Dow Jones Futures: Jobs Report Key For Market Rally As Apple, Google Plunge

The Dow Jones futures edged lower overnight with the S&P 500 futures and Nasdaq futures, as well as the October Jobs report getting bigger.




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The stock market rally, now under pressure, continued to digest Fed chief Jerome Powell’s scathing comments that the peak or “terminal” fed funds rate could be higher than previously expected.

Major indices declined on Thursday morning. They bounced off early lows, the Dow Jones briefly turned positive, but the stock faded closer.

Megacap technology continues to weigh on the major indices, particularly the Nasdaq. Microsoft stock joined Amazon.Com (AMZN), Facebook Parent meta platform (meta) and google parent Alphabet (GOOGL) in establishing a bear market bottom. Apple (AAPL) is still above its June lows, but has fallen back to October’s lows this week.

Major Earnings Movers Involved Thursday Night amgen (AMGN), bark (yelp), EOG Resources (EOG), paypal (PYPL), Square Parent block (sq), Progyny (PGNY), cloudflare (net) and Paylocity (PCTY).

Amgen stock changed little while Yelp and PYPL stocks declined. NET stock also took a dive, with cloud software names taking a beating overnight. SQ stock rose and PGNY jumped. PCTY was not trading yet.

cardinal health (CAH) reports early Friday, CAH stock has risen slightly from a buy zone.

Jobs Report

Economists expect non-farm wages to rise by up to 210,000 in October’s jobs report, with an unemployment rate of up to 3.6%. This will be the third straight month of gradual hiring and the smallest jobs since December 2020, but not enough for the likes of the Fed.

There are many reasons to believe that October’s employment figures will be much weaker than expected.

However, other labor data this week has been hotter than expected, including job openings in September and weekly jobless claims.

Friday’s October jobs report will be crucial to Fed rate hike expectations and perhaps the direction of the stock market, at least in the short term. The November jobs report and two CPI inflation reports will also come ahead of the December Fed meeting.

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Markets now see a 50.4% chance of a fifth-straight 75-basis-point increase on December 14. It’s up 42% on Wednesday

dow jones futures today

Dow Jones futures fell 0.2% versus fair value. The S&P 500 futures were down 0.2% and the Nasdaq 100 futures were down 0.1%.

The Labor Department’s October jobs report is due out Friday at 8:30 a.m. ET. Expect big moves, possibly whipsaw action, for Dow futures and Treasury yields.

Remember that overnight action in Dow futures and elsewhere does not necessarily entail actual trading in the next regular stock market session.


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stock market rally

The stock market rally further declined on Thursday, with the Nasdaq once again taking the biggest hit.

The Dow Jones Industrial Average fell 0.5% in Thursday’s stock market trading. The S&P 500 index retreated 1.1%. The Nasdaq Composite lost 1.7%. The small-cap Russell 2000 offered a 0.6% discount.

The 10-year Treasury yield rose 6 basis points to 4.12%, but fell short of an intraday high of 4.2%. The dollar gained after a strong reversal on Wednesday.

US crude oil prices fell 2% to $88.17 a barrel amid concerns over a stronger dollar and global demand.

Apple Stock, Megacaps

Apple’s stock sold 4.2 percent. Now down 10.2% for the week, the Dow Jones, S&P 500 and Nasdaq Titan have fallen back from their 200-day lines and have bottomed out from their 50-day lines.

Google stock plunged 4.1 percent to a two-year low. GOOGL stock is down 10.4% for the week.

Microsoft stock fell 2.7% to 214.25, finally breaking through from its October low since January 2021 at its worst. MSFT stock is down 9.2% this week.

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Amazon stock has fallen 3.1% to its lowest level since March 2020. AMZN stock is down 13.6% this week.

Meta stock retreated 1.8%, hitting a seven-year low. The Facebook parent has lost 10.4% this week after crashing nearly 24% last week.


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ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) gained 0.4%. The iShares Extended Tech-Software Sector ETF (IGV) declined 2.5%, with MSFT stock being a major component. The VanEck Vector Semiconductor ETF (SMH) was down 1.2%.

The SPDR S&P Metals & Mining ETF (XME) dropped 0.3%. The US Global Jets ETF (JETS) dropped 0.1%. The Energy Select SPDR ETF (XLE) was down 1.85% and the Financial Select SPDR ETF (XLF) lost 1.1%. Health Care Select Sector SPDR Fund (XLV) dropped 0.4%.

Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) lost 0.7% and the ARK Genomics ETF (ARKG) lost 0.9%.


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market rally analysis

The stock market’s rally went “upward under pressure” after Wednesday’s big negative reversal on sharp remarks from Fed chief Powell.

The Nasdaq closed below its October 21 follow-through low of the day. This is a very bearish signal for the market rally, although the Nasdaq is clearly lagging behind in the current uptrend. Other major indices are well above FTD lows, although the S&P 500 fell below its 50-day line and the Dow Jones lowered its 200-day line.

Selling continued on Thursday, with the Nasdaq once again leading the decline and ending near session lows.

This is in large part due to megacaps from Apple, Amazon, Microsoft, Google and Meta Platforms.

The S&P 500, Dow Jones and Russell 2000 outperformed, but closed in the close.

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The Russell 2000 did manage to finish above its 50-day and 21-day lines.

The Investing S&P 500 Equal Weight ETF (RSP) fell 0.5%, much better than the megacap-heavy S&P 500, but closed below its 50-day low.

Don’t exaggerate the flexibility of a market rally outside of Apple and the megacaps. The Russell 2000 and RSP ETFs hit hard with most major stocks on Wednesday. And they lost more ground on Thursday.

With the Fed once again reinforcing its fresh stance and the Treasury yield rebounding, the stock market will struggle to catch up, let alone make a meaningful progress.

Friday’s jobs report could accelerate a market rally, or send major indices towards bear market lows.


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What should we do now

With the market under pressure and volatility in major stocks, investors should keep their risk low. If the rally does rebound, as the S&P 500 reclaims its 50-day line, it could be a sign to consider gradually increasing risk again.

There are many stocks that are relatively close to being actionable. So work on those watchlists. Stay engaged and flexible so that you are ready to add exposure or go over the edge.

Read The Big Picture every day to keep up with the market direction and key stocks and sectors.

Please follow Ed Carson on Twitter @ibd_ecarson For stock market updates and much more.

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