Dow Jones Futures: Jobs Report Tests ‘Soft Landing’ Market Rally; Approved Tesla Stock Split

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Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures, ahead of Friday’s jobs report. Tesla (TSLA) shareholders approved a 3-for-1 stock split on Thursday evening.The stock market rally ended mixed on a relatively quiet Thursday for the major indices, but there were some big gains.

Vertex Pharmaceuticals (VRTX), Amgen (AMGN) and Neurocrine Life Sciences (NBIX) reported better-than-expected gains on Thursday night, as biotechs remain a leading sector. All closed near buying points and key support levels.

Dow Jones Futures Today

Dow Jones futures were up 0.1% from fair value. S&P 500 futures and Nasdaq 100 futures were up 0.1%.

The Department of Labor will release the July jobs report at 8:30 a.m. ET. The employment data is sure to fluctuate Dow futures and government bond yields.

Remember that nighttime action in Dow Futures and elsewhere does not necessarily translate into actual trading in the following regular stock market session.

job report

Economists expect nonfarm payrolls to rise by 250,000 in the July job report, against 372,000 in June. That would still point to a healthy workforce in a slowing economy.

Keep an eye on the household survey, which showed a sharp drop in employment in June. It is more error-prone than payrolls, but often shows that the job market is spinning first.

Meanwhile, the unemployment rate is expected to remain stable at 3.6%, while the annual growth rate in hourly wages slows just a little to 5%.

The number of unemployment claims rose to 260,000 last week, the highest number in nine months. The number of vacancies, while still high, has fallen rapidly over the past two months.

The Federal Reserve, especially Fed chief Jerome Powell, has argued that a soft landing is possible. In recent weeks, investors have begun to believe the idea that the economy will weaken barely enough to cool inflation enough to prompt the Federal Reserve to slow and then halt Fed rate hikes, without triggering a major drop in demand and employmentBiotech Revenue

VRTX shares tilted lower in overnight trading as Vertex earnings prevailed and the biotech giant raised its full-year product revenue target. Shares fell 0.1% to 274.85, below the 50-day line and buy points of 276.10 and 279.23.

AMGN stock lost 1% in extended action after Amgen Revenue Surpassed and the company largely reaffirmed its full-year outlook. Shares fell 0.1% to 246.98 on Thursday, trading near the 50-day line. Amgen shares have a buy point of 253.87. The biotech giant announced a $3.7 billion buyout from ChemoCentryx (CCXI) before the opening on Thursday.

NBIX stock fell slightly overnight Merits of Neurocrine and revenue exceeded. The company raised sales expectations for its lead drug, but also delayed a treatment that was not performing well. Shares rose 2% to 95.93 on Thursday, recovering from the 50-day line. NBIX shares have a buy point of 100.10 handle.

VRTX stock has run out IBD standings and the IBD Big Cap 20 index. The iShares Biotechnology ETF (IBB) is on SwingTrader.

Tesla Stock Split, Annual Meeting

Tesla shareholders will approve a 3-for-1 stock split at its annual meeting on Thursday evening, two years after a 5-for-1 stock split. Tesla proposed the TSLA split in June. It is unclear whether the actual split will have a major impact on Tesla stock. A TSLA stock split makes playing options cheaper.

Speaking at the annual meeting, CEO Elon Musk said, “This year, I swear to you,” Tesla is solving self-driving with a smile.

Musk hinted that Cybertruck’s pricing and specs will be different from what Tesla initially announced in 2019, citing inflation. The drawn prices and specifications always seemed highly unlikely, while material costs and 4680 battery delays were added to the program.

Musk also expects production to pick up in the second half of the year. The Shanghai plant is getting capacity-boosting upgrades, while Tesla has two new plants in Berlin and Austin that have grown at an icy pace. Musk said Tesla could eventually have 10-12 factories and may make an announcement about the location of the next factory later this year.

Tesla stock rose a fraction overnight. Shares rose 0.4% to 925.90 during Thursday’s regular session, just above the 200-day line. TSLA shares were up sharply in the stock split news, but that likely reflects Tesla’s broad market rally and better-than-expected earnings on July 20. Tesla shares are a long way from the buy point of 1,208.10. A consolidation near the 200-day line or a handle higher can create a buying opportunity.

