Dow futures fell early Friday, while S&P 500 futures, especially Nasdaq futures, fell as Treasury yields rose. c. B. Morgan Chase (JPM) on earnings, with earnings from Wells Fargo, Citigroup, PNC Financial and UnitedHealth leading Wall Street’s views. Meanwhile, Boeing slid into 737 trouble as retail sales fell more than expected.
The stock market rebounded strongly Thursday after another slower-than-expected inflation reading, along with a rise in jobless claims. Major indices have more or less recovered Wednesday’s losses. The S&P 500 reached its best level in nearly two months, joining the Dow. The Nasdaq held a follow-up day later.
The blue-chips posted strong gains, but there weren’t many flashing buy signals.
Megacap shares were strong on Thursday. apple (AAPL), Amazon.com (AMZN), a parent from Google the alphabet (Google), Meta platforms (meta), Microsoft (MSFT) Tesla stock rose more than 2%. Google stock rose again above a buy point. Apple and Microsoft stocks rose within buy zones. Tesla (TSLAAmazon stock rose within the bases that formed just below the 200-day moving average. Meta shares hit an 11-month high.
The e-commerce and cloud computing giant said Thursday that Amazon is joining Microsoft and Google in the field of generative artificial intelligence. Tesla announced further price cuts in several other markets on Friday.
Metadata stock is running IBD Leaderboard and SwingTrader. MSFT stock is at IBD Long-Term Leaders.
Investors should participate in this bullish trend of the market. But the profits of the big banks loom large.
Dow jones futures today
Dow Jones futures fell against fair value, despite a boost to JPMorgan’s earnings. Boeing and United Health are also components of Dow. S&P 500 futures were down 0.2% and Nasdaq 100 futures were down 0.55%.
The 10-year Treasury yield rose 8 basis points to 3.53%, putting pressure on futures. Fed Governor Christopher Waller said recent data shows the Fed has “not made much progress” on inflation, and said rates need to continue to rise.
The Commerce Department reported early Friday that retail sales fell 1% in March, or 0.8%, excluding automobiles. Both were more than expected. The Federal Reserve is expected to announce industrial production for March at 9:15 AM ET.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
JPMorgan, Citigroup (c) And Wells Fargo (WFC) topped earnings views Friday morning.
JPMorgan reported an uptick in deposits at the end of the first quarter versus the end of 2022, as depositors flocked to the well-capitalized giant despite its lower savings rates. It raised its forecast for net interest income for the full year.
Wells Fargo reported stronger-than-expected net income, while deposits declined slightly.
Super Regional Bank PNC Financial Services (PNC) reported better-than-expected earnings in the first quarter of the year, with revenue nearly identical. PNC deposits have been flat. Net interest margins declined versus the fourth quarter amid higher financing costs. However, the Palestinian National Company reduced its provisions for credit losses.
JPM stock rose sharply, while Wells Fargo and Citi rose modestly. All under the main levels.
The share of the Palestinian National Company rose slightly. Shares rose 1.4 percent on Thursday, but after sliding intraday to their worst level since November 2020.
Bank deposits have fallen for 10 straight weeks, according to Fed data, though smaller banks saw a slight increase in the latest week. The new weekly numbers will be released late Friday. Fears of bank failure have faded, but deposit rates – especially in big banks – are still well below money market funds and short-term treasury bills.
If banks had to start paying exponentially more for deposits, net interest margins would come under pressure. This is particularly true for smaller banks, as depositors are still looking for safer havens in too-big-to-fail giants. Lower and more expensive deposits are likely to affect lending and, in turn, the economy. Bank loans have started to decline in the past few weeks.
Fed staffers see a “moderate recession” later this year due to banking stress, according to minutes from the Fed’s March 21-22 policy meeting released on Wednesday.
Several other major financial releases are due next week, including American bank (Buck), Charles Schwab (SCHW), Goldman Sachs (p) And Morgan Stanley (Ms), as well as several regional and super regional.
Boeing 737 production case
late Thursday, Boeing (Bachelor’s) warned of a drop in 737 Max production and deliveries in the short term, citing a problem with parts from a supplier, apparently Spirit Air Systems (SPR). Analysts had expected Boeing to increase production of the 737 MAX soon. BA shares fell more than 6%.
United Health earnings
also before opening, United Health Group (United nations) reported better-than-expected earnings and revenue for the first quarter, and the results for health insurance companies are kicking off. Giant Dow Jones raised its full-year earnings guidance slightly, roughly in line with Wall Street expectations.
UN stock has been steady in the pre-market trade. Shares are up nearly 1% at 526.21 Thursday, heading towards 558.20 to buy. UnitedHealth has increased over the past two weeks, as Medicare payments are expected to rise. UN stock has 558.20 buy points but is not far from a potential trend line entry. A stop around the trend line might be welcome.
UN stock has returned to long-term leaders.
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Stock market rise
The stock market rebounded again from a bearish reversal on Wednesday, with major indexes gaining momentum during Thursday’s session, closing near their highs for the day.
