Dow Jones futures rose modestly overnight, along with S&P 500 and Nasdaq futures. The stock market rally was liquidated through the close on Thursday, while crude oil prices tumbled as President Joe Biden announced a major release of US strategic reserves.
gamestop (GME) said late Thursday that it would seek shareholder approval to split GME shares, following a similar plan of Tesla (TSLA) At the beginning of the week. GME stock jumped overnight, while other meme stocks AMC Entertainment (AMC) and Bed bath and beyond (bbby) also appeared.
The March jobs report looms large on Friday morning. It’s also a great day for car sales. general motors (GM) and other major automakers US auto sales launch data Friday morning. China Electric Vehicle Manufacturers child (CHILD), Xpeng (XPEV) and li car (AT) probably electric vehicle deliveries report for march before opening. Tesla could announce first-quarter global deliveries as soon as Friday.
advanced micro devices (amd) fell on an analyst’s downgrade, even as its rival nvidia (NVDA) is maintaining its recent big bounce. AMD and Nvidia stock charts show the risks and rewards of buying previous leaders to break steep downtrends.
GM is to release first-quarter US auto sales on Friday, while Toyota (TM), Stellantis (STLA) and others will publish US results for March and the first quarter. ford engine (F) may post its results early next week. Industry sales are likely to be down from February and down sharply from March 2021 as chip issues and other supply chain constraints limit output, despite strong demand. Shares of GM, Ford, Toyota and Stellantis are slightly below their 50-day declining moving averages.
Nio, Xpeng and Li Auto should report a pick-up in deliveries, after the Chinese New Year hit February sales. Shares of Nio and Li Auto fell below their 50-day moving averages on Thursday, shedding about 5%. XPEV shares fell 3%, with delisting fears still weighing on US-listed Chinese companies. China’s three EV makers are well below any possible buy points.
Tesla deliveries are likely to arrive on Saturday, though they could arrive as early as Friday or as late as Tuesday. That report could be a huge catalyst for Tesla shares, which are currently trading at 1,208.10. base of cup point of purchase, according to MarketSmith Analysis. Investors are expecting good results for the electric vehicle giant, although Tesla’s Shanghai plant is temporarily closed again over China Covid concerns. Tesla shares fell 1.5% to 1,077.60.
TSLA stock might be running on a handle, but needs a significant pullback to shake off weak holders after a big run from the bottom of its base.
GME Stock Split Plan
GME shares soared 17% overnight as GameStop said it would ask shareholders to approve a stock split of some kind. On Monday, shares of TSLA jumped 8% as the electric vehicle giant said it would seek approval of a split at its annual shareholder meeting. Shares of AMC and BBBY were modestly higher in extended trading.
Stock splits had fallen out of favor since the dot-com era, but have recently revived with share prices topping 1,000. For Tesla, parent of Google Alphabet (GOOGLE) and amazon.com (AMZN), which are also planning major spin-offs, a cheaper share price makes option contracts available to many more investors. But GME shares, which closed at 166.58 on Thursday, are not in that category. For shares of AMC and BBBY, which closed above 20 on Thursday, splits aren’t really on the table.
Dow Jones Futures Today
Dow Jones futures were up 0.4% against fair value. S&P 500 futures rose 0.4%. Nasdaq 100 futures advanced 0.45%.
The 10-year Treasury yield rose 4 basis points to 2.36%. The 2-year yield rose to 2.36%, once again threatening to outperform the 10-year rate, inverting the yield curve.
The Labor Department will release the March jobs report at 8:30 am ET. Economists expect nonfarm payrolls to show an increase of 455,000, with the unemployment rate falling to 3.7%. Wage gains and labor force participation will be closely watched.
The jobs report is likely to rock Dow Jones futures and bond yields.
The stock market rally pulled back for a second straight session, adding to losses late in the day as major indices closed their first losing quarter in two years.
The Dow Jones Industrial Average fell 1.6% in trading on Thursday stock trading. The S&P 500 index also fell 1.6%, with AMD stock is its biggest loser. The Nasdaq Composite gave up 1.5%. The small-cap Russell 2000 fell 1%.
