Dow Jones futures will begin trading on Sunday night, along with S&P 500 futures and Nasdaq futures.A week of huge earnings looming, including Microsoft, Metaplatform and Google’s parent company alphabet (Google).
Stock markets have suffered heavy losses over the past week as U.S. Treasury yields soared and the overall reaction to earnings was muted. The Nasdaq narrowly avoided falling below its September 27 low, but small-cap stocks hit a 52-week low. Major stocks showed further weakness, with several stocks falling further on Friday.
Investors primarily need to have cash, but they need to stay involved.
Microsoft stock, Metaplatform, ServiceNow, Vertiv, and Cadence Design Systems are near buy points. Google stock is probably moving closer to a variety of stocks. Amazon stock is a laggard, but a strong earnings reaction could lead to action.
These gains are not only significant, but will have a significant impact on key sectors and the market as a whole. Amazon, Google, and Microsoft are giants of cloud computing. Microsoft, Google, Meta, and Amazon are big names in artificial intelligence, ServiceNow is also touting AI efforts, and Vertiv is also touting big AI-related efforts. Microsoft and ServiceNow provide business software insights. Cadence Design has a major impact on competition among rival electronics design software synopsis (SNPS).
Metaplatform is turned on IBD Leaderboard, currently in stock on your leaderboard watchlist.Metastock, Cadence Design is here IBD50. Google stock and ServiceNow are IBD Big Cap 20. Microsoft and CDNS stocks are included in the IBD Long-Term Leaders list.
The video embedded in the article discussed the weekly stock market movements, analyzing the stocks of Microsoft, Meta, and Google.
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.
The stock market tried to hold on or even higher at the beginning of the week, but it hit resistance and has fallen sharply over the past three sessions. Some of the moves in stocks and bonds on Friday likely reflected investor caution heading into the weekend as fighting between Israel and Hamas continues.
The Dow Jones Industrial Average fell 1.6% in stock market trading last week. The S&P 500 index fell 2.4%. The Nasdaq Composite fell 3.2%.
On Monday, the Nasdaq came within a few points of its September 27 low. The tech stock ratio closed Friday at a four-month low and ended below the low of the October 6 follow-through day, a very bearish sign.
The S&P 500 index was just below its 200-day line and close to breaking its recent low. The Dow Jones also fell below 200 days.
Market breadth remains poor, with losers outnumbering winners and new lows continuing to beat new highs.
The small-cap Russell 2000 fell 2.3%, hitting a 52-week low. Invesco S&P 500 Equal Weight ETF (RSP) fell 2.3% to a seven-month low. The First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) retreated 3%% to a four-month low and fell below the 200-day line.
Major stocks were under great pressure. On Friday, cracks began to appear in some of the most resilient names.
Perhaps the last few days have been a shakeout before the year-end rally, but perhaps the real shakeout will occur after breaking below recent lows, and probably not soon.
As long as the 10-year Treasury yield continues to rise, it’s hard to imagine the market moving higher sustainably. Despite Friday’s decline, the 10-year Treasury yield is showing no real signs that it is ready to flatten or fall to meaningful levels.
The yield on the 10-year U.S. Treasury soared nearly 30 basis points in the week to 4.93%. The 10-year Treasury yield rose to 4.996% on Thursday, its highest level since 2007. On the other hand, the yield on 2-year bonds is.
U.S. crude oil futures rose 1.2% to $88.75 a barrel last week as tensions in the Middle East heightened supply concerns. Oil prices have retreated from Friday morning’s above $90 mark. Copper prices fell 1.1% to close at their lowest level in nearly a year.
Among growth ETFs, Innovator IBD 50 ETF (FFTY) fell 4% last week. iShares Enhanced Technology Software Sector ETF (IGV) fell 3%, but looked okay until Friday’s 2.5% drop. Microsoft stock and ServiceNow are key members. VanEck Vectors Semiconductor ETF (SMH) fell 4.2%. CDNS stock is part of IGV and SMH.
