Dow futures rose modestly Thursday morning, along with S&P 500 and Nasdaq futures, but pared gains as oil prices limited morning losses and amid weak jobs data.
The stock market rally took off again on Wednesday as hot labor data raised the likelihood of interest rate hikes further, while JPMorgan’s Jamie Dimon warned of an economic “hurricane.” Major indices pared losses somewhat as the Fed saw slower growth in most parts of the US
On the upside, energy stocks continued to perform well, with LNG playing Golar liquefied natural gas (liquefied natural gas) And the energy superiority (Which), initial public offering, flashing buy signals. gallon petroleum (CPE) near a buy point, and continue to race from the bottom of the base of the V-shaped cup. But all three are volatile. CPE stock fell sharply in pre-market trading with lower crude oil prices.
printer and supercomputer HP Inc. (HPQ) rose 3.9% to 40.34, a record close, after better-than-expected earnings late Tuesday. HPQ stock liquidated the early entry 39.81 which is also in line with the top of the previous base.
Meanwhile, huge companies are not driving the market rise. However, Microsoft’s stock is the only one to approach the 50-day streak apple (AAPL) and Google Parent the alphabet (The Google) is moving near the 50-day retreating lines. Tesla (TSLA) is down 2.4% on Wednesday. TSLA stock, after a significant rebound last week, is hitting resistance at the 21-day exponential moving average.
Main earnings and news
Plays data storage net app (NTAP) And the pure storage (PST) reported earnings late Wednesday, along with Hewlett Packard Foundation (HP) and software makers MongoDB (MDB) And the Veeva . Systems (VEEV). NetApp, Pure Storage, MongoDB, and Veeva rose early Thursday on the back of strong results, while HPE retreated after losing slightly. It’s all pretty far from the heights.
Meanwhile, China’s EV and battery giant BYD (BYDDF) Thursday Reported May sales of an additional 114,943 electric and hybrid vehicleswhich is another record and the third consecutive month above 100,000. Sales are up 250% from the previous year and 8% from April’s 106,042.
BYD stock, which was not yet active, closed Wednesday at 35.75. That was still in the 34.60 early entry range. BYDDF is in a deep cup base of 48% with an official point of purchase of 41.34.
Albemarle stock is running IBD Leaderboard. Microsoft (MSFT) and Google’s stock Long-term leaders of IBD. Callon Petroleum and BG stock is at IBD 50, with CPE choosing to be on Wednesday IBD 50 shares to watch.
Dow jones futures contracts today
Dow futures are up 0.35% against fair value. S&P 500 futures rose 0.4% and Nasdaq 100 futures rose 0.5%.
The ADP employment report showed that private payrolls rose by only 128,000 in May, well below expectations of 240,000. Small businesses showed a drop of 91,000 jobs. Private job growth in April was revised down.
Jobless claims fell from 11,000 to 200,000 in the last week versus 210,000 viewers.
The Labor Department will release its employment report for May on Friday morning.
Crude oil prices are down about 1% after falling about 3% most of the morning. Oil pared losses after reports that OPEC+ is likely to increase production quotas for July by 600,000 barrels per day, a slight increase from recent months. But there are no indications that Saudi Arabia will increase production sharply.
Copper futures jumped 3%.
The 10-year Treasury yield fell 3 basis points to 2.9%.
A JOLTS survey for April showed job openings at 11.4 million, in line with opinions. This isn’t quite standard, but it’s pretty close. Jobs for March were revised to 11.855 million from 11.549 million. People quit at near-record levels, while layoffs reached new lows. The Fed clearly wants to see labor markets pull back. It may have started in May. But it wasn’t in the April JOLTS report.
The employment report for May is due on Friday.
Meanwhile, the ISM manufacturing index rose to 56.1 in May from 55.4, defying views of a slight decline to 54.5.
The Fed’s Beige Book report, released at 2 p.m. ET, showed that economic growth slowed in many areas, with customers rejecting some of the higher rates.
Atlanta Federal Reserve Chairman Rafael Bostic backed away from talk of a “pause” in September. Mary Daly, president of the Federal Reserve Bank of San Francisco, doesn’t see a pause until the federal funds rate is around 2.5%. With a reference rate at 0.75%-1% now, that would mean at least three more rate increases of half a point.
Finally, JPMorgan CEO Jamie Dimon warned of an economic “hurricane” coming our way. “You’d better prepare yourself,” he said at a financial conference. “JPMorgan is preparing ourselves.” The question, Dimon said, is whether it will be a minor or major hurricane.
stock market rise
The stock market opened its rally on Wednesday with solid gains, but hot economic data and “Hurricane Dimon” quickly changed the climate, with major indicators reversing lower. Indexes pared losses in the afternoon, with help from the Federal Reserve’s “beige book,” but they fizzled out again.