US crude prices fell 7% to $100.28 a barrel, the lowest close in two weeks. President Joe Biden announced a major release of strategic oil reserves, supplying 1 million barrels a day for the next six months. That will provide an incremental boost to global oil supplies amid Russia’s invasion of Ukraine. Energy stocks did relatively well.
The 10-year Treasury yield fell 3 basis points to 2.33%.
Between best ETFsthe Innovator IBD 50 ETF (FFTY) sank 0.9%, while the Innovator IBD Breakout Opportunities ETF (COMBAT) fell 0.7%. The iShares Extended Technology Software Sector ETF (VAT) fell 0.75%. The VanEck Vector Semiconductor ETF (SMH) fell 2%, with shares in AMD and major components in Nvidia.
SPDR S&P Metals & Mining ETF (XME) fell 0.6% and the Global X US Infrastructure Development ETF (TO PAVE) declined 1.15%. USGlobal Jets ETF (JETS) rose 0.3%. SPDR S&P Home Builders ETF (XHB) plummeted 3.9%. The Energy Select SPDR ETF (XLE) fell 1.35%. The Financial Select SPDR ETF (XLF) stumbled 2.3%. The SPDR Fund of the Select Sector of Health Care (XLV) lost 1%
Mirroring more speculative historical stocks, ARK Innovation ETF (ARKK) slipped 3.5% and ARK Genomics ETF (ARKG) 1.8%. Tesla shares remain the number one position among Ark Invest ETFs. Ark also owns some Nio and XPEV stock.
AMD shares fell 8.3% to 109.36, falling below their 50- and 200-day moving averages on heavy volume. Barclays downgraded AMD shares on Thursday, fearing slower growth in its PC and gaming markets next year. On Monday, Goldman Sachs downgraded the chipmaker.
On March 24, AMD shares broke above their 50 and 200-day lines and broke out of a downtrend, offering an aggressive entry. But while such operations can certainly work, they carry high risks.
Meanwhile, Nvidia shares rallied back to their 200-day mark on March 17, a week earlier than AMD. The stock rose on March 18 and then again on March 24, as NVDA shares broke some short-term resistance. Those moves offered a couple of early innings.
On Thursday, the shares fell 1.5% to 272.86. While Nvidia competes with AMD in gaming and data centers, it doesn’t compete in PC chips.
Nvidia’s stock might be working on a handle, but that would be, at best, the midpoint of a deep, undefined foundation. A mango would look more attractive if Nvidia went up to 300 or a little more.
Market recovery analysis
The stock market rally retreated for the second consecutive session. The Nasdaq has stopped just short of its 200 day line. The Dow Jones fell below that level again and the S&P 500 moved back towards it.
Although it’s not fun to see the indices pull back, so far it’s still a normal and healthy action.
Ideally, the market would move sideways or slightly lower for at least a few more days. That would help people like Apple (AAPL), Tesla shares or even Nvidia form handles, or pull back to bullish support levels. A pause in the market that just starts to make investors nervous about the market or various stocks would likely be a positive, assuming bullish momentum returns.
The market rally still looks broad-based, although the main sectors change from day to day. The new highs exceeded the new lows on the New York Stock Exchange, 108 to 50. On the Nasdaq, the new highs exceeded the lows, 77 to 74.
What to do now
The stock market rally looks healthy, but that doesn’t mean you have to be buying a lot right now. It’s probably a good time to sit back and watch, hold on to current positions that are working and wait to see what the market and leading stocks do next.
When a new market rally is going up, the vast majority of stocks will rally. A less intense advance and occasional setbacks will separate the leaders and the laggards.
There are not many great setups at the moment, with many stocks extending from breakouts or racing up from the bottom. Some names, like Apple stock, could be working on handles, but that’s still days away.
Create those watch lists to be ready when the market steadies and buy signals flourish.
Read The panorama every day to stay in sync with market direction and major stocks and sectors.
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