Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDA), Salesforce.com (CRM) and Snowflake (SNOW) topped a busy night of earnings. —
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The stock market rally edged up slightly, although the major indexes again hit resistance at their 21-day moving averages. Investors don’t want to commit seriously ahead of Friday’s speech by Fed chief Jerome Powell.
Meanwhile, An apple (AAPL), Warren Buffett’s top investment holding Berkshire Hathaway (BRKB), rose on Wednesday. AAPL stock now has a valid daily chart handle. Tesla (TSLA) tests key levels as TSLA’s 3-for-1 stock split takes place overnight.
Key wins
NVDA stock, Salesforce and Snowflake provide insight into key technology sectors. Nvidia’s earnings offer insight into semiconductors, specifically the data center and gaming sectors. Salesforce gains will signal demand for business software. So will analyst firm Snowflake, while SNOW’s stock market reaction gives an indication of investor demand for highly valued former tech leaders.
Nvidia’s earnings were about the same with lowered guidance as gaming revenue fell by a third but data center revenue jumped 61%. The chip giant is targeting lower Q3 revenue. Shares of NVDA fell more than 4% in overnight trading. Shares of Nvidia rose 0.2% in the regular session on Wednesday to 172.22.
Earnings from Salesforce top views, but the software giant is guiding low for the current quarter. Despite a new $10 billion share buyback program, CRM shares fell sharply in extended action. Shares of Salesforce.com rose 2.3% to 180.01 on Wednesday.
Snowflake reported a bigger-than-expected loss for Q2, but the profit of 83% wins. SNOW’s stock jumped overnight. Shares of Snowflake jumped 4.2% to 160.28 on Wednesday, rebounding from the 50-day line after pulling back over the past few weeks.
Meanwhile, Splunk (SPLK), Box (A BOX) and Autodesk (ADSK) added to the busy software lineup after the shutdown, with a storage giant NetApp (NTAP) and retailer of household goods and furnishings Williams-Sonoma (WSM) also reporting. Autodesk and NetApp scores rose overnight, while Williams-Sonoma edged higher. Splunk and Box went down.
early thursday Dollar General (DG) and Dollar tree (DLTR) are on tap, with dollar store chains probably in the best place for consumers right now. DG Stock and Dollar Tree are around the buy spots.
Dow Jones futures today
Dow Jones futures were up 0.2% at fair value, with CRM shares weighing on the blue chips. S&P 500 futures rose 0.3% and Nasdaq 100 futures rose 0.35%.
Remember this night action in Dow futures and elsewhere does not necessarily become an actual trade in the next regular Stock Exchange session.
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Stock market rallies
The stock market rally saw weak to moderate gains on Thursday, but the major indexes hit resistance again.
The Dow Jones Industrial Average rose 0.2% on Wednesday Exchange Trading. The S&P 500 advanced 0.3%. The Nasdaq Composite gained 0.4%. The small-cap Russell 2000 rose 0.8%.
U.S. crude oil prices rose 1.2 percent to $94.89 a barrel. The US has rejected Iran’s terms for a renewed nuclear deal, meaning there is still no deal to put Iranian crude on world markets.
Natural gas prices rose by 1.5%. Natural gas futures fell 5% on Tuesday, retreating from 14-year highs.
The yield on the 10-year Treasury rose 5 basis points to 3.11%, the highest level since June 29. It rose 24 basis points in four sessions. Markets are leaning toward a third consecutive Fed rate hike of 75 basis points on September 21. Of course, Fed chief Powell speaks on Friday and plenty of economic data will be released before the Fed’s next rate decision.
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ETFs
Avg the best ETFsInnovator IBD 50 ETF (FFTY) rose 1.4%, while the Innovator IBD Breakout Opportunities ETF (BOOTH) rose 0.4%. iShares Expanded Tech-Software Sector ETF (IGV) gained 0.6%. CRM shares are a key component of IGV. VanEck Vectors Semiconductor ETF (SMH) decreased by 0.1%. Nvidia stock is a major holding of SMH.
SPDR S&P Metals & Mining ETF (XME) rose 2.1%, and the Global X US Infrastructure Development ETF (PAVING) advanced by 0.6%. SPDR S&P Homebuilders ETF (XHB) rose 0.75%. Energy Select SPDR ETF (XLE) rose by 1.2%. Select Healthcare Sector SPDR Fund (XLV) rose 0.1%
Reflecting the more speculative stocks of history, the ARK Innovation ETF (ARKK) bounced 2.6% and the ARK Genomics ETF (ARKG) 3.5%. Tesla stock is a major holding in Ark Invest’s ETF.
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Apple Stock
Apple shares rose 0.2% to 167.53, finding support outside the 21-day line. Tech titan Dow Jones now has a buy point at 176.25 on the daily chart, and this entry is now available on the weekly chart. Apple has officially sent out invitations for an event on September 7, where the iPhone 14 is expected to be unveiled.
The line of relative strength hit new highs, reflecting the outperformance of AAPL shares against the S&P 500.
Berkshire Hathaway bought another 3.9 million shares in the second quarter for a total of nearly 895 million shares.
That stake in the iPhone maker was worth $122.3 billion as of June 30, but Apple’s stock has risen sharply since then. AAPL stock accounted for 41% of Berkshire’s portfolio at the end of Q2.
Tesla stock
Tesla shares rose 0.2% to 891.29, but retreated after retracing the 200-day moving average intraday. TSLA shares had an aggressive entry at 944.10, just above near-term highs. The EV giant is far from the official buy point of 1,208.10.
The 3-for-1 stock split is taking place overnight, so prices and buy points will adjust by Thursday’s open.
Market Rally Analysis
After falling below the 21-day moving average on Monday, the major indexes are now hitting resistance at this short-term level. The small-cap Russell 2000 is back above its 21-day line.
While the major indexes may be wobbly on Thursday on Nvidia, Salesforce, Snowflake and other big gains, the market’s rally appears to be waiting for Fed chief Powell’s speech.
Stocks that have broken out or recovered on bullish signals over the past few days continue to hold up well. But many of them are extended.
Meanwhile, the recent market pullback is allowing many stocks, such as Apple, to rally.
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What should we do now
There are stocks that have flashed buy signals in recent days, particularly in the energy and EV providers space. However, the market’s rally is in retreat, hitting near-term resistance. Powell’s speech is likely to be a market catalyst. So investors should be careful about adding large exposure until then.
But be prepared. If the market’s rally picks up after Fed chief Powell’s comments, a number of buying opportunities could come to life. So an up-to-date watchlist will be key. If the market goes down, investors should be ready to short.
Read it The big picture every day to stay in sync with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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