Dow Jones futures rose barely overnight, together with S&P 500 futures and Nasdaq futures. Salesforce.com (CRM) headlined one other busy night of software and other earnings reports. Early Thursday, the Fed’s favorite inflation gauge and an OPEC+ meeting will keep investors busy, with the Tesla Cybertruck event shortly before the close.
X
The stock market rally slashed solid early gains Wednesday at the same time as Treasury bond yields continued to fall solidly. The Nasdaq and S&P 500, which got here very near 2023 highs soon after the open, closed barely lower.
Workday (WDAY) earnings buoyed plenty of software plays, including CRM stock.
Software makers Salesforce, Nutanix (NTNX), Snowflake (SNOW), Synopsys (SNPS) reported late Wednesday, together with Pure Storage (PSTG) and Five Below (FIVE).
Salesforce, Nutanix and SNOW stock were big winners late. Synopsys rose modestly and and FIVE stock edged higher. Pure Storage plunged.
Investors may even turn to Thursday’s Tesla (TSLA) Cybertruck delivery event, with TSLA stock reversing lower from a buy point Wednesday.
CRM stock is on the IBD Leaderboard watchlist. SNPS stock is on IBD Long-Term Leaders. Synopsys is on the IBD 50 list as well.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value, with CRM stock lifting blue chips. S&P 500 futures advanced 0.1% and Nasdaq 100 futures climbed 0.2%.
Crude oil futures edged lower.
Early Thursday, the OPEC+ meeting of OPEC and key allies equivalent to Russia is anticipated to increase current production cuts, with some probability that members will expand their reductions.
Overnight, the official China manufacturing index edged down 0.1 point to 49.4 in November, below views for 49.7. Readings below 50 signal contraction.
Keep in mind that overnight motion in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the subsequent regular stock market session.
PCE Inflation Report
The PCE price index is anticipated to rise just 0.1% in October, with the core CPE price index up a modest 0.2%. PCE inflation should cool to three.1% from September’s 3.4%. Core PCE inflation should slow to three.5% from 3.7%.
In recent days, Fed officials, even hawks, have grown more confident that inflation will come under control. Markets have ruled out further Fed rate hikes and are pricing in rate cuts, perhaps as soon as March 2024.
A stronger-than-expected PCE inflation report could ward off Fed rate cut bets.
The Commerce Department will release the PCE inflation data is an element of the monthly income and spending report at 8:30 a.m. ET. At the identical time, the Labor Department will release weekly jobless data. Those figures also can be necessary.
On Wednesday, the Fed’s beige book report said economic growth has slowed, with consumers curbing spending and labor markets easing somewhat.
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Stock Market Rally
The stock market rally opened with solid gains, with the S&P 500 and Nasdaq getting very near their 2023 highs from July. But the foremost indexes soon got here well off early highs, together with many growth stocks.
The Dow Jones Industrial Average rise a fraction in Wednesday’s stock market trading. The S&P 500 index dipped 0.1%. The Nasdaq composite fell 0.2% after jumping 1% some half-hour into the trading session.
A number of the weakness in the foremost indexes reflected an off day for the megacaps. Meta Platforms (META) fell 2% and Google-parent Alphabet (GOOGL) 1.6%. Microsoft (MSFT) and Tesla stock lost about 1% while Amazon.com (AMZN) and Apple (AAPL) dipped 0.5%. Nvidia (NVDA) was the one Magnificent Seven stock to shut higher, edging up 0.7%.
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.4%, outpacing the S&P 500.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) gained 0.6%, hitting its best levels since early August. The Nasdaq 100 slipped 0.1%.
The small-cap Russell 2000 climbed 0.6%, but hit resistance on the 200-day line.
U.S. crude oil prices rose 1.9% to $77.86 a barrel.
The ten-year Treasury yield fell 6.5 basis points to 4.27%, the bottom since Sept. 14. The ten-year yield has tumbled 21 basis points to this point this week. The 2-year Treasury yield, more closely tied to Fed policy, has plunged 31 basis points this week to 4.645%.
A possible Fed shift toward rate cuts is driving yields lower, but more recently concerns about economic growth slowing an excessive amount of within the months ahead, just Q3’s powerful GDP growth.
