Dow Jones futures fell slightly overnight, while S&P 500 futures and especially Nasdaq futures rose on parent Facebook. Meta Platform (META) is increasing in its financial report. That followed a big day for the stock market as investors praised Fed Chairman Jerome Powell.
X
Apple, Amazon and Google parents Alphabet (GOOGL) is on tap.
Major indexes returned on Wednesday, turning higher after the expected Fed meeting and especially the Fed chief Powell. The Federal Reserve raised rates by a quarter and said it still sees “continuing increases” ahead. Powell confirmed that, but said it was “good” and “satisfying” that inflation was coming down even without the labor market slowing.
The market rally cleared other levels on Wednesday, with a large number of stocks breaking or flashing other buy signals, including the Chinese search-and-AI giant Baidu (BIDU), one who makes explosions Research Lam (LRCX), a network management software maker Dynatrace (DT), Delta Air Lines (DAL) and others.
Capital gains
Meta Platforms’ earnings fell short, but revenue, sales direction and Facebook users drove the idea. He also announced a $40 billion stock buyback. The parent of Facebook and Instagram reduced its forecast for expenses, including budget. META stock is up 20% after hours. Shares rose 2.8% to 153.12 in Wednesday’s session, retracing the 200-day line for the first time in more than a year and shrugging off weak financial guidance. Snap (SNAP).
Qorvo (QRVO) Q3 earnings. But, like many other chip stocks, Qorvo has led well for the current quarter. QRVO stock fell 3^ in extended trading. Shares of 5G and iPhone-chip maker Apple rose 4.5% to 113.53 on Wednesday.
Nice ELF (ELF) monitor revenue and win revenue in comfort. EPS doubled, with growth growing fastest for the quarter straight. Sales rose 49%, picking up pace for the fourth quarter in a row. He was also led by a jewelry designer. ELF stock rose 16% to a record high in the overnight session. The stock rose 1.8% to 58.58 on Wednesday, well below a record high set in Jan. 6.
Early Thursday morning, drug giants Eli Lilly (LLY), Merck (MRK) and Bristol Myers Squibb report (BMY). But big pharma, which was successful in the 2022 bear market, is now declining in the lead-up to the 2023 market rally. LLY, Merck and Bristol Myers stocks are all below their 50-day moving averages.
Thursday evening, apple (AAPL), Amazon.com (AMZN) and Google reports. All are recovering in 2023, but below their 200-day line. Stocks of GOOGL and Amazon rose nearly 4% overnight at the mercy of Meta.
Fed rate hike ‘continuing’
As expected, the Fed raised rates by a quarter on Wednesday, raising the fed funds rate to 4.5%-4.75%. That follows a half-point Fed rate hike in December and four straight 75-basis-point increases before that.
The Fed’s policy statement still says that policymakers expect “continued increases” in the fed funds rate, a clear indication that the Fed’s rate hike is not over.
‘Good thing’ Fed Chief Powell
Fed Chairman Jerome Powell confirmed that, saying there is “more work to be done,” later clarifying that “we are talking about an increasing number of couples.” He added that the labor market remains “strong.”
However, Powell also said that “the process of termination has begun.” He said that inflation is falling even without the employment situation slowing down significantly, saying that is “good” and “satisfying.” He also said that those who make laws “have no motivation, no desire to overdo it.”
The speech seemed to spark the afternoon session.
On Wednesday morning, the Labor Department reported that job openings reached 11.01 million, well above expectations. On Friday, the January jobs report hits. But Powell’s comments suggest that markets shouldn’t be fixated on job data as it is.
The market expects the Fed’s next quarterly rate hike in late March, and the probability rose slightly Wednesday to 86%.
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But despite Powell’s endorsement of “a couple more” hikes, investors are still counting on the Fed’s March rate hike being the end. That would leave the fed funds rate at 4.75%-5%, below the Fed’s forecast for 5%-5.25%.
Meanwhile, the European Central Bank and the Bank of England are expected to raise rates by 50 points on Thursday morning.
