Dow Jones Futures: Market Rally Roars, 5 Growth Stocks Near Buy Points; Apple, Big Earnings Due

Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures, with Apple (AAPL) and Microsoft lead top earnings week. The stock market rally had strong gains last week. signals a change in character.




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The 10-year government bond spiked to new 14-year highs during the week. But rates, particularly the two-year rate, fell Friday on a Wall Street Journal report that raised hopes of slower Fed rate hikes soon.

The major indexes, which rose sharply during a volatile week, rose sharply on Friday. The S&P 500 and Nasdaq cleared key near-term resistance and joined the Dow Jones.

However, with some positive market signals, investors should look for potential winners in the next bull market. Snowflake (SNOW), Shift4Payments (FOUR) and DoubleVerify (DV) are fast-growing technology companies that have gone public in the past two years. Lithium giant Albemarle (ALB) and Shockwave ( SWAV ) is also booming, with their shares trying to get back to a key level within the bases.

Meanwhile, Apple stocks, Microsoft (MSFT), Google parent Alphabet (GOOGL), Amazon.com (AMZN), and Meta platforms (META) all report next week, along with Boeing (BA), Merck (MRK), Vertex Pharmaceuticals (VRTX) and hundreds of other companies.

Apart from Vertex and MRK stocks, both near buy points, all the names listed above are prosperous tops. Still, earnings reports can be a catalyst for big market gains, heavy losses, or more whipsaws.

Vertex and DV stocks are on the IBD Leaderboard as well as the IBD 50 list. Albemarle and SWAV stocks are on the top list. VRTX stock is on the IBD Big Cap 20. Microsoft and Google stocks are on the IBD Long-Term Leaders. Shift4Payments was Friday’s IBD Stock Of The Day.

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 action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.


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


Stock market rally

The stock rally attempt gained momentum to start the week, pared gains then rebounded again on Friday.

The Dow Jones Industrial Average rose 4.9% in last week’s trading. The S&P 500 index rose 4.75 percent. The Nasdaq composite rose 5.2%. The small-cap Russell 2000 rose 3.6%.

Shares of Apple, Microsoft, Google and Amazon all retook their 21-day moving averages on Friday.

Meta stock is near bear market lows, falling Friday as Snap ( SNAP ) rallied on its disappointing third-quarter report.

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Friday’s market bounce came on a Wall Street Journal report that Fed officials are mulling slower rate hikes after a likely fourth straight 75 basis point move at the November meeting. During Friday and the past week, some Fed politicians have also started to lay the groundwork for smaller interest rate increases.

Markets are now leaning slightly toward a 50 basis point Fed rate hike in December compared to Thursday’s 75% odds for another three-quarter point hike.

Clearly, there is a wealth of economic data between now and the December 14 Fed meeting.

The 10-year Treasury yield rose 20 basis points to 4.21%, the 12th straight weekly gain. But the benchmark Treasury fell back from Friday’s intraday high of 4.33%, a 14-year high, to end the session down 2 basis points.

The two-year Treasury yield, more closely tied to Fed policy, hit a 15-year high of 4.64% on Friday but turned sharply lower to end the day at 4.48%, down 1 basis point for the week.

With Treasury yields retreating from weekly highs and the Bank of Japan apparently stepping in to support the yen, the US dollar fell sharply for the week, mostly on Friday.

U.S. crude oil futures rose 0.5% to $85.05 a barrel last week. But natural gas prices fell by 23%.

ETFs

Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 5.6% last week, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) rose 4.2%. The iShares Expanded Tech-Software Sector ETF ( IGV ) was up nearly 7%, with MSFT stock as a huge IGV component. The VanEck Vectors Semiconductor ETF (SMH) shot up 7.6%.

The SPDR S&P Metals & Mining ETF (XME) rose 9% last week. The Global X US Infrastructure Development ETF (PAVE) rose 4.8%. US Global Jets ETF (JETS) rose 5.35%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.5%. The Energy Select SPDR ETF (XLE) jumped 8.3% and the Financial Select SPDR ETF (XLF) climbed 3.8%. Health Care Select Sector SPDR Fund (XLV) rose 2.1%

Reflecting more speculative history stocks, the ARK Innovation ETF ( ARKK ) rose 5.6% last week and the ARK Genomics ETF ( ARKG ) 2%.


