Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures. Investors expect huge weekly earnings like: Tesla (TSLA), microsoft (MSFT) and Boeing (ba).
Equity market gains eased mid-week, with major indices falling below major moving averages. But they rallied Friday, especially Nasdaq and technology stocks. After lagging in 2022, the Nasdaq is leading the large-cap index in 2023, favoring technology growth stocks.
The recent sell-off has given many stocks a breather, offering new buying opportunities, such as forging handles.
Investors should exercise extreme caution, but be careful with new positions. The market rally is approaching critical levels. Indices, specific sectors, and even individual stocks can experience volatility during earnings periods.
Hundreds of companies are due to report this week. Here are 10 revenue reports to watch. Tesla, Microsoft, Boeing, Service Now (now), chevron (CVX), visa (V) and master Card (MA), and Chip Gear Titan ASML (ASML), Ram Research (LRCX) and KLA Corporation (KLAC).
These reports provide insight into their respective industries and can have a significant impact on the market as a whole. Tesla and Microsoft stocks still have a lot of repair work to do, while Boeing stocks are on hold. NOW stocks may be close to aggressive early entry. CVX stocks, Visa and Mastercard are all close to buying points. LRCX and KLA are similar, but ASML is a bit out of reach.
KLAC strains are included in the IBD Big Cap 20. Microsoft stock and ASML are included in the IBD Long Term Leaders.
Microsoft, Boeing, Chevron and Visa stocks are all constituents of the Dow Jones.
Video embedded in this article reviews and analyzes key market weeks Etsy (ETSY), LRCX Stock, ServiceNow.
dow jones futures today
Dow Jones futures open at 6pm ET, along with S&P 500 and Nasdaq 100 futures.
Note that overnight trading on Dow futures or elsewhere does not necessarily lead to actual trading on the next regular stock market session.
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stock market rally
The stock market’s gains reversed on Wednesday and fell further on Thursday, but ended relatively well.
The Dow Jones Industrial Average fell 2.7% in last week’s stock market trading. The S&P 500 Index fell 0.7% for him. The Nasdaq Composite is up 0.55% on him. The small-cap Russell 2000 fell 1.1% on him.
The 10-year Treasury yield fell 3 basis points to 3.48% on Friday. Weekly yields he hit 3.37%, the lowest in four months.
Expiring February crude futures contracts rose 1.8% to $81.31 a barrel last week. The March contract, the new near-term crude oil contract, closed at $81.64.
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 1% last week. The iShares Expanded Tech-Software Sector ETF (IGV) is up 1.45% with heavy holdings in both MSFT stock and ServiceNow. The VanEck Vectores Semiconductor ETF (SMH) was up 0.7%. ASML shares are large holdings along with LRCX, KLAC and TER.
Reflecting more speculative story stocks, the ARK Innovations ETF (ARKK) rose 1.4% last week while the ARK Genomics ETF (ARKG) fell 1%. TSLA shares remain the primary holding across Ark Invest ETFs. In fact, Cathie Wood’s Ark has increased its stake in Tesla again in recent months.
The SPDR S&P Metal Mining ETF (XME) is down 0.5% after two big weekly gains. The Global X US Infrastructure Development ETF (PAVE) is down nearly 3%. The US Global Jets ETF (JETS) is up just 0.35%, but is poised to soar in 2023. The SPDR S&P Homebuilders ETF (XHB) is down 2.4%.
The Energy Select SPDR ETF (XLE) rose 0.7%, marking its sixth straight week of gains. Chevron stock is the main component. The Financial Select SPDR ETF (XLF) is down 2.1%. The Healthcare Select Sector SPDR Fund (XLV) fell 1.1%, his sixth drop in seven weeks.
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Tesla’s earnings are due Wednesday night. Investors expect a 34% increase in earnings and a 39% increase in earnings. This was the first quarter in years where revenue growth outpaced profits and is an early sign of pressure on margins.
The future prospects will be closely watched, especially since there will be significant global price reductions in 2023. Is Elon Musk planning to provide more details on the Cybertruck, and are he planning to confirm any reported improvements to the Model 3? What about the new EV factory? Tesla’s stock rose 9% last week to 133.42, above its 21-day moving average, after falling to 101.81 during the day on Jan. 6.
Microsoft’s earnings results are scheduled for Tuesday night. Analysts expect Microsoft’s revenue to fall slightly and earnings to rise slightly. Microsoft’s results will be key for software makers, the PC sector and cloud computing competitors. Amazon.co.jp (AMZN). Last week, the Dow Jones tech giant said it would cut 10,000 jobs, or 4.5% of its staff.MSFT shares rose 0.4% last week, hitting resistance at the 50-day line. Microsoft’s bottom is almost certainly below his 200-day line. But breakouts require clearing of the 200-day line and a long downhill trendline.
Boeing’s earnings come Wednesday morning, with a modest gain expected after a string of losses. Investors are betting on earnings and cash flow recovery over the next few years. Boeing’s stock fell 3.4% last week to 206.76. After a big move, the BA stock should set up again.
