Early Thursday Dow Jones futures were down slightly, along with S&P 500 futures and Nasdaq futures, with Meta Platforms and Qualcomm reporting earnings.
The stock market rally made big gains on Wednesday after the Federal Reserve raised interest rates by 75 basis points for the second consecutive meeting. Federal Reserve Chairman Jerome Powell indicated that policy makers are looking towards slowing the pace of tightening down the road, even as the pressure on the economy continues and inflation remains focused.
Major indices were already modestly up to strong, buoyed by positive earnings feedback from Microsoft (MSFT), a Google parent the alphabet (GOOGL) and Energy Enphase (ENPH).
Senator. Joe Manchin, DWV, announced a deal with Senate Majority Leader Chuck Schumer late Wednesday on a bill to reconcile with tax, climate and energy provisions. The deal, which could face a number of hurdles, includes a 15% minimum corporate tax rate, drug price controls, increased Obama support, and pro-solar and green terms. Solar and fuel cell stocks were among the winners. Legislation will expand tax credits for electric cars, which should be good news Tesla (TSLA), General motors (GM), although there are different income limits and car rates on credits.
The Federal Reserve raised interest rates by 75 basis points on Wednesday afternoon, raising the rate to a target of 2.25%-2.5%.
The central bank slightly lowered its view of the economy, noting that “spending and production eased.” But “job gains were solid” while “inflation remained high”.
The Fed chief, speaking after the Fed meeting, stressed that policy makers are “strongly committed to lowering inflation.” He said the economy was “resilient” with “very tight” labor markets.
Powell said it would likely be “appropriate” to slow the Fed rate hike as they become “more restrictive”. He expects Fed rates to be “moderately tight” by the end of the year, which he said will be in the 3%-3.5% range.
After the Fed rate hike and Powell’s comments, the odds of a move of 50 basis points on Sept. The rate is up 21 to 56% from about 50-50 before the Fed’s announcement. Moreover, markets are expecting modest moves during the last two Federal Reserve meetings of the year, ending the year around 3.25%-3.5%.
meta pads (META) and Qualcomm (QCOM) main earnings, with chip equipment maker L research (LRCX), Service now (Currently), O’Reilly Auto (Orly), Ford Motor (F) and Tilladock Health (TDOC) as reported late Wednesday.
Meta stock fell strongly after parent Facebook lost its earnings, reporting its first-ever revenue drop and the lowest.
Qualcomm’s stock fell modestly early Thursday due to poor revenue guidance.
LRCX stock is down slightly after better-than-expected quarterly results.
Shares are now lower as the business software giant cuts its subscription revenue guidance after slightly beating second-quarter views.
Ford stock emerged after easily beating views, with a 423% increase in EPS.
ORLY stock fell after earnings fell and the auto parts dealer fell.
TDOC stock fell after a telemedicine specialist steered to the low end of full-year goals. Teladoc posted a heavy loss in the second quarter due to large impairment charges, although revenue outperformed it slightly.
at the same time, best buy (BBY) cut its full-year forecast, citing weak consumer spending amid rising inflation. BBY’s stock fell modestly.
early Thursday, merck (MRK) and Pfizer (PFE) beat views, as Merck raised its full-year sales target and Pfizer raised its lower-end earnings per share forecast. Merck’s stock, which is up about 1% early Thursday, has been trading near the 50-day line as it has consolidated over the past two months. Pfizer stock rose slightly near entering the trend line.
late on Thursday, apple (AAPL) and Amazon.com (AMZN) on tap. Apple’s stock fell modestly below the 200-day streak after crossing the 50-day mark earlier this month. AMZN stock is also somewhat above the 50-day line.
Spirit Airlines-JetBlue Deal
Spirit Airlines (SAVE) has agreed to the acquisition by Jet Blue (JBLU) after completing the merger deal with frontier group (ULCC) last night. It comes after months of controversy in which JetBlue has offered far more but Spirit is concerned about the increased risk of antitrust rejection.
JetBlue will pay $33.50 per share of SAVE cash stock in the transaction, which has a project value of $7.6 billion. SAVE holders will receive $2.50 a share once the merger is approved, plus 10 cents a share, starting in January, as the agreement goes through regulatory review.
