Dow Jones Futures Await Big Earnings; Market Rally Resilient, Tesla Falls On
Dow Jones futures fell slightly after hours, along with S&P 500 futures and Nasdaq futures. JPMorgan, Bank of America, UnitedHealth and Delta Air headline Friday morning earnings.
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The stock market rally showed resilience after a volatile morning following a hotter-than-expected CPI inflation report and the launch of Bitcoin ETFs. The Dow Jones hit a record high soon after the open while the S&P 500 set a 52-week best. But the major indexes reversed solidly lower, only to rebound to close essentially flat. Treasury yields reversing lower were a key factor for the afternoon market bounce.
NFLX stock reclaimed a buy point as Netflix (NFLX) sees strong growth for its add-supported tier. Microsoft (MSFT) nudged above an official buy point, continuing a strong week and nearly overtaking the market cap of fellow Dow giant Apple (AAPL).
Many other leaders advanced after holding support at key levels.
Eleven spot bitcoin ETFs began trading Thursday after the SEC granted approval late Wednesday. Bitcoin initially jumped above $49,000 before erasing gains. Meanwhile, bitcoin stocks such as cryptocurrency exchange Coinbase (COIN), bitcoin miner Marathon Digital (MARA) and bitcoin holder MicroStrategy (MSTR) reversed lower.
Tesla (TSLA) extended a recent sell-off, breaking key levels amid bad news from Hertz (HTZ) and more. Overnight, Tesla cut China prices.
Key Earnings
JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) kick off earnings, with BlackRock (BLK), UnitedHealth Group (UNH) and Delta Air Lines (DAL) also reporting.
JPM stock is extended from a base, but is pausing at the top of a two-year consolidation. BofA, Wells Fargo and Citigroup are around possible entries. So are UnitedHealth stock and DAL stock. BLK stock is in a buy zone.
Microsoft stock is on IBD Leaderboard and the IBD 50. Netflix stock and Microsoft are on SwingTrader. UNH stock and Microsoft are on IBD Long-Term Leaders. Netflix is IBD Stock Of The Day.
The video embedded in the article reviewed Thursday’s market action and analyzed Netflix stock, Shift4Payments (FOUR) and Samsara (IOT).
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures retreated 0.2% and Nasdaq 100 futures declined 0.25%.
Crude oil futures rose 2%. The U.S. and U.K. are launching military attacks vs. Houthi rebels in Yemen, who have virtually shut down Red Sea shipping with drone attacks.
The Labor Department will release the December producer price index at 8:30 a.m. ET. Some key details funnel into the Fed’s favorite inflation gauge, the core PCE price index.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally closed with minimal moves, but that belies a volatile session.
The Dow Jones Industrial Average edged higher in Thursday’s stock market trading, the S&P 500 lost less than 0.1%, while the Nasdaq rose less than one point.
The Dow briefly topped its all-time high on Jan. 2. The S&P 500 set a 52-week peak, less than 0.5% below its January 2022 all-time high. The Nasdaq composite topped 15,000. The major indexes then fell back, with the Nasdaq down more than 1% at the lows, before rebounding.
The small-cap Russell 2000 hit its lowest level in a month before paring losses, but closed down 0.75%, below the 21-day line.
The major indexes hit resistance at a natural level, but it’s clear the stock market rally doesn’t want to go down. Leading stocks erased gains or retreated intraday, but rebounded from support.
Treasury yields had a lot to do with Thursday’s stock market action. The 10-year Treasury yield hit 4.05% intraday, but reversed lower to close down 5 basis points to 3.97%. The two-year yield sank 11 basis points to 4.26%, the lowest close in 2024.
The December CPI report came in slightly stronger than expected early Thursday. But markets see a 71.4% chance of Fed rate cuts starting in March, up slightly vs. 66.4% on Wednesday.
U.S. crude oil prices rose 0.9% to $72.02 a barrel.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.8%, with MSFT stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) climbed 0.6%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) fell 2.4% and ARK Genomics ETF (ARKG) slumped 3.85%. COIN stock is the No. 1 holding across Ark Invest’s ETFs. Tesla stock is still a major holding.
SPDR S&P Metals & Mining ETF (XME) slipped 0.35%. U.S. Global Jets ETF (JETS) ascended 0.3%, with DAL stock a major holding. SPDR S&P Homebuilders ETF (XHB) stepped up 0.2%. The Energy Select SPDR ETF (XLE) added 0.3% and the Health Care Select Sector SPDR Fund (XLV) edged down 0.1%, with UNH stock a huge component.
The Industrial Select Sector SPDR Fund (XLI) dipped 0.2%.
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