Dow Jones Futures: Market Rally Revs Higher, Time To Step On Gas? Fed Meeting Looms

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures, with the financial session still underway. But investors’ focus will turn to the important Federal Reserve meeting, as well as the October jobs report.




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The stock market had a volatile week but ultimately showed stability and strength amid the sell-off Microsoft (MSFT), Meta Platform (META), Amazon.com (AMZN) and parent Google Alphabet (GOOGL). The Dow Jones, Russell 2000 and, finally, the S&P 500, all cleared their 50-day lines. Nasdaq did not, but rebounded for strength weekly gains as apple (AAPL) rose in quarterly results.

Earnings season is still full of big companies making headlines. Arista Networks (ANET), Albemarle (ALB), CF Company (CF), The cost of Cheniere Energy (LNG) and The Quanta Project (PWR) report next week. ANET, Albemarle, CF, Cheniere and Quanta Services products are available nearby.

Here is the bonus: In Semiconductors (ON), commonly known as Onsemi, reports before Monday’s opening. ON stock is close to the trendline entry. But this EV chipmaker has shown wild activity in the past few months.

LNG stocks are on the IBD Leaderboard, while ALB and CF Industries stocks are on the Leaderboard watch list. Arista Networks and CF stock are on the IBD 50 list.

The video attached to this article highlights the important market week, while also examining Arista Networks, Albemarle and LNG stocks.

Food conference

The Federal Reserve meets on Nov. 1-2, and policymakers will raise rates again. Some soft inflation data and various central bank moves in global benchmarks have fueled hopes that the Fed will soon deliver on a smaller scale.

Markets are still optimistic that the Fed will increase rates by 75 basis points for the fourth straight meeting, although there is now a chance of only half a minute. But for the December meeting, the bet has changed to a moderate Fed rate hike.

So investors will pay close attention to the Fed’s policy statement at 2 pm ET Wednesday, and especially Fed Chief Jerome Powell’s news conference at 2:30 pm, for any Fed pivot hints.

But there will still be plenty of economic data driving the Fed ahead of the year-end Fed meeting, including two jobs reports. The October job report is due this coming Friday, three days after the September JOLTS survey. Signs of an easing labor market could strengthen hopes of a Fed pivot. But taking a serious job and falling out of work may indicate an increase in high-end and high-end jobs.

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 overnight events in the Dow Futures and elsewhere do not necessarily translate to the actual market in the next stock market session.

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Join IBD experts as they analyze potential stocks in the stock market forum on IBD Live


Market Rally

The stock market rally has some major causes related to swings and divergence during the week, but in the end the main indexes all rose strongly.

The Dow Jones Industrial Average rose 5.7% in market trade, its fourth straight weekly gain. The S&P 500 index gained nearly 4%. The Nasdaq composite rose 2.2%, including Friday’s 2.9% increase. The small-cap Russell 2000 was up more than 6%.

Apple stock rose 5.75% last week, including a 7.6% surge on Friday. Shares of the Dow Jones, S&P 500 and Nasdaq titan rose above their 50-day line and closed below their 200-day. But AAPL stock should continue to advance on the right side of the fundamentals. Microsoft stock, which fell 7.7% on Wednesday, closed the week down 2.6%. Google stock fell 4.8% last week while Meta fell 23%. Amazon’s stock is down 13%, even after Friday’s losses.

The 10-year yield fell 20 basis points to end at 4.01 Friday, ending a 12-week winning streak. The 10-year yield is up from Thursday’s intraday low of 3.91%, around the 21-day line.

Meanwhile, the 3-month yield is at 4.09%, now above the 10-year yield. That’s a stronger bearish signal than the 2-year/10-year trend, which started several weeks ago.

US crude futures rose 3.4% to $87.90 a barrel last week.

ETFs

Among the best performing ETFs, the Innovator IBD 50 ETF (FFTY) rose 3% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 4.8%. The iShares Expanded Tech-Software Sector ETF (IGV) is up 4%, even as MSFT stock is a major holding. The VanEck Vectors Semiconductor ETF (SMH) traded up 3.45% on Friday.

Over the past week, the price of the SPDR S&P Metals & Mining ETF changed +0.79%. Global X US Infrastructure Development ETF (PAVE) changed 5.5%. The change in the price of the US Global Jets ETF changed +5.6%. The SPDR S&P Homebuilders ETF’s dividend yield is 7.1%. The Energy Select SPDR ETF (XLE) and the Financial Select SPDR ETF (XLF) rose 2.7%. The Health Care Select Sector SPDR Fund (XLV) rose 5%, retracing its 200-day line.

Historically, the ARK Innovation ETF (ARKK) is up 8.4% in the past week and the ARK Genomics ETF (ARKG) is up 10%.


