Dow Jones Futures: Apple Leads Risk-On Market Rally; Big Earnings Movers

Dow Jones futures edged higher Thursday morning, along with S&P 500 futures and Nasdaq futures, amid another busy night and morning of earnings. The stock market rally rose strongly on Wednesday, with tech titans charging higher.




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apple stock, Amazon.com (AMZN), Microsoft (MSFT), parent Facebook Meta Platforms (META), You’re here (TSLA) and Google parent Alphabet (GOOGL) were among the leaders. Apple (AAPL) offers an aggressive buy point while Microsoft and Google stock, if you squint, are approaching possible entries.

Highly valued former growth leaders had a strong session as well, with risk-on investing back in vogue.

Overnight Earnings

Fortinet (FTNT), Albemarle (ALB), McKesson (MCK), ELF-Beauty (ELF) and Axcelis Technologies (ACLS) were notable earnings reports after the close. All closed Wednesday near buy points. But while McKesson, Axcelis, ELF and ALB stock rose, FTNT stock plunged.

Luxury EV maker Lucid Group (LCID) also reported quarterly results. LCID stock dive on weak revenue and production guidance.

Early Thursday, Eli Lilly (THERE IS), Lantheus (LNTH), Quanta Services (PWR), Cheniere Energy (NGL), New Fortress Energy (NFE), train software leader Datadog (DDOG) and China e-commerce firm Ali Baba (BABA) reported.

Eli Lilly, Lantheus, Quanta Services and Cheniere Energy are on IBD Leaderboard. NFE stock is on the Leaderboard watchlist. Microsoft, Google and FTNT stock are on IBD Long-Term Leaders. New Fortress Energy and ACLS stock are on the IBD 50. PWR stock is on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures were 0.1% above fair value. S&P 500 futures advanced about 0.1% and Nasdaq 100 futures rose 0.1%. Futures had been modestly higher earlier this morning.

Crude oil prices rose slightly.

The 10-year Treasury yield fell 5 basis points to 2.7%.

The Bank of England raised rates once again, but this time by a half-point, its biggest move since 1995.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


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Stock Market Rally

The stock market rally rebounded strongly Wednesday, led by techs after Tuesday’s Dow-led retreat.

The Dow Jones Industrial Average rose 1.3% in Wednesday’s stock market trading. The S&P 500 index climbed 1.6%. The Nasdaq composite popped 2.6%. The small-cap Russell 2000 gained 1.4%.

The 10-year Treasury yield edged up 1 basis point to 2.75%, but was well off its intraday high 2.85%.

US crude oil fell 4% to $90.66 a barrel, below where it closed on Feb. 23, just before Russia’s Ukraine invasion. OPEC+ agreed to up September production quotas by a slim 100,000 barrels per day, with actual output gains likely to be negligible. But demand concerns continue to pressure oil prices, with US crude and gasoline inventories unexpectedly rising in the latest week.

Megacap Stock Action

Apple stock popped 3.8% to 166.13, a three-month high. Shares moved above their 200-day line on Friday following earnings, then pulled back modestly to start this week. Investors could use Wednesday’s move as an aggressive entry, though volume was below average. AAPL stock is still a long way from the peak and the 183.04 buy point, but its relative strength line is already at a new high.

MSFT stock rose 2.8% and Google 2.6%. META stock jumped 5.4% but is still below its long-sliding 50-day line. AMZN stock gained 4%, moving toward its 200-day line.

Tesla stock climbed 2.3%, its sixth straight advance and closing above its 200-day line. Tesla shareholders are expected to OK a 3-for-1 TSLA stock split today.

ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 0.4%, with energy names weighing on the funds. The iShares Expanded Tech-Software Sector ETF (IGV) popped 3.2%. MSFT stock is a major IGV holding, with Fortinet and DDOG stock also components. The VanEck Vectors Semiconductor ETF (SMH) advanced 2.4%.

SPDR S&P Metals & Mining ETF (XME) fell 0.4% and the Global X US Infrastructure Development ETF (PAVE) climbed 0.7%. US Global Jets ETF (JETS) ascended 3%. SPDR S&P Homebuilders ETF (XHB) rose 0.6%. The Energy Select SPDR ETF (XLE) slumped 2.9% and the Financial Select SPDR ETF (XLF) climbed 1.5%. The Health Care Select Sector SPDR Fund (XLV) advanced 0.9%, with LLY stock a holding.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) jumped 6.1% to a three-month high. ARK Genomics ETF (ARKG) leapt 4.7%, matching a three-month high intraday. TSLA stock is a major holding across Ark Invest’s ETFs.


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Key Wednesday Night Earnings

McKesson earnings topped views with the drug distributor guiding higher on EPS. MCK stock rose slightly in overnight trade. Shares fell 2.4% to 327.10 on Wednesday, after dropping below the 340.04 flat-base buy point on Tuesday, according to MarketSmith analysis.

