After a big week for the Nasdaq and major stocks, Dow Jones futures will open Sunday evening along with S&P 500 futures and Nasdaq futures.
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Apple (AAPL), Amazon.Com (amzn), Novo Nordisk (NVO), Eli Lilly (LLY), super micro computer (SMCI) and Advanced Micro Devices (AMD) will all report in the coming week. The latest Federal Reserve meeting and monthly jobs report are also on the slate.
The stock market got a strong boost last week on big-cap earnings even amid worrying inflation reports. The Nasdaq and major stocks were the standouts. As tech titans deliver strong growth and promise huge AI spending.
ai chip manufacturer NVIDIA (NVDA), broadcom (AVGO) and Astera Labs (ALAB) also flashed buy signals AppLovin (Application), KLA (KLAC), kava group (CAVA) and embraer (ERJ).
Buy signals were seen in many other stocks, which are going to earn earnings in the coming week. Hubbell (hub), wingstop (wing), Texas Roadhouse (txrh) and Generac (GNRC)
Investors should pay attention to the character change of the market. But along with the revived momentum, maintain some caution. All major indices are below their 50-day moving averages. With Super Micro and AMD key to AI hardware play, the heavy earnings calendar could still impact markets and sectors. Apple has lagged behind, but it’s still a huge tech giant with a vast iPhone ecosystem. Any AI signal can help or hurt many stocks.
The Fed meeting and key economic data could also derail the emerging market rally.
Nvidia, Novo Nordisk, Generac, KLA and Kava stocks are on the IBD Leaderboard, Eli Lilly is on the Stock Leaderboard watchlist. Nvidia stock is on SwingTrader. KLA stock is on IBD Long-Term Leaders. Wingstop, Hubbell and Texas Roadhouse are on IBD 50. Broadcom, Hubbell and Super Micro stocks are on the IBD Big Cap 20. Kava was IBD’s Stock of the Day on Friday.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action on Dow futures and elsewhere will not necessarily translate into actual trading in the next regular stock market session.
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stock market rally
The stock market had a bullish week, especially the Nasdaq and the major stocks. The Dow Jones Industrial Average rose 0.7% in last week’s stock market trading. The S&P 500 index jumped 2.7%. The Nasdaq Composite rose 4.2%. The small-cap Russell 2000 rose 2.8%.
The bounce at the beginning of the week was no real surprise after a long streak of losses. On Thursday morning, the rally attempt looked to be in trouble, with hot inflation data leading to selling meta platform Faltering on (meta)guidance. But the major indices pared losses as a selloff in the meta on heavy AI spending boosted Nvidia, Broadcom and AI hardware.
On Friday, the rally gained momentum due to strong income and spending plans Microsoft (MSFT) and Google parent Alphabet (Google).
The Nasdaq’s 2% gain Friday came on volume that was slightly lower than Thursday. However, a large number of major stocks showed buy signals or extended moves.
Major indices may face resistance at the 50-day line, with the S&P 500 and Nasdaq near key levels. A heavy calendar of earnings and economic news awaits investors in the coming week.
The 10-year Treasury yield rose 5.5 basis points to 4.67%, up 48 basis points in just four weeks. On Thursday, the 10-year Treasury yield reached nearly 4.74%, the highest since Nov. 1.
Markets are now looking at the first Fed rate cut in September, and it’s not a lock. Investors are broadly divided on whether there will be one or two cuts in 2024, with a good chance that no action will be taken.
Statements from the Fed meeting and Fed chief Jerome Powell, along with the April jobs report and other key data, should impact Treasury yields and the odds of a rate cut.
US crude oil futures rose 2% to $83.85 a barrel.
etf
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 3.3%. The VanEck Vectors Semiconductor ETF (SMH) rose 9.25%. Nvidia is the No. 1 holding and Broadcom stock is also a major component.
The SPDR S&P Metals & Mining ETF (XME) fell 0.1% last week. The Global X US Infrastructure Development ETF (PAVE) rose 2.3%. The SPDR S&P Homebuilders ETF (XHB) rose 3.6%. The Energy Select SPDR ETF (XLE) rose 0.8%, and the Health Care Select Sector SPDR Fund (XLV) rose 0.7%, with Eli Lilly’s stock the notable lead.