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Business near where you buy

ANET stock jumped 9.9% to 121.47 in the worst weekly volume in eight months, retracing above the 50-day and 200-day moving averages. Basically, all of that weekly gain came on Thursday, with Arista Networks seen as a notable gainer in the Metaverse Meta Platforms budget. ANET products have eliminated the short term, providing early entry. A move above Thursday’s high of 126.53 could provide another entry from the long-term trend. But the income is earned on Monday night.

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ALB stock rose 3.8% to 280.16 last week, retracing its 50-day line. The price action has been encouraging over the past two weeks, but volume is light. Albemarle Stock has 308.34 buy points. Strong movement over Oct. 26 high of 287.07 could provide entry for big lithium. Albemarle money will come Wednesday night. Challenging the issue: Be alive (LTHM) reports on Tuesday night. LTHM products have similar graphics.

LNG stocks fell 0.75% to 174.48 last week, but rebounded from the 21-day and 10-week line. Cheniere Energy stock currently has a small cap with a buy point of 178.69. Cheniere Money comes Thursday.

CF stock fell 1.6% to 105.68 last week, turning to Friday’s low after struggling to make a firm decision above the 50-day line in the short term. But it held the 10-, 21- and 50-day lines, which were combined. Clearing Friday’s high of 110.59 could provide an initial entry, with 119.70 an official buying point. CF money will come on Wednesday. Fertilizer team plays Nutrien (NTR) and Incomparable potash (POT) also reports Wednesday, but the stocks don’t look healthy.

Quanta Services rose 5.8% to 141.18 last week, retracing its 50-day line. Shares jumped 8.1% over the past week. PWR stock may be shaping up on the daily chart, which is consistent with the short-term trend. For now, Quanta stock has a buy point of 149.43, according to MarketSmith research. Quanta Services, which provides infrastructure services for utility companies, reported on Thursday.

“Financial Stock” In Semiconductor rose 2.7% last week to 67.48, moving back above its 50-day moving average. It is not far from the trend that is falling by the end of August. Onsemi’s product showed some stability given its fellow EV players Wolfspeed (WOLF) failed to guide last week.

So, On Semiconductor’s earnings will be worth watching early Monday. But ON stock has so much daily and weekly movement that it can be called On-and Off Stock.


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Market Rally Analysis

The stock market showed a rebound in the face of heavy losses from tech megacaps. The S&P 500, after breaking through resistance at its 50-day moving average, advanced sharply on Friday. The Russell 2000 continued its 200-day streak while the Dow Jones edged higher Friday as its winning streak extended to six periods and four weeks.

The Nasdaq has been slowing, but it bounced back above its 21-day line on Friday and remains strong for the week.

Although the past week has been encouraging, we don’t know if this is a bear market session or something else.

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Could the Nasdaq now break above the 50-day line, and run to the 200-day line and beyond?

While earnings grabbed the headlines, economic output and a weak dollar were the main tailwinds for stocks last week. Those reflect the Fed pivot hopes.

The Fed’s rate hike next Wednesday and the October jobs report on Friday will be key for the market rally.

Meanwhile, in a small change, while the key index is moving higher, the leading stocks are looking a little more bearish.

As AlphaTrends’ Brian Shannon said on IBD Live Friday, it’s “pretty skinny” out there when it comes to buying opportunities.

Energy names are still doing well, and LNG stocks are close to buying. So, some names for safe growth in the health care space. Prices, auto parts dealers, insurance agents and a few restaurants are the highlights, as well as most of the defense game. But most of those names, incl Eli Lilly (LLY) and O’Reilly Automotive (ORLY), already extended.

High traditional names do not fare well. There is some noticeable change or decay in the space. The lack of cloud computing power for Microsoft’s Azure and Amazon Web Services has reduced the scope of cloud software. But Meta budget helps ANET products, Clean storage (PSTG) and maybe some chipmakers like Nvidia (NVDA). Intel (INTC) poured in negative results and guidance, suggesting that bad news is bad news for INTC and the stock market in general. But these people often fail.


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What You Should Do Now

The stock market had some big headwinds last week, but they have finally settled down nicely. But the Fed meeting looms large this week, and the flood of earnings continues.

Investors may add some exposure, but may choose to wait at least until the Fed meeting. In the case of ALB products, Arista Networks, CF Industries and many others, investors should wait for financial results. The number of limited stocks that are currently active is also a reason to be cautious about adding new positions. Continuous intraday, daily and weekly changes for major indexes and individual stocks add to the level of volatility.

But, the stock market is doing well. Investors should be following. Create your checklist, make sure you have a good selection.

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

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

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