Stock market rally Fed, Apple, Tesla, Cloud;  What to do now

Stock market rally Fed, Apple, Tesla, Cloud; What to do now


Dow Jones futures open Sunday night, along with S&P 500 and Nasdaq futures. Even after Friday’s session ended on a positive note, the stock market rally took a hit last week, with major indexes falling after dovish comments from Federal Reserve chairman Jerome Powell.




X



The Nasdaq had its worst week since January when megacaps crashed and cloud software crashed.

Apple (AAPL), Amazon.com (AMZN) and Google Parents letter (Google) all lost more than 10% for the week, with the formation of Facebook Meta Platforms (Finish it), Tesla and Microsoft shares were not far behind. Google Stock, Meta, Amazon.com (AMZN) and Microsoft (MSFTthey all went to the bear market. Apple Store i Tesla (DSLA) no, but they are close.

At the same time, Twilio (TWLO) and Atlasian (Group) fell on Friday on disappointing results and tips, losing more than 40% during the week. Other software titles have declined with or without revenue.

A market rally as the central bank tries to fight a downturn in key technology sectors? It’s hard work. Therefore, while some stocks and sectors are showing strength, investors should be very cautious in the current environment.

Dow Jones Futures Today

Dow Jones futures open at 6 pm EST on Sunday, along with S&P 500 and Nasdaq 100 futures.

Remember this is a night operation Dow futures The process you follow elsewhere does not translate into real business The stock market period.


Join IBD experts as they research potential stocks in the IBD Live conference call


Compete in the stock market

The stock market started the week on a positive note, but it sold off on Wednesday afternoon after negative comments from Federal Reserve chairman Jerome Powell. Major indices gave Jupiter more ground. Shares peaked on Friday after a mixed jobs report, but eventually closed for the day.

Dow Jones Industrial Average Down Another 1.4% Last Week Trading on the stock market. The S&P 500 index fell 3.3%. The Nasdaq composite fell 5.7%, its worst loss since the week ended Jan. 21. The small-cap Russell 2000 was down 2.4%.

The yield on 10-year government bonds rose 15 basis points to 4.16%. The 10-year yield broke a 12-week streak and regained its gains after a short trade to return 4%.

The dollar rose 0.2% for the week, but fell 1.9% on Friday, its single-day decline in years. This contributed to the stock market’s gains on Friday.

Markets now see a 61.5% chance of a 50bp hike at the December Fed meeting. The consumer price index for October will be released on Thursday. The November employment and CPI reports will be published before December 14, the decision to raise the federal funds rate.

US crude oil futures rose 5.4% last week to $92.61 a barrel. Natural gas increased by nearly 13%.

The technological divide

Apple shares, which rose to the 200-day line last week, fell 11.15% to 138.38 last week. AAPL shares were close to a penny below October’s low, though they still have some time before June’s bear market. Microsoft fell 6.1%, Google 10.1%, Amazon 12% and META shares 8.5%, hitting multi-year lows. Tesla shares fell 9.2% for the week, touching an Oct. 24 low on Friday. After a strong start to the week on Tuesday it was 237.40.

Meanwhile, these are dark days for cloud software. Here are some examples: Atlassian shares fell 29% on Friday and 38% during the week. Shares of Twilio fell nearly 35% on Friday and 43.5% during the week. Snowflake (Snow), which won’t be reported for several weeks, fell 17% for the week.

At the same time, Fortinet (FTNT) fell 17.5% for the week as a weak account outlook offset strong profits and optimistic earnings forecasts. Paycom (PAYC) decreased by 10.3% despite good results and tips.

Companies looking to cut costs may reduce software spending when budgeting for 2023.

ETFs

in the middle The best ETFsIBD Inventor 50 ETF (FFTY) fell 1.2% last week, while ETF Innovator Breakout Opportunities IBD (Nerves2% lost. iShares Technology & Software Extended ETF (IGV) fell by 10.2%, with MSFT holding the lion’s share. VanEck Vectors Semiconductor ETFSMH) fell just 0.7% after jumping 4.65% on Friday, ending at a weekly high.

