Dow Jones Futures Due With These 10 Market-Moving Earnings Reports On Tap

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Investors will be gearing up ahead of a big earnings week Tesla (TSLA), Microsoft (MSFT) and Boeing (BA).




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The stock market retreated in the middle of the week, with major indexes falling below their major moving averages. But they bounced back on Friday, especially Nasdaq and technology stocks. The Nasdaq, which retreated in 2022, led the way in 2023 as tech growth names returned to their favor.

The recent pullback has offered many stocks a chance to take a breather, build arms or other new buying opportunities.

Investors should be cautious, but cautious about new positions. The market rate is around critical levels. Earnings season can wreak havoc on specific indexes and sectors as well as individual stocks.

Hundreds of companies will report this coming week. Here are 10 earnings reports to watch closely: Tesla, Microsoft, Boeing, ServiceNow (RIGHT NOW), Chevron (CVX), Visa (V) and Mastercard (MA), as well as chip-gear giants ASML (ASML), Research Lam (LRCX) and KLA Corp. (KLAC).

These reports will offer insight into their respective industries, and can have a huge impact on the overall market. Stock Tesla and Microsoft still have a lot of repair work to do, while Boeing is stretched. NOW stock could be close to an aggressive initial entry. Stock CVX, Visa and Mastercard are all close to buy points. So are LRCX and KLA, while ASML is a bit out of hand.

KLAC stock on IBD Big Cap 20. Microsoft and ASML stocks are on IBD Long-Term Leaders.

The stocks of Microsoft, Boeing, Chevron and Visa are all components of the Dow Jones.

The video included in this article reviews and analyzes an important market week Etsy (ETSY), LRCX stock and ServiceNow.

Dow Jones Futures Today

Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight activity in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular market session.


Join IBD experts as they analyze active stocks in the market rally on IBD Live


Stock Market Rally

The stock market rally experienced a bearish reversal 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%. The Nasdaq composite rose 0.55%. The small-cap Russell 2000 was down 1.1%.

The 10-year Treasury yield fell 3 basis points to 3.48% on Friday. Output fell 3.37% in the week, a four-month low.

The February crude oil contract, which expires in February, rose 1.8% last week to $81.31. The March contract, the new one-month crude oil contract, ended at $81.64.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 1% last week. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.45%, with stocks MSFT and ServiceNow the two top holdings. VanEck Vectors Semiconductor ETF ( SMH ) rose 0.7%. ASML is a major shareholder, along with LRCX, KLAC and TER.

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In terms of more speculative stocks, the ARK Innovation ETF (ARKK) gained 1.4% last week and the ARK Genomics ETF (ARKG) lost 1%. TSLA Corporation remains a major shareholder in all of Ark Invest’s ETFs. In fact, Cathie Wood’s stock has been reloading its Tesla stock in recent months.

The SPDR S&P Metals & Mining ETF ( XME ) fell 0.5% after two big weekly gains. The US Global X Infrastructure Development ETF (PAVE) fell almost 3%. The U.S. Global Jets ETF (JETS) was up just 0.35% but it’s very high in 2023. The SPDR S&P Homebuilders ETF ( XHB ) fell 2.4%.

The Energy Select SPDR ETF (XLE) climbed 0.7%, its sixth straight weekly advance. Chevron Corporation is a major component. The financial pick SPDR ETF ( XLF ) fell 2.1 percent. The SPDR Health Care Select Sector Fund ( XLV ) fell 1.1%, its sixth decline in seven weeks.


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Key earnings

Tesla’s arrival is Wednesday night. Investors expect revenue to increase by 34% and earnings by 39%. It will be the first quarter in years that revenue growth will outpace profits, an early sign of margin pressure.

The focus will be on the outlook, especially after major price cuts around the world starting in 2023. Will Tesla stay on target for 50% delivery growth? Will Elon Musk provide more Cybertruck details, and will he confirm a reported Model 3 update? What about a new EV plant? Tesla stock rose 9% last week to 133.42, above its 21-day moving average after falling to an intraday low of 101.81 on January 6.

Microsoft’s earnings are on Tuesday evening. Analysts expect Microsoft’s revenue to decline slightly, with a modest revenue gain. Microsoft’s findings will have implications for software makers, the PC sector and cloud-computing competitors such as Amazon.com (AMZN). This past week, the Dow Jones technology titan said it would cut 10,000 jobs, or 4.5% of its workforce. MSFT stock rose 0.4% last week, hitting resistance at the 50-day line. Microsoft definitely has a downside base below the 200-day line. But a breakout would involve clearing the 200-day line and a long downward trend.

Boeing earnings are due Wednesday morning, with a lower profit expected after a string of losses. Investors are betting on the return of profits and cash in the coming years. Last week, Boeing stock fell 3.4 percent to 206.76. After a big move, BA stock needs to be reset.

