Dow Jones futures edged higher on Friday morning, along with S&P 500 and Nasdaq futures. A key inflation report is due as markets begin to price in two more rate hikes by the Fed this year. Nike (NKE) reported belated and mixed earnings. apple (AAPL) earned a new top price target as it surpassed $3 trillion in valuation in pre-market trading.
Stock market gains were mixed as US Treasury yields surged following stronger-than-expected economic data last week.
Financial stocks led the Dow Jones and Russell 2000 gains after 23 big banks passed the Federal Reserve’s annual stress test. Industrial stocks also performed well. The Nasdaq Composite fell slightly.
visa (V.) significantly exceeded the 50-day line, showing signs of early entry. master Card (pose) is also practical. JP Morgan Chase (JPM) rebounded to levels just above a fair buy point. Rambus (RMBS) bullish and rebounded, proposing an aggressive entry. general electric (GE) is also practical.
PCE Inflation Report
The Fed’s favorite measure of inflation, the Personal Consumption Expenditure Price Index, is due to be released on Friday at 8:30 am ET. Economists expect the overall PCE price index to rise by just 0.1% in May and PCE inflation to fall to 3.8% from 4.1% in April. The core PCE price index is expected to rise again by 0.4%, leaving core PCE inflation at just 4.7%.
Meanwhile, Fed Chairman Jerome Powell emphasized the importance of service prices, excluding energy and housing.
PCE inflation report follows a surprisingly strong US economic report, including strong durable goods orders, explosive new home sales, a sharp drop in weekly unemployment claims, and an upward revision to Q1 GDP growth. was announced.
Fed Rate Hike Odds Rise
At the last Fed meeting, policymakers expected two rate hikes this year. Fed Chairman Jerome Powell has emphasized it many times since. Investors didn’t believe there would be a second rate hike, but recent economic reports are starting to shake them up.
Markets are all but certain of a rate hike at the Fed’s late July meeting. Meanwhile, the odds of another rate hike rose to just over 40%, up from less than 20% the week before.
Economic data from the US performed well, but reports from China and Europe were weak.
Overnight, China’s official manufacturing index rose to 49.0 in June, slightly up from 48.8 in May, in line with expectations. However, it was the third straight month of contraction.
dow jones futures today
Dow Jones futures rose 0.3% against fair value. Nike stock weighed in on the blue-chip stocks, while Apple stock got a little boost. S&P 500 futures were up 0.4% and Nasdaq 100 futures were up 0.5%.
The 10-year U.S. Treasury yield rose two basis points to 3.87%.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
Nike earnings were below fourth quarter guidance. Earnings were slightly higher.
Nike shares fell 3% in extended trading. The stock rose 0.3% to 113.37 in Thursday’s regular trading, just above the 200-day line and just below the 50-day slide line. NKE shares are far from the consolidation buying point of 131.31.
Nike’s revenue is important to other athletic footwear and apparel makers, including: On hold (Onon). Onon shares fell 1% in after-hours trading. The Swiss high-end athletic shoe maker fell 1.2% to 31.61 on Thursday, ending a five-session winning streak. It slightly exceeded the 50-day line and the short-term high of 31.45. The official buy point for On Holding shares is based on 34.88 cups.
modelo beer maker constellation brand (STZ) is expected to report its fiscal first quarter results early Friday morning. STZ shares rose 0.1% to 247.04 on Thursday. Stocks rebounded from the 21st line on Tuesday. Constellation Brands shares have a buy point of 248.43 for saucers with handles, but investors can also use 250.14 as an alternative handle.
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stock market rise
Thursday’s rally was mixed but generally strong, with financials and industrials leading the way and growth stocks taking a breather.
The Dow Jones Industrial Average rose 0.8% in stock market trading on Thursday. The S&P 500 Index rose 0.45%. The Nasdaq Composite closed below 1 point. Small-cap Russell 2000 rose 1.2%.
US oil prices rose 0.4% to $69.86 a barrel. Copper futures fell 1.2%, falling for the sixth consecutive quarter.
The 10-year U.S. Treasury yield climbed 14 basis points to 3.85%, reaching the top of a recent range and the highest closing price in three months.
The US dollar remained strong amid rising US bond yields and rising concerns over overseas economic growth.
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) increased by 0.4%. iShares Augmented Technology Software Sector ETF (IGV) closed the trade just below breakeven. VanEck Vectors Semiconductor ETF (SMH) fell 0.15%.