The Dow Jones Industrial Average was down 0.5% on Wednesday stock market trading. The S&P 500 fell 0.75%, with ALB stock being the worst performer. The Nasdaq Composite Index sank 0.7%. Small-scale Russell 2000 gave up 0.6%.
US crude oil prices rose 0.5% to $115.26 a barrel. Gasoline, diesel and natural gas futures showed much larger gains.
The 10-year Treasury yield jumped nine basis points to 2.93% in the wake of the JOLTS report and Fed comments. That’s after 10 base points on Tuesday. Investors who bet on a half point rate hike this month and in July are now pricing in a 50 basis point move in September as well.
iShares Expanded Technology and Software Fund (ETF)IGV) advance 0.6% as Salesforce.com (CR) for strong earnings and Service now (Currently) raised routing. MSFT stock is also one of IGV’s huge holdings.
VanEck Vectors Semiconductor Corporation (SMH) sank 1.6%.
SPDR S&P Metals & Mining ETF (XMEand Global X US Infrastructure Development ETFcradle) both fell 0.2%. american global aircraftPlanes) down 3.1%. SPDR S&P Home Builders (XHB1% sank. SPDR Specific Energy Fund (SPDR ETF)XLE) rose 1.6%, and the Financial Select SPDR ETF (XLF) down 1.6%.
Stocks reflect more speculative stories, the ARK Innovation ETF (see you) is down 3.6% and ARK Genomics (ARKG) is down 3.4%. Tesla stock continues to rank number one among Ark Invest’s ETFs. ARK also owns some shares of BYD.
lithium stock cooler
Albemarle stock is down 7.8% while Livent is down 14%, pulling back from early buying points after Tuesday’s solid losses. Early this week, Goldman called Sachs the best in battery metals, and predicted a big drop in hot white lithium prices in 2023.
ALB and Livent stock soared late last week, breaking through key resistance levels as the Nasdaq followed suit. The moves were also a belated reaction to Albemarle’s second upward rally in a month.
ALB stock, at least, found support at the 21-day moving average. On the monthly chart, Albemarle and LTHM stock don’t look too bad, given their massive gains in May. Maybe these arrows will form handles, but maybe not.
Anyone who bought these stocks on Thursday and Friday, even near entry points, is sitting on modest to painful losses.
UBS cut Albemarle’s stock rating to neutral on Thursday. Shares fell modestly.
Agriculture stock wilt
ADM stock fell 4.6% to 86.67, slipping below the 50-day line and erasing several days of gains. On Tuesday, ADM stock was up 2.1%, moving above the 50-day line and flashing an early entry. Bunge stock showed similar action on Tuesday with a gain of 3.1%. But it fell 3.6% to 114.10 on Wednesday, back below the 50-day line.
Fertilizer stock like mosaic (moss), which posted solid gains on Tuesday, sold off on Wednesday.
Market Rise Analysis
The stock market rally suffered modest losses for the second session in a row, away from intraday lows but faded again at the close. The Nasdaq continued to find support at the 21-day moving average.
One concern about the current market rally is that there aren’t many stocks to buy. This situation has not improved, with some promising moves strongly reversing, including LTHM stock, ADM stock and more. The drugmakers haven’t collapsed, but they’re not having a good time this week.
Meanwhile, a number of established stocks are struggling again, including travel plays such as Delta Airlines (DA).
Could many of these names recover if the market rally stabilizes? surely. In the positive scenario, the current pullback may allow the market to form handles and a new pullback. But for now, stocks are down.
The only exception is oil and gas. This sector continues to do well overall, with some stocks at or near buying points. But these names are prone to volatile work.
Growth names remain hard hit, with Treasury yields once again a concern. Even if the market’s recovery shows lasting strength and shares of Microsoft, Google, and Apple begin to take shape, it is unclear whether these huge companies will outperform for the foreseeable future.
What are you doing now
If you get a limited show on Thursday or Friday, you may not have been too hurt and you may still be up for it. But if you step in more forcefully and continue to add to your possessions on Tuesday, you may have suffered some unpleasant losses. This is especially true if you buy more volatile names.
Remember, if you are going to get aggressive in getting in, you have to be aggressive in going back.
Yes, it is possible to sell positions and then the stock and market will rebound quickly. But if that’s the case, you can buy back those bets – or something better. This is a slight cost to protect against a steeper sale.
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