Along with the S&P 500 and Nasdaq futures, Dow Jones futures also dropped early on Friday. Tesla (TSLA) investors accepted a large compensation package for Elon Musk, who hinted at electric vehicles in the future. Adobe’s (ADBE) earnings, meanwhile, skyrocketed.
Thursday’s stock market rise was uneventful in spite of yet another subdued inflation report. Supported by stocks of Tesla, Nvidia (NVDA), Broadcom (AVGO), and Arista Networks (ANET) the Nasdaq reached a new closing high while the S&P 500 recorded a closing best. While there were pockets of weakness, the market as a whole fell.
ELF Beauty (ELF) and Chipotle Mexican Grill (CMG) were both active on Thursday. GE Aerospace (GE), however, distinctly dropped below its 50-day mark.
On the IBD Leaderboard are Nvidia stock and ELF Beauty. SwingTrader offers Chipotle stock. The IBD 50 includes the stocks of Nvidia and Arista. The IBD Big Cap 20 includes the stocks of Nvidia, Arista and Broadcom. The IBD Stock of the Day on Thursday was ELF Beauty.
In addition to discussing Thursday’s market activity, the video embedded in the post examined Chipotle, Universal Health (UHS), and GE stock.
Dow Jones Futures Today
In comparison to fair value, Dow Jones futures fell 0.6%. Futures on the S&P 500 fell 0.3%. Futures for the Nasdaq 100 fell 0.1% Overnight support for the S&P 500 and Nasdaq 100 came from Adobe shares.
After a Bank of Japan meeting uncertainty weighed on markets all night. Concerns have also been raised over political instability in France in the wake of President Macron’s recent request for early elections in response to a poor performance in the European Parliament elections.
The yield on the 10-year Treasury fell to 4.2%.
Prices for crude oil increased somewhat.
Recall that trading in the Dow futures and other markets during the overnight period may not correspond with actual trading during the following regular session of the stock market.
Adobe Earnings
Following the closing, Adobe’s earnings garnered the most attention. The software behemoth guided slightly higher for EPS and lower for Q3 revenue.
In extended trading, ADBE’s shares surged by over 10%, indicating a break over the 50-day line for the first time since February. The market leader in software saw a 0.25 percent decrease to 458.74 on Thursday.
Rally in the Stock Market
Even if the stock market rebound had uneventful results, it did gradually recover from its early afternoon lows.
Achieving a record high, the Nasdaq composite closed Thursday’s stock market trading up 0.34% at 17,668. The S&P 500 index closed at a record high of 5,334, up 0.23%.
On Thursday, Broadcom’s shares surged 12.2% due to favorable forecast, solid earnings, and plans for a 10-for-1 split. The Nvidia stock increased 3.5% Tesla’s shares surged 2.9%. Arista which has a market valuation of “only” $104 billion, saw a 6.5% increase while using a lot of Broadcom equipment. The stocks of Broadcom, Nvidia, and ANET are all extended and at highs.
The 50-day barrier was barely crossed by the 0.2% decline in the Dow Jones Industrial Average.
Despite a 0.9% decline, the small-cap Russell 2000 closed just above its 50-day moving average. The S&P MidCap 400 fell 0.6% falling short of its critical threshold.
Despite a 0.3% decline the Invesco S&P 500 Equal Weight ETF (RSP) recovered from its lows to maintain its 50-day line.
Although not by much, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) dropped 0.4%.
Because of a few megacaps, the Nasdaq is 7.6% above its 50-day line, which is fairly prolonged. In fact, even for the leader in AI, Nvidia’s stock is going to very high heights as it is already 34.3% over its 50-day moving average.
However, other market segments are struggling to maintain the 50-day line. It’s an interesting blend to keep an eye on.
This week’s gains in U.S. crude oil prices have totaled $4.1%, or 12 cents per barrel. Futures for copper fell 1.6%, falling almost 12% since May 21.