The Industrial Select Sector SPDR Fund (XLI) rose 1.8%. The Financial Select SPDR ETF (XLF) rose 1.1%.
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Nvidia, AI chip stocks flash buy signals
Nvidia stock jumped 15.2% last week to 876.90. Friday’s 6.1% gain pushed NVDA stock above the 50-day line and just above a downward sloping trendline, offering an early entry. Nvidia stock has a 974 buy point.
Nvidia was scheduled to be featured on CBS’s “60 Minutes” Sunday night with an interview with CEO Jensen Huang.
Broadcom stock rose 11.6% last week and 3.8% on Friday, hitting 1,344.05, above the 50-day line. It may offer an aggressive entry. AVGO stock has a 1,403.98 buy point from a double-bottom base.
Astera Labs stock rose 31.8% during the week to $85, matching a record close. Friday’s 18.7% surge pushed the March AI chip IPO above resistance around $75, prompting an entry offer. But shares now seem expanded. ALAB stock’s official IPO base buy point is 95.21. Astera’s earnings are scheduled for May 7.
Heavy spending by tech titans led to increased AI chip play.
Results from Super Micro and AMD on Tuesday night could impact the group, as well as comments from Amazon on AI spending. SMCI stock and AMD are still well below their 50-day ranges, although Super Micro had a strong week. Amazon stock returns to 50-day high.
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Other stocks are clearing buy points
KLA stock jumped 12.4% for the week to 706.26. On Friday, the chip equipment maker gained nearly 5% after strong earnings, surpassing the 50-day mark and breaking a trendline. It offered early entry. KLAC stock has a 729.15 buy point from a flat base.
Kava stock rose 16.7% to 69.61, reclaiming the 50-day line on Thursday and then racing higher on Friday. The Relative Strength Line reached a new high, indicating Kava’s outperformance compared to the S&P 500. On Friday morning, the Mediterranean-themed eatery cleared a trendline while offering aggressive entrees. But by the close, Kava’s stock was inflated. Investors can wait for a pullback or formation of a proper base.
AppLovin jumped 10.5% last week to 73.82, breaking above the 50-day/10-week lines for the first time since a breakout in late January. Friday’s 6.7% gain pushed APP stock above its 21-day line and broke a short trendline.
Ember stock, after spectacularly falling back to the 10-week line over the past four weeks, rebounded last week; It has increased by 9.25% to 25.98. This provided a buying opportunity into the Brazilian jet maker. According to MarketSurge analysis, it now has a new flat base with a 27.25 buy point.
Eli Lilly, Novo Nordisk
Eli Lilly reports early Tuesday while Novo Nordisk is on tap ahead of Thursday’s open. Expect strong growth due to increasing demand for weight loss drugs. Investors will be looking for guidance on production as well as progress on the next generation of obesity data.
Eli Lilly and Novo Nordisk stock are in flat bases, but Lilly has fallen below the 50-day line while Novo is right around that key level.
What do we do now
Friday was a good example of why investors need to stay engaged and have their watch lists ready.
With the Nasdaq hitting higher highs, many stocks moved past buy points. While many are still in range, it is helpful to shop as close to entry as possible. In some cases, such as Kava and Astera Labs, if you didn’t take profits on Friday morning, the stocks expanded quickly.
Friday was the day to consider making some purchases. However, heavy earnings and economic news this coming week, as well as tests of the 50-day line for the S&P 500 and Nasdaq, provide reason not to aggressively increase risk on.
If the market rallies and your holdings continue to grow, you can add exposure as more stocks trigger entries.
So make sure your watch lists are up to date. Stocks that looked damaged on Thursday morning may be taking action or setting up. And while the names Nvidia and AI are coming to the fore again, market leadership remains widespread.
Your watchlist and portfolio should reflect this.
Read The Big Picture every day to keep up with market direction and leading stocks and sectors.
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