Dow Jones futures were little changed early Friday, along with S&P 500 futures and Nasdaq futures. ELF Beauty (ELF) headlined earnings reports Thursday night. Nvidia chipmaker Taiwan Semiconductor (TSM) reported booming July sales before Friday’s open.
The stock market rally attempt Thursday had a strong session as falling jobless claims eased recession fears, with the key indexes closing solidly higher and Nvidia (NVDA) leading the megacaps.
The next step is for the rally attempt to stage a follow-through day, which could come as soon as Friday. Investors should get ready by building up their watchlists.
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This Consumer Giant’s Earnings Could Give Clues About Health Of Economy
Meta Platforms (META), GE Aerospace (GE), Spotify (SPOT), Palantir Technologies (PLTR), Fortinet (FTNT), Intuitive Surgical (ISRG), Goldman Sachs (GS), W.R. Berkley (WRB), Agnico-Eagle Mines (AEM) are all in or near buy zones. So are Samsara (IOT), Arista Networks (ANET), TransMedics (TMDX), Tenet Healthcare (THC), Waste Connections (WCN) and MercadoLibre (MELI).
Nvidia stock and Agnico-Eagle Mines are on Leaderboard. Palantir stock, MercadoLibre, Fortinet, Intuitive Surgical, Samara, W.R. Berkley, TransMedics and Waste Connections are all on the IBD 50 list. MercadoLibre, Arista Networks and GE stock are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures edged up vs. fair value. S&P 500 futures tilted higher and Nasdaq 100 futures lost a fraction.
The 10-year Treasury yield fell to 3.95%. Crude oil futures rose slightly.
China consumer prices rose 0.5% in July vs. a year earlier, slightly more than expected. Producer prices fell 0.8%, a slightly smaller decline than expected. The data ease deflation fears somewhat.
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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Key Earnings
ELF Beauty earnings and sales beat Q1 views easily. But the budget cosmetics maker, which has repeatedly raised guidance in its long run, guided slightly lower for the full year, despite the Q1 beat. Shares plunged early Friday. ELF stock rose 3.4% to 187.95 on Thursday, moving toward its 50-day line, rebounding from below the 200-day line early Monday.
Trade Desk (TTD) beat Q2 views. TTD stock popped, moving toward a test of its 50-day line.
Sweetgreen (SG) skyrocketed more than 20%. on the restaurant’s strong results and outlook
SoundHound AI (SOUN) reported a wider-than-expected loss but a 54% revenue gain edged past views. Shares fell slightly in premarket trade after big swings late Thursday. SOUN stock surged 21.2% to 5.21 on Thursday, back above its 50-day line.
Nvidia has a stake in SoundHound AI, which uses some Nvidia tech.
Meanwhile, Taiwan Semiconductor reported July sales jumped nearly 45% vs. a year earlier, fueled by AI chip demand. TSMC makes chips for Nvidia, Advanced Micro Devices (AMD), Apple (AAPL) and many others. TSM stock climbed modestly, back toward its 50-day line.
Nvidia rose slightly before the open, well below its 21-day and 50-day lines.
Stock Market Rally
The stock market rally had a powerful session, rebounding as jobless claims data eased recession fears.
The Dow Jones Industrial Average popped 1.8% in Thursday’s stock market trading, closing a hair above its 50-day line. The S&P 500 index gained 2.3%. The Nasdaq composite surged 2.9%. The small-cap Russell 2000 popped 2.4%, near the 50-day.
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 1.8%, retaking its 50-day line.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) gained 2.7%.
Thursday marked Day three of a stock market rally attempt. That means a follow-through day can occur to confirm the new uptrend. Look for a strong price gain of 1% or more on one or more of the major indexes in higher volume than the prior session.
For now, it’s still a market correction. The key indexes are still down for the week, albeit way off Monday morning’s lows.
U.S. crude oil prices rose 1.3% to $76.19 a barrel, up 4.5% in three sessions.
The 10-year Treasury yield rose three basis points to almost 4%, continuing to rebound from Monday morning’s 52-week low of 3.67%.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) popped 3.1%. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 3.3%, with Palantir stock, Samsara and Fortinet all members. The VanEck Vectors Semiconductor ETF (SMH) soared 6.4%. Nvidia stock, the leading member, rebounded 6.1% on Thursday, but is still down 2.1% for the week. TSM stock is also a big SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) leapt 4.6% and ARK Genomics ETF (ARKG) 3.9%.
SPDR S&P Metals & Mining ETF (XME) gained 2.25% and the Global X U.S. Infrastructure Development ETF (PAVE) advanced 2.5%. SPDR S&P Homebuilders ETF (XHB) climbed 1.8%. The Energy Select SPDR ETF (XLE) was up 2.15%.
The Health Care Select Sector SPDR Fund (XLV) rose 2.2%, with Intuitive Surgical a holding. The Industrial Select Sector SPDR Fund (XLI) added 2.3%, with GE stock a major component. The Financial Select SPDR ETF (XLF) rebounded 1.6%, with Goldman stock a notable holding.
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Stocks To Watch
Spotify stock, Palantir, Goldman Sachs, W.R. Berkley, Agnico-Eagle Mines, Waste Connections, Intuitive Surgical, Tenet Healthcare, TransMedics and MercadoLibre are in buy zones or arguably actionable.
Meta Platforms, GE Aerospace, Arista Networks and IOT stock have reclaimed the 50-day lines and are near buy points. Fortinet stock could forge a handle after gapping up within its base.
These stocks have relative strength lines that are rising or at least holding up, with a few such as Palantir or Intuitive Surgical stock at 52-week highs.
These stocks hail from a variety of different sectors. A few, notably Palantir stock and Samsara, are volatile, so investors need to understand that going in.
Market Rally Analysis
The stock market rally attempt regained momentum Thursday, but hasn’t proved anything yet.
An FTD would send a strong signal that a new uptrend is underway.
Aggressive traders could start making pilot positions, but be ready to quickly step out. For the most part, investors should be waiting for a follow-through day to confirm the new uptrend. Even in that scenario, investors should gradually add exposure.
When it is time to act, you want to be ready. Build up you watchlists, far beyond the 15 stocks discussed here.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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