Chinese EV Stocks

Meanwhile, Chinese EV makers are showing some strength. BYD (BYD), which reported booming July sales on Wednesday, rose 2.6% to 38.10 on Thursday, back above the 50-day line. BYD stocks are likely to find new bases in another week, but a move above the August 1 high of 38.35 could provide an early entry.

Li Auto (LI) climbed 1% to 34.32 and continued to trade between the 21-day and 50-day lines. LI stocks should have a new base on a weekly chart after Friday. Li Auto stock is on the IBD 50.

Nioz (NIO) rose 3% to 20.90, bouncing off the 50-day line. The NIO share is still below the 200-day mark.

Stock Market Rally Thursday

The stock market rally didn’t move much on the major indices headed to the July jobs report.

The Dow Jones Industrial Average fell 0.3% on Thursday stock market. The S&P 500 index fell 0.1%. The Nasdaq composite rose 0.4%. The small-cap Russell 2000 lost 0.2%.

The price of crude oil in the US fell 2.3% to $88.50 a barrel, reaching its lowest level since before the Russian invasion of Ukraine in late February. Gasoline futures fell 4.1%, indicating a continued decline in prices at the pump.

The 10-year yield fell by 7 basis points to 2.68%.

ETFs

Below the best ETFsthe Innovator IBD 50 ETF (FFTY) rose 0.35%, while the Innovator IBD Breakout Opportunities ETF (BOLT) tapped 1 cent higher. The iShares Expanded Tech Software Sector ETF (IGV) achieved a gain of 0.2%. The VanEck Vectors Semiconductor ETF (SMH) increased by 1%.

SPDR S&P Metals & Mining ETF (XME) rose 1% and the Global X US Infrastructure Development ETF (PAVE) 0.8% added. US Global Jets ETF (JETS) rose 0.5%. SPDR S&P Homebuilders ETF (XHB) won 1.7%. The Energy Select SPDR ETF (XLE) fell 3.7% and the Financial Select SPDR ETF (XLF) decreased by 0.3%. The Health Care Select Sector SPDR Fund (XLV) withdrew 0.5%.

Due to more speculative story stocks, ARK Innovation ETF (ARKK) advanced 0.8% and ARK Genomics ETF (ARKG) climbed 1.7%, both at three-month highs. Tesla stocks are a major holding in Ark Invest’s ETFs. Cathie Wood’s Ark funds also have small stakes in BYD and Nio stocks. Market rally analysis

The stock market rally had a mixed session on Thursday, trading in a narrow range. After strong recent gains, especially Wednesday’s tech-led rally, a pullback or pause would come as no surprise and be healthy.

The Nasdaq composite is comfortably holding above the early June highs, with the Dow Jones, S&P 500 and Russell 2000 just below that resistance level.

While major indices were quiet on Thursday, there was plenty of action across sectors and individual stocks.

Oil and gas stocks are once again struggling, while energy prices, especially crude oil, are falling. It’s hard to see the industry making meaningful progress without underlying prices rising.

Biotechs had another strong session, with the IBB ETF rising 2.2% after Wednesday’s 3.8% jump.

While there were several profit winners on Thursday, the profit losers showed the dangers of having little buffer in the results. Aris Water Solutions (ARIS) crashed 21% after closing gains Wednesday in a buy zone. fortinet (FTNT) fell 16%, Eli Lilly (LLY) and Quanta Power (PWR) fell modestly, but further from buying points.

Lantheus (LNTH) had a wild session, hitting a record of 81.43 just after opening, dropping to 66.26 minutes later, turning positive briefly before closing 6.1% to 71.24.

What to do now

The market rally is working, but investors have reasons to be cautious about increasing exposure quickly. A pullback could be a temporary setback for the indexes, but perhaps big losses for many individual names. There is still significant risk that the market rally will soon run out and pull back significantly, although perhaps not to recent lows.

Be careful with income.

Keep working on watchlists. Stay engaged in the market, but you don’t have to stare at the computer screen all day.

Read The big picture every day to stay in sync with market direction and leading stocks and sectors.

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