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Stocks to watch

Snowflake went public in September 2020 and rose to a record high of 429 in December 2020. However, shares fell all the way to 110.27 in June 2022. However, SNOW stock has now made a bottom base around its 50-day line with a buy point of 205.76. The stock rose 16% to 177.10 in the past week. A move above the 200-day line could offer an early entry. But SNOW stock may have a lot of overhead resistance.

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Snowflake boasts strong revenue growth, but is only now on track to become consistently profitable, with big profits expected in 2023.

DoubleVerify stock, an April 2021 IPO, has been consolidating in recent weeks and finding support at the 50-day line. The DV share has a buy point of 30.02. Stocks tried to break out on Tuesday and pulled back, but still had a solid week. Revenue is strong and revenue growth robust for the digital advertising game.

FOUR stock is working on its own bottom base, with a buy point of 51.52, according to MarketSmith analysis. Shift4Payments stock could make an early entry above 48.66, which would see the 50-day and 200-day lines cleared. The digital payment processor, a June 2020 IPO, is expanding from restaurants to a variety of other areas. Profit growth is strong and is expected to remain so until 2023.

ALB shares rebounded nearly 14% last week to 270.01, after falling nearly 13% the previous week as some analysts bet on lower lithium prices. Prices for the metal used in electric cars have risen to record highs, and supply is seen outstripping demand for years to come. Albemarle, not a recent IPO, is reaping the benefits of higher-priced contracts while ramping up production over time.

ALB stock now has a new base with a buy point of 308.34. A decisive move above the 50-day mark could offer an early entry.

SWAV stock rose 9% last week to 276.70. It is still below the 50-day mark, which has served as resistance recently. Shockwave stock has 315 buy points. But a strong move above the 50-day would also break a trendline, prompting an early entry. One caveat: Volume has been low for the past few days and weeks.

But Shockwave revenue soars with triple-digit revenue growth.

Relative strength remains near record highs, despite SWAV stock’s retreat from late August highs.


S&P 500 Giant Leads 5 Stocks Showing Strength


Market Rally Analysis

The stock market rally continues to be volatile but showed positive action. The major indexes were higher from Monday’s open and remained comfortably positive throughout the week even as Treasury yields continued to rise.

Friday’s WSJ report suggests Fed officials may finally be getting ready to downgrade aggressive tightening.

The Dow Jones closed the week comfortably above its 21-day moving average, with the S&P 500, Russell 2000 and even the Nasdaq composite above short-term levels on Friday.

NYSE volume increased throughout the session compared to Thursday, with option expirations pushing Nasdaq volume higher at the close.

The market rally may have legs, but that doesn’t mean it’s off to the races. This could be another bear market rally. The Dow Jones is just below its 50-day moving average – and above its 10-week line – with the other indexes not too far behind. Looming above the 50-day line is the 200-day moving average and mid-August highs.

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Oil stocks are doing well, thanks to a recent uptrend in crude oil prices and expectations of further gains over the winter. Natural gas producers struggle as natural gas futures fall.

Some biotech, pharmaceutical and health services continue to show strength, including Merck, Vertex, Cardinal health (CAH), Humane (HUM) and more.

Few growth stocks have broken out, but many are still settling in, such as ALB shares and Shockwave.


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What to do now

Keeping your emotions in check while being flexible is an important part of investing. The uptrend is showing some strength, so you can’t stay locked into a bearish mindset. But you don’t want to get too excited and rush back in with big bets.

Investors can take some small positions in stocks or broad market ETFs. If they work, and the market rally continues to build momentum, you can slowly add to your positions. But if the market falls again, take a quick step back.

So make sure your watchlists are up to date over the weekend. Have a curated list of stocks that can be fixed or potentially fixed in the coming days. But also keep a broader list of stocks that show relative strength.

Remember that earnings season can benefit the overall market and sectors, not just individual stocks. Apple’s earnings could affect a wide range of iPhone chip makers and suppliers. Microsoft, Google, Meta Platforms and Amazon can raise hopes or doubts about cloud computing, IT spending, e-commerce and online advertising.

Microsoft and Google stock reports Tuesday night, with Boeing and Meta on Wednesday. Merck, Vertex, Amazon and Apple shares are on Thursday.

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

Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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