Dow Jones Futures: Apple Earnings Wave, Fed Rate Hike Looms; What to do now

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally had strong gains last week, breaking through some key resistance. The technicians backed off on Friday Snap (SNAP) and other bad returns.




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Apple (AAPL), Microsoft (MSFT), Google Parents letters (Google), Amazon.com (AMZN) and Facebook Parents Meta platforms (Meta) headlines a big week for earnings.

META stock and Google sold off sharply on Friday due to the Snap results and lack of guidance. Microsoft stock fell back to its 50-day line. Amazon pared big weekly gains. But Apple stock is one of five near its 200-day line, and it doesn’t have an obvious buy point in sight.

Meanwhile, the Federal Reserve will meet, with another big 75 basis point rate hike likely coming on Wednesday. Guidance for future moves will be key. Investors are starting to discount a September rate hike, with limited tightening thereafter. This is in large part why the economy slows down rapidly, perhaps even falling into recession. A recession, coupled with even higher inflation, is not an ideal combination for corporate profits.


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While the recent move in major indices is promising, investors should still be cautious when adding exposure.

Many leading stocks have not flashed buy signals. Meanwhile, several promising stocks saw sudden selling, including Dollar Tree (DLTR), Lantheus (LNTH), Good health (AGL) and Li Auto (LI), forcing difficult decisions for investors.

LNTH stock is active IBD Leaderboard, Aquilan left on Friday. Li Auto Stock and Ajilon are available IBD 50. MSFT shares and Google are operating IBD long-term leaders.

A video embedded in the article reviewed important market action, while also analyzing it Cross Country Healthcare (CCRN), Li Auto and DLTR stock.

Dow Jones Futures Today

Dow Jones futures open Sunday at 6 PM ET, along with S&P 500 futures and Nasdaq 100 futures.

Remember that it is an overnight operation Dow futures The next routine elsewhere doesn’t necessarily translate into actual trading stock market session.

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Join IBD experts as they examine stocks that could be in for a stock market rally on IBD Live


Stock market rally

Even with Friday’s pullback, the stock market rally had strong weekly gains.

The Dow Jones Industrial Average rose 2% last week Stock market trading. The S&P 500 index rose 2.6%. The Nasdaq composite rose 3.3%. The small-cap Russell 2000 rose 3.7%.

The 10-year Treasury yield fell 25 basis points to 2.78% Thursday-Friday. The Treasury yield curve is inverted from one year to 10 years. The six-month T-bill rate, at 2.94%, is significantly higher than the 10-year Treasury yield. All of these reflect growing recession risks.

U.S. crude oil futures were down 3% last week at $97.59 a barrel.

ETFs

in the middle Best ETFsInnovator IBD 50 ETF (FFTY) returned 0.6% last week, while the Innovator IBD Breakout Opportunities ETF (Bot0.45% improved. iShares Expanded Technology-Software Sector ETF (VAT) rose 5.4%, with MSFT stock being a key component. VanEck Vectors Semiconductor ETF (SMH) rose 5.6%.

SPDR S&P Metals & Mining ETF (XME) rose 1.9% last week. Global X US Infrastructure Development ETF (sidewalk) rose by 5%. US Global Jets ETF (JETS) rose 0.9%. SPDR S&P Homebuilders ETF (XHB6% up. Energy Select SPDR ETF (XLE) 3.7% and the Financial Select SPDR ETF (45) 3%. Health Care Select Sector SPDR Fund (XLVdecreased by 0.3%.

Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKKUp 4.85% last week and the ARK Genomics ETF (ARKG) 1.2%, though both gave up more than half of their weekly gains on Friday.


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Stock shake-ups, shake-ups

When a leading stock sells or below Point to buy, investors face a tough decision: hold tight, get out, or trim the position. There is no “right” answer. Sometimes stocks bounce back, while others continue to fall — perhaps after a brief bounce. A more cautious approach makes more sense in the current volatile market. Buying closer to the entrance will also provide a little extra cushion.

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DLTR stock had been steadily climbing into buy territory this week when it suddenly plunged nearly 5% on Thursday. Shares narrowly missed the 166.45 buy point but found support in the 21-day line. MarketSmith analysis. At the end, TLDR’s share was less than 1%. On Friday, Dollar Tree shares briefly broke out of buy territory before closing little changed.

LNTH stock hit a record high on Wednesday cup base, but closes nearly 14% above the 50-day line. On Thursday, Lantheus stock fell 7.8% intraday, though it pared its losses to 3.1%. A quick shake? Probably not. LNTH shares fell 4.5% on Friday.

Ajilon stock broke from a bottom on Thursday with a 27.12 buy point. But shares fell 8.3% to 25.18 on Friday.

Shares of Li Auto bounced back from its 21-day streak on July 13 and made solid gains by Monday, July 18. But shares fell below a 21-day line. On Wednesday, LI stock fell 3.7%, off Tuesday’s low. On Thursday, Li Auto almost retook its 21-day streak, but sold off on Friday with optimism. Ultimately, it’s been a rough week of regressions for the China EV maker.

Market rally analysis

Last week the bullishness of the stock market saw a significant improvement. The major indices got above their 50-day and 10-week moving averages, which have been a key sticking point in recent months.

Weak results from Snap, Verizon (VZ), Seagate Technology (STX) and Intuitive surgery (ISRG) was given as a catalyst for Friday’s pullback.

But the market was due for a pullback, especially the Nasdaq and growth stocks. It is better to withdraw the earnings before they are fully recovered.

If everyone is moving toward revenue, that’s a recipe for big sales in real results. That may be especially true at this time, especially as the economy continues to deteriorate rapidly and guidance remains unclear.

Silver’s retreat underscores just how treacherous earnings season has been, not just for the company. Snap’s earnings report weighed on Meta and Google shares, along with other online advertising companies and the broader market.

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Silver’s pullback shows the risks of bottom-fishing, buying battered growth stocks when they run back.

It’s possible that the market fell in mid-June, but that doesn’t mean it’s going to be a quick and easy rally to an all-time high. The market fell in late 2002 and late 2008, but did not continue for several months.

Apart from tech titans Apple, Microsoft, Meta, Google and Amazon, other notable results in the coming week include Exxon Mobil (XOM), Chevron (CVX), Merck (MRK), Pfizer (PFE), General Motors (GM) and Qualcomm (QCOM)

Apple, Microsoft, Merck and XOM stocks are all Dow Jones components.


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What to do now

Investors should still have maximum, moderate exposure. There aren’t many good stocks to buy, and they can be prone to sudden sell-offs. Earnings season and central bank meetings can send the market, various sectors and individual stocks in all sorts of directions.

So be very careful for the next few days. If you are making a new purchase, look for opportunities to buy early and try to buy as close to those inputs as possible.

Keep working on your watch lists. The market rally has shown some strength. You have to be ready to take advantage.

According to Big picture Each day should be in sync with the direction of the market and the leading stocks and sectors.

Follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.

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