Dow Jones futures rose slightly Monday morning, along with S&P 500 futures and Nasdaq futures, after a big week for the Nasdaq and leading stocks.
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Apple (AAPL), Amazon.com (AMZN), Novo Nordisk (NVO), Eli Lilly (LLY), Super microcomputer (SMCI) And Advanced micro devices (AMD) all report this week. The Federal Reserve's latest meeting and monthly jobs report are also on the schedule.
The stock market rebounded strongly last week, fueled by big company profits, despite an alarming inflation report. The Nasdaq and leading stocks were the standouts. while tech titans delivered strong growth and promised heavy AI spending.
AI chip makers Nvidia (NVDA), Broadcom (AVGO) And Astera Labs (ALAB) flashed buying signals, along with AppLovin (APP), CLA (KLAC), Cava group (CAVA) And Embraer (ERJ).
Several other stocks showed buy signals that will yield gains this week, including Hubbell (HUB), Wing stop (WING), Texas Roadhouse (TXRH) And Generac (GNRC)
Investors must take into account the change in the character of the market. But the major indexes are all below their 50-day moving averages. The high earnings calendar could still impact the market and sectors, with Super Micro and AMD holding the key to AI hardware. Apple is a laggard, but it's still a huge tech titan with a huge iPhone ecosystem. Each AI hint can help or hurt a whole range of stocks.
The Fed meeting and key economic data could also derail the emerging market rally.
Shares of Tesla rose early Monday and are set to break above resistance at their 10-week moving average. Tesla (TSLACEO Elon Musk made an unannounced visit to China on Sunday and reportedly received preliminary approval to introduce full self-driving in the country.
Nvidia, Novo Nordisk, Generac, KLA and Cava stock are active IBD rankings, with Eli Lilly stock on the Leaderboard watchlist. Nvidia stock is on SwingTrader. KLA stock is listed at IBD Long-Term Leaders. Wingstop, Hubbell and Texas Roadhouse are along the route IBD50. Broadcom, Hubbell and Super Micro stocks are on the IBD Big Cap 20. Cava was the IBD Stock of the Day on Friday.
Dow Jones futures today
Dow Jones futures rose 0.1% versus fair value. S&P 500 futures rose 0.15% and Nasdaq 100 futures rose 0.25%, with TSLA stock helping.
The yield on ten-year government bonds fell to 4.63%.
Crude oil futures fell slightly.
Remember, overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading during the next regular stock market session.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock market rally
The stock market rally had a strong week, especially the Nasdaq and leading names. The Dow Jones Industrial Average rose 0.7% in stock market trading last week. The S&P 500 index rose 2.7%. The Nasdaq index rose 4.2%. The small-cap Russell 2000 posted a gain of 2.8%.
The rebound at the start of the week was no real surprise after a long losing streak. On Thursday morning, the rally attempt appeared to be in trouble as inflation rates were high Metaplatforms (META) tumbling on accompaniment. But the major indexes pared losses, in part because Meta's sell-off of heavy AI spending boosted Nvidia, Broadcom and AI hardware.
The rally rose on Friday, fueled by strong profit and spending plans Microsoft (MSFT) and Google parent Alphabet (GOOGL).
The Nasdaq rose 2% on Friday, but volume was slightly lower than Thursday, so that didn't qualify as a follow-up day. However, a large number of leading stocks gave buy signals or extended moves.
The major indexes could face resistance at the 50-day mark, with the S&P 500 and Nasdaq near key levels. Investors are in for a tough calendar of earnings and economic news in the coming week.
Ten-year government bond yields rose 5.5 basis points to 4.67% this week, an increase of 48 basis points in just four weeks. On Thursday, the yield on ten-year government bonds reached almost 4.74%, the highest level since November 1.
Markets are now seeing the first Fed rate cut in September, and that's not a lock. Investors are broadly divided on whether there will be one or two cuts in 2024, with a decent chance that no action will be taken at all.
The statement from the Fed meeting and Fed chief Jerome Powell, along with the April jobs report and other key data, should move Treasury yields and the chances of rate cuts.
U.S. crude futures rose 2% to $83.85 a barrel.
Fed Meeting Coming: Here Are the Odds for Rate Cuts
ETFs
Of the growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gained 3.3% last week. The VanEck Vectors Semiconductor ETF (SMH) roared 9.25%. Nvidia is the number 1 holding company, of which Broadcom shares also form an important part.
