Dow futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. apple (AAPL) Top earnings, as Friday’s jobs report approaches.
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The stock market rally faces further selling as fears of bank contagion mount. Backwest Bancorp (PACW) And Western Alliance Bancorp (WAL) are among the biggest losers again, although deposit updates were released overnight. Other regional banks slipped back in even with giants like American bank (Buck), Wells Fargo (WFC) And c. B. Morgan Chase (JPM).
The Dow Jones turned slightly negative for 2023 as it tested the 50-day line. The S&P 500 is close to testing the 50-day line with the Nasdaq not far away. The Russell 2000 Index, which is heavily weighted by banking stocks, is approaching its lowest levels in 2023.
Amid bank woes and recession fears, gold stocks shone. So did Bitcoin and many other Bitcoin-related stocks
AMD stock was featured on the report Microsoft (MSFT) helps advanced micro devices (AMD) transition to artificial intelligence segments, which creates competition for nvidia (NVDA).
Shopify (Shop) And lantheus (LNTH) were big winners on Thursday, but there were plenty of losers, too.
Apple profits
Apple’s earnings topped views modestly, supported by iPhone and services revenue. The tech giant announced a $90 billion buyback of AAPL shares and a small dividend increase.
Apple prices rose 2.5% in expanded trade. Shares fell 1% Thursday to 165.79, finding support near the 21-day high after hitting an eight-month high during Wednesday.
fortinet (FTNT), floor and decoration (FND), Reservation holdings (BKNG), DoorDash (dash), isolation (Podcast) as reported Thursday night, along with Cathy Wood Nusair Kings (DKNG) And Coinbase (currency).
DKNG, DoorDash, and Coinbase stocks were big winners. DASH stock is set to exit a cup coaster with a handle as DraftKings looks to regain the buy cup coaster point. PODD stock is up slightly, with Insulet looking to move into buy territory. Fortinet views topped as FTNT soared. BKNG stock is down modestly, indicating a 50-day test. FND stock, which has been flirting with a buy point for weeks, could fall below the 21-day and 50-day lines.
Dow jones futures today
Dow futures rose 0.2% against fair value. S&P 500 futures rose 0.4%. Nasdaq 100 futures rose 0.5%. AAPL stock is a component of the Dow Jones, Standard & Poor’s 500, and Nasdaq.
The Labor Department will release the April jobs report at 8:30 a.m. ET. Economists expect non-farm payrolls to increase by 178,000, down from 236,000 in April. The unemployment rate should rise to 3.6%. Hourly wages should rise 0.3% vs. March and 4.2% vs. a year ago, both flat vs. March.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Bank stocks
PACW fell 51% on Thursday 3.17, setting a new record high. This followed a Bloomberg report Wednesday night that PacWest could put itself up for sale. The California-based bank confirmed “ongoing” talks with “many potential partners and investors.”
The Western Alliance said deposits have been on the rise recently, and later flatly denied a report that a potential sale was being explored. WAL stock pulled back from intraday lows, but still fell 38% to 18.20, its lowest close in nine years.
Toronto Dominion Bank (TD) canceled its planned $13.4 billion merger deal with Tennessee first horizon (MFA), citing regulatory concerns. FHN stock drilled 33%.
Zion Bancorp (Zion) hit a long term low. So did the superzones Comerica (CMA), KeyCorp (key), PNC Finance (PNC) And the truth (TFC).
BBK is down 3.1% and WFC is down 4.3%, which is relatively paltry against regional banks, but close to recent lows in the long term. JPM stock rose 1.4%, crossing its 50-day line after reversing sharply from Monday’s short breakout attempt.
The hope is that regional banks can weather the storm and avoid the deposit flight that has doomed SVB Financial, Signature Bank and First Republic Bank. It is clear that the regulators will protect all deposits. But bank stocks are not protected. Also, the collapse of stocks due to the concerns of the management of banks can come by itself. The long-term profitability of banks, particularly LargeNex, may take a hit as they pay more for deposits.
SEC Chairman Gary Gensler said Thursday that it appears to be warning short sellers of misinformation or misconduct related to regional bank stocks, saying “the SEC is specifically focused on identifying and prosecuting any form of misconduct that could threaten investors or capital formation.” money or markets more broadly.”
PacWest stock and WAL rebounded strongly after hours and the KRE ETF rose modestly, but they have recovered a small portion of recent losses.
Microsoft-AMD AI Alliance
Bloomberg reported Thursday afternoon that Microsoft is helping AMD move into AI chips. Tech giant Dow Jones is offering some financial backing, and is working with AMD on an in-house Microsoft processor, codenamed Athena, for AI tasks.
AMD stock jumped 6.1% after dropping 9.2% on Wednesday amid weak guidance. Stocks briefly regained the 50-day line. A decisive retracement of the 50-day line could provide a strong entry for AMD stock. Nvidia, a leader in artificial intelligence chips, fell 0.9%%. It’s holding the 21-day streak, but NVDA stock is down a bit for the week after jumping 4.2% Monday to a 16-month high.