ServiceNow earnings are due Wednesday night. Analysts expect EPS to increase 38%, the second straight quarter of accelerating growth. Management is bullish on his IT spending in 2023. This report is the key to high value business software names. NOW shares surged 6.5% to 441.83 after jumping 13% the previous week. The stock cleared the 200-day line on Friday, hitting a four-month high and ending a long downtrend. It offered very early entry, but earnings going forward make it very risky.
Earnings for Chevron are expected to be announced on Friday morning. Analysts expect EPS growth to pick up even more in the quarter compared to the same quarter last year, but slowed in the second and third quarters. CVX shares rose 1.8% last week to 180.81, regaining the 50-day line. Chevron is flat but should offer early entry if it breaks out of Wednesday’s high of 182.38. Chevron’s earnings are important to the oil and gas sector, especially oil majors such as: exxon mobil (XOM).
Mastercard earnings are expected early Thursday and Visa earnings after the close of trading. Mastercard’s EPS is up nearly 10%, while Visa’s is up 11%. Results and comments from major credit card companies are important for gaining insight into other payment companies and consumer spending trends. Both Visa and Mastercard stocks are trading near key resistance levels dating back to early 2022, grappling with long-term consolidation.
ASML’s results are due early Wednesday, with Lam Research and Teradyne announced after the close of trading. The KLA will report later Thursday. ASML revenues are expected to decline 11%, while Lam Research revenues should rise 15% and KLA revenues 27%. Guidance is key for what is likely to be a difficult 2023. intel (INTC) provides insight into the semiconductor sector and end markets.
ASML inventory is extended from the 200 day line. LRCX stock is trading on a bottom basis just above the 50-day and 200-day lines. KLAC stock has a small handle on the consolidated weekly chart dating back to one year.
Market rally analysis
The stock market rally was due for a pullback, but there was a pullback. Major indexes fell sharply on Wednesday and continued their decline on Thursday. However, they rounded up Thursday’s lows and rebounded strongly on Friday.
The Nasdaq has risen weekly and definitively regained its 50-day moving average line on Friday. Friday’s action was another follow-through day for the Nasdaq.
The S&P 500 has regained the 50-day line and sneaked above the 200-day line. The Russell 2000 may find support on his 200-day chart and look to test a late 2022 peak soon.
The Dow Jones ended the week well below the 50-day chart, the biggest drop of the week.
Outside of the Dow, the recent decline looks normal and healthy so far.
The pause is giving major stocks an opportunity to get behind the wheel, but few to collapse. If anything, a slightly longer pullback could help in this regard.
However, the major indices have some important resistance levels. The S&P 500 must decisively retake the 200-day line with this one-week high and his December peak as a key milestone.
A financial closing can be a catalyst for large market gains or losses, or both.
This week also provides the first reading of Q4 GDP and the PCE Inflation Gauge for December. That paves the way for the Federal Reserve’s policy meeting on February 1.
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Tech revival continues
The stock market rally seems to be turning towards technology growth after a long break. The Nasdaq Composite closed in a bear market on Dec. 28, but in 2023 the Nasdaq is up 6.4% of his. The SMH Chip ETF was up 12%, the IGV Software ETF was up 5.5% and the speculative ARKK was up 16.8%.
What is reviving technology growth?
Yields on government bonds are falling, which is good for expensive growth stocks. Meanwhile, there is hope for a soft landing for the economy as China and Europe improve and the Federal Reserve’s rate hikes appear to be nearing a peak.This raises the stakes that much of the bad news is priced into growth stocks
The Russell 2000 is another risk-on strategy, rising 6.1% in 2023, roughly matching the Nasdaq.
The S&P 500 started the new year up 2.5%. The Dow Jones is up 0.7%, only positive thanks to Friday’s solid gains.
There are not many names of technological growth that have been positioned yet. LRCX stock is one of the emerging large chip leaders. Software is missing, but is now in stock. E-commerce is recovering, Mercado Libre (Meri) break out Etsy (ETSY) Setting up. Chinese e-commerce and Internet companies are also doing well.
The big earnings calls over the next two weeks will be tech-related, so investors can see if there’s a foothold in a rebound in growth.
Meanwhile, many financial stocks struggled last week, while defense contractors and defensive food and consumer goods stocks stumbled.
But metals and mining stocks are bullish. Airlines are flying, and investors are moving into hotels. Retail is a mixed bag. The same is true of medicine. Biotechnology looks interesting, but health insurance companies are weak.
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what to do now
The market rally showed some resilience late last week, along with many blue chip stocks. It is still possible that the current pullback will resume and cause more sustained damage. Financial closings can trigger big moves not just for certain stocks, but for competitors, suppliers, and customers.
So while the markets, especially the Nasdaq, may be signaling ‘risk on’, investors should be cautious about adding exposure. One possible option is to go through Market or Sector ETFs to avoid single security risk. If you want to add some exposure, be ready to go out quickly. If you are not ready and have no intention of exiting immediately, you should enter the position more conservatively.
However, the next few weeks could offer many buying opportunities. Prepare your watchlist and stay engaged.
Read The Big Picture daily to understand the market direction and key stocks and sectors.
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