That may very well be one reason why this week’s big drop in Treasury yields is not pushing up stocks the best way they did earlier within the month. The market rally also may very well be due for a pullback, with various sentiment gauges at or near excessive levels. Lower bond yields could also be propping up a drained rally.
Still, while Thursday’s stock market motion wasn’t great, the foremost indexes still added to November’s big gains.
ETFs
Amongst growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 1.6%. CRM stock is a significant IGV holding, with Nutanix also within the ETF. The VanEck Vectors Semiconductor ETF (SMH) gained 0.9%. SNPS stock is in each IGV and SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) climbed 0.4%. Tesla stock continues to be a significant holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) inched up 0.1% and SPDR S&P Homebuilders ETF (XHB) popped 1%. The Energy Select SPDR ETF (XLE) fell 0.75% and the Health Care Select Sector SPDR Fund (XLV) closed fractionally higher.
The Industrial Select Sector SPDR Fund (XLI) was up 0.4%.
The Financial Select SPDR ETF (XLF) advanced 0.7%. The SPDR S&P Regional Banking ETF (KRE) jumped 2.1%. Bank stocks are getting a lift from Treasury yields falling and becoming less inverted.
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Key Earnings
CRM stock rose in overnight motion as Salesforce earnings topped and the business software giant guided up on EPS. Q3 sales and revenue guidance was in line. Salesforce stock popped 2.4% to 230.35 on Wednesday, clearing an early entry from a pseudo-handle near 226. CRM stock has an official buy point of 238.22.
NTNX stock rose solidly in prolonged trade as Nutanix earnings and guidance topped consensus. Shares gained 2.6% to 41.56 on Wednesday, hitting a two-year high. Nutanix stock is prolonged from a Sept. 1 gap-up breakout following fiscal Q4 results.
SNOW stock jumped overnight as Snowflake earnings comfortably beat and the information analytics firm guided up for Q4 revenue. Shares climbed 2.2% on Wednesday to 175.32, working on the appropriate side of a cup base. Snowflake stock has a 193.94 buy point, in response to MarketSmith evaluation.
SNPS stock rose modestly in prolonged motion after Synopsys earnings and sales barely exceeded forecasts. The chip and electronics design software giant rose 1.6% to $552.46 on Wednesday, hitting a record high.
PSTG stock plunged in overnight trade after Pure Storage earnings beat views but the information storage firm guided sharply lower for Q4. Shares jumped 5.8% to 37.97 on Wednesday as rival NetApp (NTAP) surged on its quarterly results. Pure Storage stock has a 38.19 cup-with-handle buy point.
FIVE stock tilted higher late after Five Below earnings barely beat and the teenager and tween discounter gave bullish same-store guidance for the vacation Q4. Shares fell 1.8% to 188.06 on Wednesday, holding above the 200-day line. Five Below stock has a 209.12 buy point from a double-bottom base going back to early April, but is getting near a downward-sloping trendline.
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Tesla Cybertruck Event
The Tesla Cybertruck event will kick off at 3 p.m. ET on Thursday, an hour before the market close. Numerous unknowns. Will Tesla hand over any Cybertrucks to actual customers? What are the costs and specs? How quickly will production ramp up, and can or not it’s a moneymaker anytime soon?
Tesla stock fell 1.05% on Wednesday to 244.14. Shares reached 252.75 intraday, hitting resistance at a downward-sloping trendline that might function an early entry. The official TSLA stock buy point is 278.98 from a double-bottom base.
What To Do Now
Even for lively traders, plenty of the cash is made within the sitting. Investors must have added substantial exposure following the Nov. 1-2 follow-through days. A lot of those are still doing well. After a gradual stream of shopping for opportunities in the primary three weeks of November, the number has slowed significantly.
Investors could add somewhat more exposure, take some gains, or somewhat of each, but largely standing pat makes plenty of sense.
A market pullback, versus the nudging-higher pause over the past several days, would create plenty of buying opportunities. But that hasn’t happened yet.
Keep working in your watchlists, scanning for leading stocks in a wide range of sectors.
Read The Big Picture each day to remain in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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