Dow Jones Futures Today
Dow Jones futures fell 0.3% vs. useful value. S&P 500 futures rose 0.15%. Nasdaq 100 futures rose 0.8%, with META stocks leading the way, along with Google and AMZN stocks.
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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Market Rally
The stock market fell slightly ahead of the Fed report, but rebounded according to Fed Chairman Powell.
The Dow Jones Industrial Average rose slightly in Wednesday’s trading, but was down more than 1% intraday ahead of the Fed’s announcement. The S&P 500 index rose more than 1%. The Nasdaq composite rose 2%. The small-cap Russell 2000 gained 1.5%.
U.S. crude oil prices fell 3.1% to $76.41 a barrel as domestic inventories rose for a sixth straight week. Natural gas prices fell 8%, continuing to fall. Copper futures declined 2.8%, with prices settling ahead of the Fed’s rate announcement.
The 10-year yield was down 13 basis points at 3.4%. The two-year yield, which is tied to Fed policy, fell 10 points to 4.11%. That’s below the current rate limit.
The US dollar fell to an eight-month low.
ETFs
Among the younger ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.5%. The highest price of the iShares Expanded Tech-Software Sector ETF is 2.85 %. The VanEck Vectors Semiconductor ETF’s highest dividend yield is 4.7%. Lam Research and AMAT products are the main SMH used, and QRVO products are also part.
Historically, the ARK Innovation ETF (ARKK) sprinted 4.4% and the ARK Genomics ETF (ARKG) gained 2.4%.
SPDR S&P Metals & Mining ETF (XME) 1.8% and Global X US Infrastructure Development ETF (PAVE) 1.5%. The US Global Jets ETF (JETS) climbed 1%, with DAL stock the top performer. SPDR S&P Homebuilders ETF (XHB) changed 2%. The Energy Select SPDR ETF (XLE) fell 2% and the Financial Select SPDR ETF (XLF) was flat. The Health Care Select Sector SPDR Fund (XLV) rose 0.5%.
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Market Rally Analysis
The major indexes continued to build, with big gains after Fed Chairman Powell began speaking.
The Nasdaq appears to be above its 200-day moving average in late 2022. The Russell 2000 has clearly cleared that stage.
The S&P 500 also looks set to leave its 200-day line behind. The benchmark index also hit December highs.
The Dow Jones, which is now a laggard index, tested the 200-day line before rising for modest gains.
Keep in mind that markets usually have a two-day reaction to a Fed meeting.
Meanwhile, the rest of the week is still full of news. Big money Thursday night from Apple, Amazon, Google, Qualcomm (QCOM) Ford motor (F) and others, in the January job report on Friday.
The S&P 500’s biggest daily gainers and losers over the past few weeks are dominated by income earners.
DT products, OI Glass (OI), Styker (SYK) and Atkore (ATKR) closed on Wednesday.
But there was a lot of positive movement without money Wednesday, especially after Fed Chairman Powell’s comments.
LRCX products and great infrastructure Application installed (AMAT) broke from the bottom base, while DAL stock and JB Hunt Transport Services (JBHT) and Performance Food Group (PFGC) eliminated traditional procurement. BIDU business also broke.
Arista Networks (ANET), Clean storage (PSTG) and Global setting (GFS) all cleared early Wednesday entries. However, Meta Platforms’ reduced capex plans could hurt Arista and White Storage. ANET stock fell slightly after hours.
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What You Should Do Now
The stock market index continues to increase, with the Nasdaq, the Russell 2000 and the leading stocks in the vanguard. The Fed meeting is now out of the way, as there is growing awareness of the central bank’s limitations.
There is evidence that the current market rally will be a permanent improvement.
Therefore, investors can add new levels on Wednesday, using the opportunity to buy new stocks. It is still wise to do it slowly, not to buy too long or too much attention. If this market rally has legs, increasing exposure can make you money faster or more. If this marketing stumbles, even if it’s only for a short time, you won’t be caught. With Apple and Google’s money coming to the Nasdaq and running fast in 2023, a setback would not be surprising.
Before buying stocks, you need to find them and study them. Keep your checklist and prepare your game plan.
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