SPDR S&P Metals & Mining ETF (XME) last week increased by 2%. ETF Global X for US infrastructure development (bitumendecreased by 0.1%. US Global Jets ETF (JETincreased by 0.3%. SPDR S&P Homebuilders ETFXHBdecreased by 5%. Energy Select SPDR ETF (XLE) increased by 2.4%, below the highest level in eight years. SPDR ETF Selection (XLFdecreased by 0.9%. Healthcare Select Sector SPDR Fund (XLVIt was up to 1.5%.

Reflecting the most speculative actions, the ARK Innovation ETF (ARKK) fell 9.4 percent last week and the ARK Genomics ETF (ARKGwithdrew by 4.65%. Tesla shares are the main bet in the ArcInvest ETFs.


The five best Chinese acts to watch right now


Analysis of market meetings

The stock market rally had a tough week, with a hawkish Fed and weak weighting in major indexes. The Dow Jones, which led the market higher, fell slightly but fell below its 200-day moving average. The Russell 2000 faced resistance near the 200-day line but rebounded on Friday to close above the 50-day line. The S&P 500 hit a 50-day low.

The Nasdaq composite, which never closed above its 50-day moving average, was slightly lower. Day after day Wednesday, a bad sign.

Major indexes extended losses on Thursday and then fell on Friday on a mixed jobs report.

Bad market activity and large swings in many stocks have moved to a “market under pressure”.

The main driver of the market was the chairman of the Fed Powell, who took the rug out of the market meeting, signaling the point of a small increase but a higher rate of the federal funds.

Meanwhile, megacap technology stocks including Apple, Tesla and Amazon have suffered heavy losses. Cloud software names like Atlassian and Twilio have disappeared from the highlights in recent earnings and tips.

By the way, the chips haven’t had a bad week, but only a few record trading names.


Tesla vs BYD: Which EV Giant Is the Best Buy?


There are many changing market segments. In general, the health sector appears to be stable. Energy companies performed well, including various crude oil reserves, LNG facilities and coal mines, as well as solar energy stocks.

Lithium and some metals work well. Infrastructure companies for the energy, utilities and telecommunications industries are a good area. A rare area of ​​technology where networking companies are leaders. Some restaurants and cheap shops show strength. Hybrid funds, brokers and brokers in particular, recorded huge gains.

However, it’s hard to see significant market growth when you’re holding back such large tech sectors. Major indexes will struggle to advance and software names from Apple, Google, Tesla, and the cloud will be left behind. But should we try to move forward when these areas are declining or not being used?

If inflation reports show a clear and significant slowdown, slowing the pace of Fed rate hikes, maybe megacaps and cloud software will be cut. However, the return of technological leadership may take place in some ways. On the other hand, if the October 10 CPI report shows that inflation is still low, the technology balance may push the leading sectors to end their gains in the market.

Tuesday is election day. The stock market is doing better with a divided government, and Republicans want to regain control of the House and Senate. But the political outlook is predicting at least one House GOP victory for the rest of the year, so it’s unclear whether Tuesday’s actual results will be a big catalyst.


Market timing and ETF IBD market strategy


What to do now

Stock market bulls are under pressure. Central banks go from fast and furious to slow and long, but they are still hawkish. The tech industry is a train wreck. Major indices declined by a few significant positions. The leading indices and stocks are subject to large fluctuations day in and day out.

This is not the best environment to buy stocks. Investors must either explicitly or simply limit their exposure to various levels of loss.

As the S&P 500 and Nasdaq indexes move above their 50-day moving averages, investors may begin to increase their exposure if market growth shows renewed strength. But that would require improved technology and inflation data to show the cooling trend.

If the situation improves, you need to be ready. Most of the stakes are set and many are not far off. So make your watch lists, be patient and participate.

Depending Big picture Each day should be aligned with market trends and leading stocks and sectors.

Follow Ed Carson on Twitter @Ibd_ecarson Stock updates and more.

You may like:

Why this IBD tool makes it easy MrCh For better stock

Achieve greater success with MarketSmith

What? Do you want to avoid quick profit and big loss? Try SwingTrader

The best stores to buy and view

IBD Digital: Access IBD’s stock lists, tools and analysis today