The SPDR S&P Metals & Mining ETF (XME) fell 0.1% last week. The Global X US Infrastructure Development ETF (PAVE) rose by 2.3%. The SPDR S&P Homebuilders ETF (XHB) gained 3.6%. The Energy Select SPDR ETF (XLE) advanced 0.8%, and the Healthcare Select Sector SPDR Fund (XLV) added 0.7%, with Eli Lilly shares taking a notable position.
The Industrial Select Sector SPDR fund (XLI) rose by 1.8%. The Financial Select SPDR ETF (XLF) gained 1.1%.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 4.9% and ARK Genomics ETF (ARKG) fell by 0.6%. Tesla is the number 1 holding in Ark Invest's ETFs.
Time the market with IBD's ETF market strategy
Nvidia, AI Chip Stocks Flash Buy Signals
Nvidia shares rose 15.2% to 876.90 last week. Friday's 6.1% gain pushed NVDA stock back above the 50-day line and just above a downtrend line, offering an early entry. Nvidia stock has a buy point of 974.
Shares of Broadcom rose 11.6% last week and 3.8% on Friday, pushing above the 50-day mark to 1,344.05. That could make for an aggressive entrance. AVGO stock has a buy point of 1,403.98 based on a double bottom.
Shares of Astera Labs shot up 31.8% this week to 85, matching an all-time high. Friday's 18.7% spike pushed the AI chip's March IPO above resistance around 75, providing an entry point. But the shares now appear extended. ALAB stock has an official IPO base buy point of 95.21. Astera's earnings are expected on May 7.
The deployment of AI chips has greatly influenced the high spending of tech titans.
Super Micro and AMD results on Tuesday night could swing the group, along with Amazon comments on AI spending. SMCI stock and AMD are still well below their 50-day line, although Super Micro had a strong week. Amazon shares rebounded back above the 50-day mark.
AI investments and four more predictions for the next decade
Other stocks clear buy points
KLA shares rose 12.4% this week to 706.26. On Friday, the chip equipment maker posted a nearly 5% gain after strong earnings results, breaking the 50-day mark and breaking a trend line. That offered early access. KLAC stock has a buy point of 729.15 from a flat base.
Cava shares rose 16.7% to 69.61, regaining the 50-day mark on Thursday before heading higher on Friday. The relative strength line reached a new high, indicating Cava's outperformance versus the S&P 500. On Friday morning, the Mediterranean-themed eatery managed to break a trend line and provide an aggressive entry. But towards the end the Cava supply was expanded. Investors could wait for a pullback or for a good base to be formed.
AppLovin rose 10.5% to 73.82 last week, recovering for the first time since the outbreak in late January. Friday's 6.7% gain helped APP shares rebound above the 21-day line and break a short trendline.
Embaer shares rallied this past week after gracefully retreating to the 10-week line over the past four weeks; it is up 9.25% to 25.98. That offered a buying opportunity for the Brazilian aircraft manufacturer. It now has a new flat base with a buy point of 27.25, according to MarketSurge Analysis.
Eli Lilly, Novo Nordisk
Eli Lilly reports early Tuesday, while Novo Nordisk is on tap for Thursday's opening. Expect strong growth thanks to the growing demand for weight loss drugs. Investors will be looking for guidance on production and progress on next-generation obesity rates.
Shares of Eli Lilly and Novo Nordisk are on a flat base, but Lilly has fallen below the 50-day line, while Novo is around that key level.
What to do now
Friday is a great example of why investors should stay engaged and have their watchlists ready.
As the Nasdaq surged higher, a slew of stocks passed the buy point. Although many are still within range, it is useful to buy as close to the entrance as possible. In some cases, like Cava and Astera Labs, stocks were quickly expanded if you didn't take advantage of them by Friday morning.
Friday was a day to consider making some purchases. However, next week's tough earnings and economic news, along with the 50-day line tests for the S&P 500 and Nasdaq, provide reasons not to aggressively increase exposure.
As the market recovers and your investments continue to make progress, you can add exposure as more stocks trigger subscriptions.
So make sure your watchlists are up to date. Stocks that looked damaged on Thursday morning could see action or re-action. And although the names Nvidia and AI stand out again, the market leadership is broad.
Your watchlists and portfolio should reflect that.
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