ServiceNow earnings are scheduled for Wednesday night. Analysts expect 38% EPS, the second straight quarter of rapid growth. Executives are concerned about IT spending by 2023. The report will be important for high-value business software names. NOW stock fell 6.5% to 441.83 after rising 13% in the previous week. Shares cleared the 200-day line on Friday, hitting a four-month high and clearing a long downtrend. It offered a very early entry, but future earnings make it very risky.

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Chevron’s earnings are out Friday morning. Analysts expect another quarter of positive EPS growth compared to a year ago, but lower than Q2-Q3. CVX stock rose 1.8% last week to 180.81, retracing its 50-day line. Chevron is in a flat base, but a move above Wednesday’s high of 182.38 would offer an early entry. Chevron’s earnings will be important for the oil and gas sector, especially oil majors such as Exxon Mobil (XOM).

Mastercard earnings are early Thursday, with Visa earnings after the close. Mastercard’s EPS is about 10% higher than Visa’s 11%. The credit card giants’ findings and comments will be important for other payment companies and for understanding consumer spending trends. Both Visa and Mastercard stocks are working on long-term consolidation, hovering around key resistance levels dating back to early 2022.

ASML’s earnings are early Wednesday, with Lam Research and Teradyne following the close. UÇK reports late Thursday. ASML’s revenue is expected to decline 11%, while Lam Research’s revenue should increase 15% and KLA’s 27%. Guidance will be important in what could be a challenging 2023. Together with these earnings reports, along with chipmakers like Intel (INTC), will provide insight into the semiconductor field and end markets.

The ASML stock is extended from the 200-day line. LRCX stock is trading on a bearish basis above its 50-day and 200-day lines. KLAC Corporation has a small hand on a weekly schedule for a merger that goes back a year.

Market Rally Analysis

The stock market was due for a retreat, and it was one. Major indexes fell sharply on Wednesday and fell on Thursday. But they closed Thursday’s lows and rebounded strongly on Friday.

The Nasdaq posted a weekly gain, decisively retaking its 50-day moving average on Friday. Friday’s action was another dovish day for the Nasdaq.

The S&P 500 retook its 50-day line and sneaked back to its 200-day line. The Russell 2000 has found support at the 200-day and could soon try to test its late 2022 highs.

The Dow Jones was the week’s biggest loser, falling below its 50-day low and ending the week well below that level.

Outside of the Dow, the recent pullback looks normal and healthy so far.

Stops give the leading stocks a chance to make hands while the few falter. If anything, a slightly longer withdrawal could be useful in this regard.

But the major indices have several key resistance levels. The S&P 500 should decisively retake the 200-day range, with this past week’s high and the December peak serving as key milestones.

The earnings season can be the catalyst for market gains or losses – or both.

Next week will offer the first reading on fourth quarter GDP, along with December’s PCE inflation measure. They will pave the way for the Federal Reserve’s February 1 policy meeting.


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The Tech Revival continues

After a long hiatus, the stock market seems to be turning towards the technology development. The Nasdaq Composite reached a bear market close on December 28. But in 2023, the Nasdaq is expected to increase by 6.4 percent. The SMH chip ETF is up 12%, the IGV software ETF is up 5.5% and the speculative ARKK is up 16.8%.

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What is driving the tech boom?

Treasury yields fall, positive for highly valued growth stocks. Meanwhile, as China and Europe improve and as Fed rate hikes appear to be nearing a peak, there are expectations of a moderate economic slowdown. This bet adds that most bad news is priced in for growth stocks

The Russell 2000, another risky play, is almost on par with the Nasdaq, up 6.1% in 2023.

The S&P 500 is up 2.5% to start the new year. The Dow Jones is up 0.7 percent and is only positive thanks to Friday’s solid gain.

Many big names in technology are not yet in position. The LRCX company is among the leaders of the large-cap chips being established. The software is scarce, although the stock NOW makes a case. E-commerce carries, with MercadoLibre (MELI) broke and Etsy (ETSY) installation. Chinese e-commerce and internet companies are also doing well.

Big earnings reports are tech-heavy over the next two weeks, so investors will see if the growth revival has legs.

Meanwhile, many financials struggled last week, as defense contractors and defense-minded food and consumer stocks tumbled.

But metal and mining stocks look strong. Airlines fly, while investors go to hotels. Retail is a mixed bag. So are doctors: Biotechs look interesting but health insurances are weak.


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What to do now

The market rally showed some resistance late last week, with many quality stocks. It is still possible for the current discharge to restart, causing permanent damage. Earnings season can trigger big moves in specific stocks, but also their competitors, suppliers and customers.

So while the market, especially the Nasdaq, may indicate “risk on,” investors should be cautious about increasing exposure. A possible option is through market or sector ETFs, to avoid single-stock risk. If you add exposure, be prepared to run out quickly. If you are not ready and willing to exit early, you should be more conservative in entering positions.

But the next few weeks could offer plenty of buying opportunities. So get your watch lists ready and stay tuned.

Read The Big Picture every day to stay in sync with market direction and leading companies and sectors.

Please follow Ed Carson on Twitter @IBD_ECarson for stock updates and more.

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