MSFT stock rose 0.3%, holding near a 52-week high.
Nvidia stock is running IBD Leaderboard. Microsoft and FTNT stocks are among IBD’s long-term leaders. Microsoft and BKNG are on file IBD Big Cap 20.
Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live
Stock market rise
The stock market rally witnessed losses for the fourth consecutive day, despite the major indexes closing off their lows.
The Dow Jones Industrial Average fell 0.9% in stock market trading Thursday. The S&P 500 fell 0.7%. The Nasdaq Composite fell 0.5%. Small cap Russell 2000 fell 1.2%
US crude oil prices fell 4 cents to $68.56 a barrel, down 10.7% so far this week.
Gold futures rose 1% to $2,048 an ounce, a 52-week high and the second-best close ever. Gold rose 3.3% in three days. Silver rose 2.2%, to a 52-week high.
The 10-year Treasury yield fell 5 basis points, to 3.35%. The two-year yield decreased by 21 basis points, to 3.73%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) decreased by 1.2%. iShares Expanded Technology and Software ETF (IGV) fell 0.4%, with a major stake in Microsoft shares. VanEck Vectors Semiconductor Corporation (SMH) decreased by 0.3%%. AMD and Nvidia stocks are major components.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(gained 2.8% and ARK Genomics ETF)ARKG) 1.8%. Shopify, DraftKings, and COIN are Ark Invest’s top 10 stocks.
SPDR S&P Metals & Mining ETFs (XME(down 2% and the Global Infrastructure Development Fund (ETF) in the US)cradle) 1.2%. US Global Gates Foundation ETF (Planes) fell 2.9%. SPDR S&P Homebuilders ETF (XHB) declined 1.6%. Energy Defined Fund SPDR ETF (xle(down 1.1% and the SPDR Healthcare Sector Fund)XLV) gave up 0.8%
SPDR Financial Selection Fund (45) sank 1.3%, dominated by financial giants such as JPM, Bank of America, and Wells Fargo. SPDR S&P Regional Banking ETF (Creates), including PACW, Western Alliance and First Horizon shares fell 5.45%. ZION stock is in both ETFs.
Top five Chinese stocks to watch now
Market rally analysis
During the day on Monday, the stock market rally looked ready to move above the highs of 2023. But the major indexes have reversed lower and have now fallen for four straight sessions.
The Nasdaq Composite, with a bit of banking exposure, hasn’t lost much ground but is moving towards the 50-day moving average. The S&P 500 almost tested it for 50 days. The Dow broke below 50 on the day, briefly turning negative for the year, before closing above that key level.
Major indices are still far from their 2023 highs. But they don’t look great, and they look better than other market metrics.
Apple shares could give major indexes a boost on Friday, but the tech giants have been hiding the weakness of market breadth for weeks.
Invesco S&P 500 Equal Weight Fund (RSP), which had already fallen below all of its moving averages earlier in the week, reached its worst level since late March, losing 0.95%.
First Trust Nasdaq 100 Equal Weighted Mutual Fund (QQEW), without banking exposure, down 0.15%, but below the 50-day line and near recent lows.
Market leadership remains tight, with few stocks in overbought territory.
Earnings season has been treacherous. While Shopify, Lantheus, Shake Shack (rock) And Green Brick Partners (grbk) Rockets on Thursday, several leaders fell near the buy points, and fell or reversed lower.
Housing builders are still going strong. Building materials and fixtures looked strong, although a few fell sharply in earnings on Thursday.
Many restaurant and shoe stocks work well, but not all. Several group winners have withdrawn recently.
Some travel stocks, including Booking Holdings, have shown promise. But it is definitely hit or miss.
Gold stocks are shining amid the uncertainty, but this is not a great sign of a market rally. Agnico-Eagle Mines (AEM), while many plays gold, silver or ETFs flashing buy signals.
On Wednesday, Federal Reserve Chairman Jerome Powell said the banking system is fine, backing away from market expectations for a rate cut later this year. But with bank stocks lower on Thursday, markets are now leaning towards Fed rate cuts starting in July, up from September, with a total of 100 basis points in cuts by the end of the year. The Fed or the markets – or both – will need to change course.
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What are you doing now
Earnings season has reached its peak and there is a sense that the Federal Reserve is done raising rates. But banking concerns and recession risks are major headwinds.
Some stocks work, but many will just keep running and then falter. So investors should still consider taking at least partial profits along the way.
The general exposure should be light. The rise of the market is “under pressure.”
When major indices and leading stocks show real momentum, investors can start adding more to their positions. But do it gradually. Prepare your watchlists so you can act quickly. On the flip side, have your exit plans ready based on individual stocks and overall market actions.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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