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Market moves: Apple’s headline earnings wave; 5 growth stocks near buy point


Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures, with Apple (AAPL) and Microsoft’s top earnings week. The stock market rallied strongly last week.




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Yields on the 10-year Treasury note spiked to a 14-year high for the week. But yields, especially the two-year rate, fell on Friday as reported by the Wall Street Journal, stoking hopes of a slower Fed rate hike soon.

The major indexes have moved above key short-term resistance. Volatility remains severe for indices, stocks and overnight futures.

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

Meanwhile, Apple stock, Microsoft (MSFT), Google’s parent Alphabet (GOOGLE), Amazon.com (AMZN), and Meta . Platform (META) all reports next week, along with Boeing (father), Merck (A), Vertex Pharmaceuticals (VRTX) and hundreds of other companies.

In addition to Vertex and MRK stocks, both are close to buy points, all the names mentioned above are well-off names. However, earnings reports can be the catalyst for a big bull market, a big drop, or more action.

Vertex and DV stocks are bouncing IBD Rankings as IBD 50 list. Albemarle and SWAV stock are on the Leaderboard watchlist. VRTX shares are available on IBD Big Cap 20. Shares of Microsoft and Google are on IBD Long-Term Leaders. Shift4Payments is Friday IBD shares of the day.

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 action overnight in Dow futures contract and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.


Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live


Rally stock market

The stock-market recovery effort spiked at the start of the week, rallied slightly then rebounded on Friday.

The Dow Jones Industrial Average rose 4.9% last week stock market trading. The S&P 500 index rose 4.75%. The Nasdaq Composite Index rose 5.2%. The small-cap Russell 2000 gained 3.6%.

Apple, Microsoft, Google and Amazon shares all regained their 21-day moving averages on Friday.

Meta stocks are near bear market lows, falling on Friday as Snap (SNAP) dropped in disappointing Q3 report.

Friday’s rally came from a The Wall Street Journal reported that Fed officials are thinking about slower rate hikes after making the fourth consecutive 75 basis point move at the November meeting. Markets are currently tilted slightly in the direction of a 50-point rate hike. Fed basis point in December versus 75% odds on Thursday for another three-quarter point increase.

Obviously, there’s a bunch of economic data between now and the Fed’s December 14 meeting.

The yield on the 10-year Treasury note rose 20 basis points to 4.21%, its 12th consecutive weekly gain. But the benchmark Treasury yield has fallen back from Friday’s high of 4.31%, a 14-year high.

Yields on two-year Treasuries, more closely aligned with Fed policy, hit a 15-year high of 4.64% on Friday but reversed sharply lower to 4.48%, down 1 point. basic for the week.

With Treasury yields falling off weekly highs and the Bank of Japan seemingly intervening to prop up the yen, the US dollar has been on a steady decline for the week, mostly on Friday.

US crude futures rose 0.5% to $85.05 a barrel last week. But natural gas prices fell 23%.

ETF

Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) rose 5.6% last week, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) rose 4.2%. iShares Expanded Software-Technology Sector ETF (IGV) is nearly 7% higher, with MSFT stock being a huge IGV component. VanEck Vectors Semiconductor ETF (SMH) spiked 7.6%.

SPDR S&P Metals & Mining ETF (XME) spiked 9% last week. The United States X Global Infrastructure Development Fund (SAVE) reached 4.8%. US Global Jets ETF (JETS) increased by 5.35%. SPDR S&P Homebuilders ETF (XHB) increased by 0.5%. The Energy Select SPDR ETF (XLE) rose 8.3% and the financial SPDR ETF (XLF) increased by 3.8%. SPDR Fund for the Healthcare Sector (XLV) up 2.1%

Reflecting a more speculative narrative on 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, rising to a record 429 in December 2020. But the stock fell to 110.27 in June 2022. But SNOW stock has now bottomed around the line. 50 days with a buy point of 205.76. Over the past week, the stock has rallied 16% to 177.10. A move above the 200-day line could provide an early entry. But SNOW stock could have a lot of overhead resistance.

Snowflake boasts strong revenue growth, but is currently just on the cusp of transitioning to continued profitability, with large margins expected in 2023.

DoubleVerify stock, an April 2021 IPO, has been consolidating over the past few weeks, finding support at the 50-day level. DV stock has 30.02 buy points. Stocks attempted a breakout Tuesday and fell back, but still had a solid week. High earnings and strong revenue growth for the digital advertising game.

FOUR stock is operating on its own bottom, with 51.52 buy points, according to MarketSmith Analysis. Shares of Shift4Payments could have an early entry above 48.66, which means clearing the 50-day and 200-day lines. The digital payment processor, IPO in June 2020, is expanding from restaurants into various sectors. Earnings are growing strongly and are expected to continue through 2023.

ALB stock rallied nearly 14% last week to 270.01, after falling nearly 13% last week as some analysts bet on falling lithium prices. Prices for metals used in electric vehicles have surged to record highs with supply outstripping demand for years to come. Albemarle, which has not had a recent IPO, is profiting from higher-priced contracts while ramping up production over time.

ALB stock now has a new base with 308.34 buy points. A decisive move above the 50-day line could provide early entry.

SWAV stock rose 9% last week to 276.70. It remains below the 50-day line, which has recently been seen as resistance. Shockwave stock has 315 buy points. But a strong move above 50 days will also break the trendline, providing an early entry. One note: Volume increased slightly in recent days and weeks.

But Shockwave earnings are soaring amid triple-digit revenue growth.

The relative strength line is holding near all-time highs, although SWAV stock has retreated from its late-August high.

Market aggregation analysis

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

The WSJ report on Friday suggested that Fed officials may finally be ready to ease the 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 that short-term level on Friday.

The option expiration helped drive higher trading volume on the NYSE.

A market rally may have an effect, but that doesn’t mean it can’t happen. This could be another bear market rally. The Dow Jones is just below the 50-day moving average – and above the 10-week line – with other indexes not too far away. Above the 50-day line is the 200-day average and the mid-August high.

Oil stockpiles are doing well, thanks to the recent uptrend in crude prices and expectations to keep rising over the winter. Natural gas producers are struggling as Natgas futures plunge.

Several biotech, drug and health services companies continue to show strength, including Merck, Vertex, Cardinal Health (CAH), Humana (HUM) and more.

Some growth stocks have broken out, but many are still setting up, such as ALB and Shockwave stocks.


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What to do now

Controlling your emotions while remaining flexible is an important part of investing. The market rally is showing some strength, so you cannot continue to be locked into a bearish mindset. But you don’t want to get too excited and rush in with big bets.

Investors can take a number of small positions in stocks or broad market ETFs. If those work out 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 watch list is updated on weekends. There is a curated list of stocks that are either actionable or likely to act in the coming days. But it’s also a good idea to keep a broader list of stocks that exhibit relative strength.

Remember that earnings season can affect markets as a whole 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 for cloud computing, IT spending, e-commerce, and online advertising.

Microsoft and Google stock reports Tuesday night, with Boeing and Meta due on Wednesday. Shares of Merck, Vertex, Amazon and Apple on Thursday.

Read Big picture every day to stay in sync with market trends and top stocks and sectors.

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

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