At 4.24% the yield on the 10-year Treasury decreased by 5.5 basis points the lowest since late March.
The dollar has fared well despite the declining trend in the Treasury yield; on Thursday it rose to levels close to 2024 highs.
ETFs
The iShares Expanded Tech-Software Sector ETF (IGV), a growth ETF, saw a 1.05% loss; one prominent investment in IGV was Adobe stock. The key components of the 1.6% increase in the VanEck Vectors
Semiconductor ETF (SMH) were Nvidia and Broadcom shares.ARK Innovation ETF (ARKK) fell 1.6% and ARK Genomics ETF (ARKG) lost 1.6% reflecting more speculative story equities. The top holding in all of Ark Invest’s ETFs is Tesla shares. Earlier this week, Cathie Wood’s Ark set a price target of $2,600 for TSLA stock.
The SPDR S&P Metals & Mining ETF saw a 1.2% loss. The SPDR S&P Homebuilders ETF saw a 0.35 percent increase. XLE, the Energy Select SPDR ETF, lost 0.9% of its value.
The Health Care Select Sector SPDR Fund (XLV) dipped 0.1%, with UHS stock a component. The Industrial Select Sector SPDR Fund (XLI) declined 0.6% with GE stock the No. 1 holding.
The Financial Select SPDR ETF (XLF) edged down 0.1%.
Read This – Futures fall as markets await Fed decision on CPI
Stocks In Buy Areas
The shares of Chipotle increased 3% to $3,266.60, breaking out of a brief consolidation that nearly resulted in a flat basis.
The move on Thursday is still within range of the 50-day line bounce. It is also a continuation of that bounce.
The ELF stock increased 1.6% to 200.44, once more encountering resistance at its cup-with-handle purchase point of 202.58. Since the handle’s Wednesday downtrend was broken, it is actionable.
GE Stock
According to MarketSurge, GE stock dropped 3.3% to 155.69, decisively undercutting both the 10-week and 50-day lines as well as the trough of its 8%-deep flat base.
If GE Aerospace finishes the week more than 2% below its 10-week line, longer-term investors may want to consider taking at least partial profits. However, this could just be a shakeout.
Tesla Shareholders OK Elon Musk Pay Deal
The enormous Elon Musk pay package was approved by Tesla shareholders, who also supported the company’s reorganization from Delaware to Texas. During Thursday night’s annual Tesla shareholder meeting, the company made the announcement.
Musk stated late on Wednesday night on his social media platform X that both polls were winning by “wide margins.”
If Elon Musk didn’t get the pay arrangement, there had been fear that he might quit Tesla or take more aggressive steps to move AI resources, efforts, and personnel to his privately held firms.
The payout could yet be blocked by the Delaware court that earlier this year invalidated Musk’s salary agreement.
Musk Teases Future Tesla EVs
At the shareholder meeting, Musk hinted at three cars that were covered. It looked like a van for one and a small automobile for the other. A third might be a robotaxi prototype that is shown at a function on August 8.
Additionally, Musk stated that Tesla will soon stop producing the Foundation Series Cybertrucks. In the third quarter regular Cybertrucks will begin to operate without the $20,000 premium.
Tesla Shares
On Friday, shares saw a little early rise.
Following Musk’s statement, Tesla’s stock increased 2.9% to 182.47 on Thursday although it fell from its intraday high of 191.08. Although the TSLA stock is in a lengthy downturn and is somewhat away from the 200-day line, it is still above the 50-day line.
Important note
While most of the market is battling around important levels, the Nasdaq is considering the possibility of a pullback. All of this might work out nicely with leading equities advancing broadly after forging handles
pullbacks, or bases.Thus, as usual, you should update your watchlist.
Increasing exposure at this time is not really necessary, especially for those who are already making large investments. You may counterbalance any fresh purchases by offloading certain losers or laggards.
In general, it makes sense to hang onto winning stocks for the time being.
Source
Investors.com