SPDR S&P Metals & Mining ETF (XME) fell 3.1% last week. SPDR S&P Home Builders ETF (XHB) plunged 4.5%. Energy Select SPDR ETF (XLE) rose 0.75%. Healthcare Select Sector SPDR Fund (XLV) fell 1.6%. Industrial Select Sector SPDR Fund (XLI) slipped 3%.
Financial Select SPDR ETF (XLF) fell 3%, and CME stock became part of the ETF.
Top 5 Chinese stocks to watch right now
Super large stocks to watch
Microsoft’s financial results are scheduled to be released on Tuesday night. Analysts expect Microsoft’s earnings per share to rise 13% to $2.65 in the first quarter. Sales are expected to increase 9% to $54.5 billion. Growth in Azure cloud computing is key. Investors will also be looking for some indication of when AI will spur revenue growth. MSFT stock fell 0.3% for the week to 326.67, retreating to just above its 50-day line on Friday. The buy point for Microsoft is 366.78, but investors could use 336.88 or 340.86 as an early entry.
Google’s financial results will also be released later Tuesday. Profits are recovering, partly because comparisons have become easier. AI will also be in the spotlight. Google stock was up 1.3% last week at 135.60. GOOGL stock is currently in a tight 3-week pattern with possible 50-day/10-week support. But they will be aggressive entries in a weak market.
After the close of trading on Wednesday, meta profits will be in full swing. Cost reductions and the resurgence of advertising have accelerated this path. META stock fell 1.9% to 308.65, retreating from a buy point at 362.20 and retreating toward its 50-day line.
Amazon’s earnings are coming Thursday night. Amazon should bounce back from last year’s tough conditions and profits should soar. AMZN stock fell 3.6% to 125.17 last week, retreating from its 50-day line. Amazon’s buy point is 145.86, but a decisive move above the 50-day line would allow for early entry.
These earnings reports will have a major impact on AI, cloud computing, software, e-commerce, and more.
Other main income
Cadence Design’s earnings are expected to be released Monday night. CDNS stock fell 4.6% this week to 238.64, below Cup With Handle’s buy point of 247.50.
ServiceNow’s earnings are expected to be released Tuesday night. Now shares fell 1.3% to 542.51. The stock crossed the 50-day line on Tuesday, but it didn’t last long, falling 3.1% on Friday. ServiceNow stock has a buy point of 607.90 on a double bottom basis. A break above Tuesday’s high of 574.25 will result in an early entry.
Vertiv’s earnings are expected early Wednesday. VRT stock fell 6% last week to 36.74, well below the sideways buy point of 40.41 and below its 50-day line, according to MarketSmith analysis.
CME earnings Wednesday morning. CME stock fell 3% to 212.81, but remains in a buy zone from a sideways base-on-base pattern.
WFRD settlement on Wednesday morning. WFRD stock fell 2.7% to 92.97, retreating toward its 50-day line. Stocks are engaged in short-term consolidation. Anything above 97.88 will act as early entry.
Timing the Market with IBD’s ETF Market Strategy
what to do now
The S&P 500 and Nasdaq are teetering at recent lows, and major stocks are slumping. It’s true that some stocks, like Meta and Google, have held up reasonably well, but even those are losing ground amid the intense sell-off.
Investors should pay close attention to stocks that are relatively strong. But now is not the time to buy. Instead, it took a week to scale out the position.
Remember that during market downturns, relative winners are often absolute losers.
Earnings could be a catalyst for Microsoft, Vertiv, and the broader market, but in what direction? So far, stocks have generally sold on earnings and guidance.
Don’t get excited if the market rebounds early next week. Significant gains in major indexes are needed to signal an end to the recent economic downturn. Earnings waves are increasing uncertainty.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
You’ll probably also like:
Why this IBD tool simplifies your search for top stocks
Want to make quick profits and avoid big losses? Try SwingTrader
The best growth stocks to buy and watch
IBD Digital: Get access to IBD’s premium stock lists, tools and analysis now
Tesla vs. BYD: EV giants vie for the throne, but which one is better to buy?