’s RS line also hit a new high.
Lam Research stock rose 8.1% to 685.43, clearing 665 entries from an ominous double-bottom base. KLA stock rose 6.9% to 534.25, breaking above the buy point of 520.19. On Friday, LRCX stock and KLA were among the S&P 500’s top performers.both can proceed applied materials (AmatAMAT stock also cleared a buy point on Friday.
TSM stock rose 6.35% on Friday to 97.44, double its normal price, breaking above the trendline and short-term high of 200 days. Taiwan Semiconductor Co. reported on Friday that October sales increased 15.7% from the same month last year and 34.8% from September. This signals a recovery from three quarters of declining profits and sales.
Foundry giants include Nvidia, Broadcom, apple (AAPL) and many others. The company is also a large buyer of chip equipment. As such, Taiwan Semi’s sales likely fueled Friday’s bullish moves in NVDA stock, Broadcom, Lam Research, and KLA.
A second chance for these revenue earners
MELI stock fell 1% last week to 1,374.39 after surging 15.6% the previous week after the Latin American e-commerce and payments giant reported strong financial results. MercadoLibre stock currently has a buy point of 1,398.15 on a cup-with-handle basis.
Roku stock fell 4.1% last week to 81.31, forming a weekly session with a buy point of 86.40. Last week, the streaming media platform’s stock price soared 50% from its five-month low. Roku is still in the red, but revenue growth accelerated for the third consecutive quarter.
Datadog stock rose 26% for the week to 103.65 on strong earnings and guidance. The stock has firmed up since Tuesday’s spike. DDOG stock has risen above a 102 buy point from a troubling double bottom base. However, investors may want to use Tuesday’s high of 104.43 as an entry. It can become a handle within a few days.
Timing the Market with IBD’s ETF Market Strategy
what to do now
The stock market rally looks healthy, recovering quickly from Thursday’s pullback. Major stocks are doing well and expanding.
Investors can continue to add exposure over time as long as the market and their positions are performing well.
Use this weekend to work on your watchlist. Since the November 1-2 follow-through day, many stocks have had their deadlines extended and many others have been set.
We want to be prepared in case a new leader breaks out or clears another buy point.
Earnings season has passed its peak but is still active. Investors will also receive inflation data and retail sales figures for October during a busy week of economic reporting.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
X/ Follow Ed Carson on Twitter. @IBD_ECarsonthread of @edcarson1971 and in the blue sky @edcarson.bsky.social The latest information on the stock market, etc.
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