The Dow Jones Industrial Average rose 1.1% in stock market trading Thursday. The S&P 500 jumped 1.3%. The Nasdaq Composite jumped 2%. Small cap Russell 2000 rose 1.3%.
US crude oil prices fell 1.1% to $82.16 a barrel, retreating from their best levels in nearly five months.
The 10-year Treasury yield rose 3 basis points to 3.45%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) rose 1.55% on Thursday. iShares Expanded Technology and Software ETF (IGV) rebounded 1.9%, with ServiceNow and MSFT shares being big holdings. VanEck Vectors Semiconductor Corporation (SMH) advanced 0.8%.
Reflecting more speculative story stocks, the ARK Innovation ETF (ark(featured by 4% and ARK Genomics ETF)ARKG) 5.6%. Tesla stock is a major holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETFs (XME) was up 2.2%, with FCX shares notably holding. Global Infrastructure Development Fund X US (cradle) increased by 0.3%. US Global Gates Foundation ETF (Planes) increased by 0.2%. SPDR S&P Homebuilders ETF (XHB) increased by 0.4%. Energy Defined Fund SPDR ETF (xle(jumping 0.6% and the SPDR fund)XLV) rose 1.3%.
SPDR Financial Selection Fund (XLF) closed up 0.9%. Shares of JPM, Wells Fargo, and Citigroup are all large holdings of XLF. SPDR S&P Regional Banking ETF (KRE) gained 1.5%. PNC stock is a component of KRE.
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Tesla price cuts
Tesla announced price cuts in Europe, Israel and Singapore on Friday. The electric car giant has lowered prices in several European markets, including Germany and France, for all versions of the Model 3, S and X, as well as the Model Y. In early March, Tesla offered deep discounts in Europe, but not official price cuts.
Tesla has lowered some of the Model 3 prices in Israel, while lowering the Model 3 and Y price tags in Singapore. Last week, Tesla lowered US prices on all of its electric vehicles. It also lowered prices in Australia.
This all comes on the heels of sweeping price cuts around the world in early January, which led to record first-quarter deliveries but also likely impacted margins. The recent wave of cuts suggests margins will come under further pressure.
Tesla’s dividend is due next week. Tesla stock fell 1% before the open. Stocks rebounded Thursday by 3%, but it was an inside day, below all moving averages.
TSLA stock has a buy point of 207.89 cups with the handle, but this entry is just below the 200-day moving average. Investors may want to wait for a decisive move above this key level.
Market rally analysis
The stock market rebounded from Wednesday’s bearish reversal with stronger gains.
The Nasdaq led the way on Thursday. The heavy tech index has rebounded back above 12,000. It’s close to its March 31 high, with the 2023 peak just above that. Volume rose slightly on the Nasdaq, giving the high-tech index an accumulation day after three distribution days in the previous five sessions.
The strong gain in the price higher was a follow-up day for the Nasdaq.
Trading volume decreased on the New York Stock Exchange on Wednesday. However, the S&P 500 rose above early-April highs to its best level since mid-February, not from its 2023 highs. The Dow Jones reclaimed the 34,000 level with a 2023 high above that. The Russell 2000 moved above the 21-day line but is well below the 50-day and 200-day lines.
The winners beat the losers by nearly 5 to 2 on the NYSE and NASDAQ
But despite the wide range and strong price gains for the major indexes, there weren’t many stocks flashing buy signals.
southern copper (SCCO) And Freeport McMoRan (FCX) showed an upward movement, while service now (now) flirting with penetration. STMicroelectronics (STM), HubSpot (interlocutor) And Flying wire (FLYW) All purchase points redeemed.
Invesco S&P 500 Equal Weight Fund (RSP) rose 0.8%, which was a nice gain but definitely lagged behind the S&P 500. The RSP is still below its 50-day low.
Megacap Technologies was a strong performer Thursday and has been throughout 2023. AMZN stock jumped 4.7%, retracing its 50-day streak. Apple stock rose 3.4% while Meta stock rose 3%. Google stock advanced 2.7% as the tech giant moved back above its buy point. Microsoft stock trailed, advancing 2.2%.
A breakout to the highs in 2023 would be a huge move higher for the market. Ideally, bandwidth will continue to improve, with RSP gaining some ground over SPY.
Friday’s earnings reports, especially JPMorgan and other banks, can be a big mover up or down for the market.
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What are you doing now
Thursday’s actions were a positive move for the stock market rally, despite the relatively few buying opportunities.
Investors can add exposure gradually, as long as market trends are higher. It won’t take long for the major indices and blue chips to look battered again.
The market is still in a sideways pattern, with sectors and individual names subject to huge swings at times. Try to build a portfolio with positions in leading stocks from a variety of sectors or topics.
Be prepared to take profits and cut losses quickly. Investors should always remain flexible, but this is definitely not the time to stay in a bullish or bearish mindset.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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