SAVE stock rose 4% to 25.26. JBLU stock is up 1%. ULCC stock is down 2%.
Dow jones futures contracts today
Dow futures fell 0.2% against stocks. fair value. S&P 500 futures were down 0.3%. Nasdaq 100 futures lost 0.75%.
Crude oil prices rose more than 2%. Copper futures are up more than 1%.
The 10-year Treasury yield rose 4 basis points to 2.77%.
At 8:30 AM ET, the Commerce Department will release GDP for the second quarter. Economists expect an annual gain of 0.5%, after a 1.6% decline in the first quarter. Successive declines in GDP will not be an official sign of recession in the United States. Economists at the National Bureau of Economic Research judge business cycle changes, usually long after they have occurred.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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stock market rise
Wednesday’s stock market rally, led by big tech earnings, then added to gains on the Fed’s rate hike decision and Fed Chair Powell’s comments.
The Dow Jones Industrial Average rose 1.4% in stock market trading on Wednesday. The S&P 500 jumped 2.6%. The Nasdaq Composite Index is up 4.1%. Small cap Russell 2000 rose 2.3%.
US crude oil prices rose 2.4% to $97.26 a barrel. Natural gas futures were down 3.4%.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) is up 2.3%, while the Innovator IBD Breakout Opportunities ETF (BOUT) is up 1.1%. ETF (IGV) iShares Expanded Tech-Software Sector (IGV) jumped 4.3%, with Microsoft stock being a major component. The VanEck Vectors Semiconductor Index (SMH) jumped 4.7%, with shares of QCOM and major Lam Research components.
The SPDR S&P Metals & Mining ETF (XME) rose 3.4% while the US Global X Infrastructure Development Corporation (PAVE) advanced 2.1%. The US Global Jets ETF (JETS) rose 3.1%. The SPDR S&P Homebuilders ETF (XHB) is up 2.1%. The Energy Select SPDR ETF (XLE) rebounded 2.3% and the Financial Select SPDR ETF (XLF) 1.5%. Healthcare sector fund SPDR (XLV) rose 0.6%, with major holdings of Pfizer and MRK shares.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) rose 6.7% and the ARK Genomics ETF (ARKG) gained 3.9%.
Top 5 Chinese stocks to watch right now
Facebook’s Meta Platform profits and revenue fell, with the social media giant’s third-quarter profit falling.
Meta stock fell 4.5% overnight. Shares jumped 6.55% to 169.58 on Wednesday, moving on Google’s earnings and the general market recovery. META stock has sold 13% in the previous three sessions after weakening Explode, Explode SNAP Report and Guidelines.
Qualcomm’s earnings and revenue slightly outperformed its fiscal third-quarter earnings and revenue perspectives, although gross margin was a bit thin. The wireless chip giant also directed a decline in fourth-quarter revenue, warning of weak smartphone sales.
QCOM stock is down nearly 4% in pre-market trading. Shares rose 2.3% to 153.42 on Wednesday, off the 200-day streak.
Market Rise Analysis
The stock market rally enjoyed big gains on Wednesday after some notable losses over the past few sessions. The NASDAQ and S&P 500 rebounded from near the 50-day lines.
But watch out for the two day reactions. Leading indices also rose after the two previous Fed meetings, but then sold out the next day.
And while investors cheered Powell’s dovish hints a little on Wednesday, they may focus on why Fed rate hikes have slowed, namely the weak economy. This makes the Q2 GDP report particularly relevant.
Meanwhile, last week’s highs will be the next test for major indicators, followed by early June highs.
There is still plenty of stock to buy. Growth stocks may take off from three day consolidations but are often within ugly charts.
It was encouraging to see Microsoft and Google recover strongly despite the lack of earnings perspectives. kombat sele (TPX) Rebounded despite poor results and low steering.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
With the Fed meeting and many big profits out of the way, some of the excessive uncertainty facing investors is fading away. The market rally traversing this news-packed week, so far, is definitely a positive.
There is still a reversal at the Fed’s “second day” meeting. Also, Apple and many others are still reporting this week, along with GDP data and other key economic reports.
With a limited number of good looking stocks in positions, investors may want to increase exposure via broad market or sector ETFs.
But if the market continues to improve, buying opportunities will arise and new positions will make solid gains. So work on your watch lists.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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