SPDR S&P Metals & Mining ETF (XME) rebounded 2.2%, while the Global X US Infrastructure Development ETF (pave) rose 1.15%. US Global Jets ETF (Jets) fell 0.5%. SPDR S&P Homebuilders ETF (XHB) rose 0.6%. Energy Select SPDR ETF (XLE) rebounded 1.15%, while the Healthcare Select Sector SPDR Fund (XLV) rose 0.65%.
Industrial Select Sector SPDR Fund (XLI) rose 1%. GE stock is a key component of XLI.
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Stocks in the buy zone
Visa stock rose 2.8% to 234.32, hitting a short-term high above the 50-day line. A little above the trend line. All of these offered buying opportunities for the Dow Jones giants. Visa’s flat base buy point is 235.57. Some might view the 8% depth base as a clue to a massive consolidation that goes back almost two years.
MA shares rose 2% to 387.67, partially clearing short-term levels after regaining the 50-day line last week. MarketSmith’s analysis shows Mastercard’s benchmark shares are also flat, with an official buy point of 392.20.
JPM shares rose 3.5% to 143.43, rebounding from the 50-day line. This is slightly above the buy point of 143.37 on a flat basis. JP Morgan and other big banks passed the Fed’s stress test. The banking crisis earlier this year hit small banks hard.
Visa, Mastercard and JP Morgan’s current bases all border breakouts from previous consolidations that failed. The relative strength lines for these financial giants are weak, reflecting the underperformance of the S&P 500 over the past few months.
GE shares surged 0.6% to 107.74, hitting a five-year high and expanding its gains from this week’s 21-day and 10-week lines. This will be the second time General Electric has tried a 10-week line since its breakout earlier in the year. GE stocks, meanwhile, have broken most of their tight three-week pattern. Both offer an opportunity to open a position or add a few shares. The RS line is right at its long term high.
RMBS shares jumped 5.5% to 63.10, rebounding above the 21-day line after rebounding from the 10-week line earlier in the week. The stock has fallen from its intraday high of 64.49. Rambuth, one of the first big winners to break below the 21-day line during the market pullback, has recovered.
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Late Thursday, Citigroup analyst Atif Malik gave Apple a Buy rating and a price target of $240, a Wall Street high, up 27% from Thursday’s close. Malik cited growing gross margins and the growing market share of iPhones over Android devices.
AAPL shares edged higher in overnight trading. Shares rose 0.2% to 189.59 on Thursday, a new all-time high.
Apple stock closed at $2.98 billion in market capitalization, but is expected to top that figure on Friday’s opening.
market rise analysis
A pause in the Nasdaq and the broader market moving forward would be ideal for the current rally in the stock market. Many growth strategies may still be put on hold, but investors probably don’t want a hard shakeout. On the other hand, solid market breadth and improved leadership are positives.
Even if the Nasdaq were to trade flat or slightly lower for a few days, the gap with the 50-day line would narrow somewhat, giving growth stocks a little more upside.
The Dow Jones rallied from the 50-day line early in the week and held firm from the 21-day line. Approaching the 200-day line on June 23, the Russell 2000 has recovered most of its recent losses.
The same is true for the Invesco S&P 500 Equal Weight ETF (RSP). The RSP rose 0.8% on Thursday and 2.5% for the week. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) lost some compared to a 0.2% drop in the Nasdaq 100.
The chip and software session was relatively quiet.
Nvidia (NVDA) met the day within the day, just above the 21st line. The backlash and backlash from the 21st may allow for aggressive entries in the near future. Meanwhile, some, if not all, software plays that acted bullish on Wednesday retreated on Thursday.
The overall housing sector looks solid. Builders are expanding their business, while building materials and retailers are doing well. Industrial stocks such as General Electric have risen, as have some steel markets.
Some financial stocks have performed well, with payment-related stocks such as Visa, JP Morgan, insurance companies and banks sending buy signals. Travel dramas continued to perform well. Cruise lines and airlines are leading the way, but hotels and rental cars are being established as well. Some would view Visa and Mastercard shares as a travel strategy, in part, given their reliance on cross-border payments.
Several medical product companies are near the purchasing point.
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what to do now
Stock market rally continues to offer buying opportunities. Financials and industrials took the lead on Thursday, but RMBS shares showed weakness in some tech stocks.
Having diverse leadership can help you avoid big one-day drawdowns in your portfolio.
Investors may be nibbling on a variety of opportunities, but the current market environment is not the best time to significantly increase exposure in the very short term. There is no need to buy anything new, especially if you have already invested heavily.
If you are making a new purchase, try to act close to the point of purchase. This will minimize the risk of a downside reversal, as some software stocks did on Thursday.
So keep your watchlist up to date and send us your alerts. Then be proactive so that you are ready to take action.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
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