Overnight Dow futures were little changed, along with S&P 500 and Nasdaq futures, with the October jobs report looming large.
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The stock market rally, now under pressure, continued to digest Fed Chairman Jerome Powell’s hawkish comments that the peak or “end” of the fed funds rate could be higher than previously expected.
Major indexes fell on Thursday morning. They rebounded from early lows, with the Dow Jones briefly turning positive, but stocks faded into the close.
Megacap techniques continue to put the burden on major indices, especially the Nasdaq. Join Microsoft Amazon.com (AMZN), the parent on Facebook meta pads (dead) and the father of Google the alphabet (The Google) in identifying bear market bottoms. apple (AAPL) above the June low, but this week it eased back towards its October lows.
Key factors included Thursday night’s earnings Amgen (AMGN), howling (howling), EOG موارد Resources (EOG), PayPal (PYPL), parental square roadblock (mint), Progyny (PGNY), Cloud Flare (Clear) And the Paylocation (PCTY).
Amgen stock changed slightly while Yelp and PYPL stock fell. NET stock is down, too, with cloud software names crashing overnight. SQ stocks rose and PGNY jumped. PCTY has not yet been traded.
Cardinal’s health (CAH) early Friday, with CAH stock extending slightly from its buying territory.
Jobs Report
Economists expect the October jobs report to show a nonfarm payroll increase of 210K, with the unemployment rate rising to 3.6%. This will be the third straight month of slowing hiring and the lowest job gain since December 2020, but it’s not great enough to satisfy the Fed.
There are reasons to believe Employment data for October will be much weaker than expected.
However, other employment data this week was hotter than expected, including job opportunities for September and weekly jobless claims.
The October jobs report on Friday will be central to the Fed rate hike expectations and possibly the direction of the stock market, at least in the short term. The November jobs report and two CPI inflation reports will also be released before the Federal Reserve’s December meeting.
Markets now see a 52% chance of a 50 basis point rise on Dec 14th.
Dow jones futures contracts today
Dow futures were down 0.1% against fair value. S&P 500 futures were down 0.1% and Nasdaq 100 futures were up 0.1%.
The 10-year Treasury yield rose 3 basis points to 4.15%.
The Labor Department’s October jobs report is due at 8:30 a.m. ET on Friday. Expect big moves, possibly a sharp one, for Dow Jones futures and Treasury yields.
Remember to work overnight in Dow Jones futures contracts and elsewhere that does not necessarily translate into actual circulation in the next regular session Stock market session.
IBD experts analyze stock market rally on IBD Live
stock market rise
The stock market rally lost more steam on Thursday, with the Nasdaq struggling once again.
The Dow Jones Industrial Average fell 0.5% on Thursday stock market trading. The S&P 500 fell 1.1%. The Nasdaq Composite tumbled 1.7%. Small-scale Russell 2000 gave up 0.6%.
The 10-year Treasury yield rose 6 basis points to 4.12%, but from an intraday high of 4.2%. The dollar jumped after a strong bullish reversal on Wednesday.
US crude oil prices fell 2% to $88.17 a barrel, amid the dollar’s strength and concerns about global demand.
Apple Stock, Megacaps
Apple shares sold 4.2%. Now down 10.2% for the week, the Dow Jones, S&P 500 and Nasdaq giants have pulled back from the 200-day line and are back from the 50-day line.
Google shares fell 4.1%, hitting their lowest level in two years. GOOGL stock is down 10.4% for the week.
Microsoft stock fell 2.7% to 214.25, finally breaking through its October lows to its worst since January 2021. MSFT stock is down 9.2% this week.
Amazon stock lost 3.1% to its lowest point since March 2020. AMZN stock is down 13.6% this week.
META stock fell 1.8%, hitting a seven-year low. The Facebook parent lost 10.4% this week after crashing nearly 24% last week.
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ETFs
between the Best ETFsThe Innovator IBD 50 ETF (fifty) rose 0.4%. iShares Expanded Technology and Software Fund (ETF)IGV) slide of 2.5%, with MSFT stock being a key component. VanEck Vectors Semiconductor Corporation (SMH) lost 1.2%.
SPDR S&P Metals & Mining ETFs (XME) decreased by 0.3%. US Global Gates Foundation (ETF)Planes) decreased by 0.1%. SPDR Specific Energy Fund (SPDR ETF)XLE(Up 1.85% and the Financial Select SPDR ETF)XLF) is down 1.1%. SPDR Healthcare Sector Selection Fund (XLV) decreased by 0.4%.
Shares reflect more speculative stories, the ARK Innovation ETF (see you) is down 0.7% and the ARK Genomics ETF (ARKG) lost 0.9%.
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Market Rise Analysis
The stock market rally moved into “uptrend under pressure” after Wednesday’s big bearish reversal on Fed Chair Powell’s hawkish comments.
The Nasdaq closed below its follow-up day low on October 21st. This is a very bearish signal for a market rally, although the Nasdaq has clearly been late to the current uptrend. Other major indices are well above FTD lows, although the S&P 500 fell below the 50-day line and Dow Jones broke the 200-day line.
The selling continued on Thursday, with the Nasdaq once again leading lower and finishing near session lows.
This is due in large part to the huge platforms like Apple, Amazon, Microsoft, Google, and Meta Platforms.
The S&P 500, Dow Jones, and Russell 2000 performed better, but it faded to the end.
Russell 2000 managed to finish above the 50 day and 21 day streaks.
Equivalent Funds in the S&P 500 Index (RSP) was down 0.5%, much better than the heavy S&P 500, but closed less than 50 days.
Don’t overestimate the resilience of the market outside Apple and the big companies. The Russell 2000 Index and RSP ETF reversed strongly on Wednesday, along with most of the blue chips. And they lost more ground on Thursday.
With the Fed once again consolidating its hawkish stance and Treasury yields rebounding, the stock market will struggle to hold its own, let alone make meaningful progress.
Friday’s jobs report may support a market rally, or send major indicators towards bearish market bottoms.
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What are you doing now
With the market under pressure and blue-chip stocks volatile, investors must maintain their exposure. If the rally rebounds, like the S&P 500 retraces its 50-day line, this could be a signal to consider gradually increasing exposure again.
There are a number of stocks that are relatively close to being exercisable. So work on those watchlists. Stay engaged and be flexible until you’re ready to add exposure or move to the sidelines.
Read The Big Picture Every day to keep up with the trend of the market, stocks and leading sectors.
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