Fortinet earnings slightly beat Q2 views while revenue and Q3 guidance were roughly in line. FTNT stock tumbled early Thursday, signaling a move below the 200-day and possibly the 50-day line. Shares rose 4.2% to 62.88 on Wednesday, closing above the 200-day, a big stumbling block in recent months. Fortinet stock has a 74.45 buy point, but a strong move above the recent July 12 high of 63.56 could have offered an early entry or a place to start a Long-Term Leader position.

Albemarle earnings exceeded forecasts while the lithium play also guided higher yet again. ALB stock climbed solidly early Thursday. Shares fell 1.8% to 239.54 on Wednesday, as rival Livent (LTHM) reversed sharply lower despite seemingly strong earnings. ALB stock has a 273.78 buy point from a deep cup-with-handle base.

ELF Beauty earnings easily beat fiscal Q1 views while sales growth accelerated. The budget cosmetics maker also guided higher for the full fiscal 2023. ELF stock rose modestly in extended trade. Shares dipped 0.6% on Wednesday to 33.87, in range from a 33.54 cup-with-handle buy point.

Axcelis earnings easily beat while 50% sales growth slightly beat. The chip play guided up on Q3 revenue. ACLS stock was modestly higher overnight. Shares rose 3.8% to 72.70 on Wednesday. Axcelis stock is working toward an 83.83 cup-base buy point, well extended from possible early entries.

Lucid earnings were mixed, with a smaller-than-expected loss but revenue well below views. Lucid slashed its full-year production target yet again. While the Lucid Air sedan, a rival to the Tesla Model S, has won critical acclaim, production and supply-chain issues have plagued the EV startup, much like Rivian (RIVN). LCID stock tumbled in extended action. Shares rose 4% to 20.56 on Wednesday, far below the November peak of 57.75.

Key Thursday Morning Earnings

Eli Lilly earnings were in line with views, but revenue was light and the drug giant cut full-year targets. LLY stock fell modestly early Thursday. On Wednesday, shares fell 2% to 313.83, below its 50-day line and just below an old buy point.

Alibaba earnings and revenue topped consensus. BABA stock popped before the open, but still below its 50-day and 200-day lines. Alibaba stock rose 3.35% to 95.72 on Wednesday.

Quanta Services narrowly topped EPS forecasts and topped revenue views. PWR stock fell 1% before the open. Shares dipped 0.9% on Wednesday, trading just below a buy point after breaking out late last week.

Lantheus earnings and revenue comfortably beat. LNTH stock rose solidly before the open. Shares dipped 0.3% to 75.89 on Wednesday, in range from a 73.88 buy point.

Datadog beat EPS views, but in-line guidance and an acquisition sent DDOG stock plunging before the open. DDOG stock had rallied 5.7% on Wednesday, nearing short-term highs.

Cheniere Energy earnings appeared to miss views though revenue surged 165%, easily beating. The liquefied natural gas play also raised some full-year guidance. LNG stock rose modestly, signaling a possible move above a traditional buy point already clearing a trendline entry last week. Shares dipped 0.3% on Wednesday.

New Fortress Energy earnings reported a net loss, but 69 cents a adjusted vs. a small loss a year earlier. Revenue leapt 161%. NFE stock rose 1% early Thursday, moving close to a cup-base buy point. Shares dipped 0.7% on Wednesday.

Market Rally Analysis

The stock market rally had strong gains Wednesday after retreating modestly Tuesday.

The Nasdaq is now clearly above its early June highs, with Nasdaq volume running much higher than Tuesday. Apple, Meta, Google and ARK-type stocks ran up.

The S&P 500, Dow Jones and Russell 2000 are still below their early June peaks, though the S&P 500 and Russell are getting close.

Market breadth is improving while leadership is expanding.

Red-hot solar stocks had a rough session. SolarEdge (SEDG) crashed, wiping out big recent gains. Goal group leader Enphase Energy (ENPH) was barely phased.

Oil stocks pulled back with lower crude prices, but this could be a chance to build handles on cup bases.

Speculative growth names were among Wednesday’s big winners, reflecting the risk-on trading shift. The vast majority still needs a lot of work to be actionable. While bottom fishing has been working overall since mid-June, previous efforts to guess the bottom in volatile names didn’t do so well.

At this point, a lot of beaten-down stocks have rallied quite a bit, while still facing a lot of overhead resistance.


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What To Do Now

The stock market rally continues to make progress. It’s a time to be invested, but with modest exposure. The market rally could yet falter, with Fed rate hikes and the economy still big uncertainties. Investors should avoid being too concentrated in a particular industry and may want to continue taking partial early profits. Sector rotations and stock shakeouts are still common.

Work on those watchlists. Many stocks, including Apple, Tesla and FTNT, are reclaiming some key long-term averages and may be flashing early entries or at least signaling that investors should be paying attention again.

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

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

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