Dow Jones futures rose barely overnight, along with S&P 500 futures and Nasdaq futures. Salesforce.com (CRM) jumped overnight on earnings, with the Fed’s favorite inflation report on tap.
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The stock market rally rose barely Wednesday following Tuesday’s follow-through day that confirmed the brand latest uptrend. A softer-than-expected ADP Employment Report followed Tuesday’s surprisingly weak job openings data.
Together with Salesforce, fellow software makers CrowdStrike (CRWD), Okta (OKTA) and Veeva Systems (VEEV) also reported, along with Pure Storage (PSTG).
CRM stock and Okta were big winners overnight, indicating buying opportunities. Veeva, Pure Storage and CRWD stock also advanced.
Also overnight, Shopify (SHOP) rose solidly after Amazon announced a deeper integration between the two e-commerce giants. Amazon will launch the Buy with Prime app for Shopify, letting merchants offer shoppers the alternative to buy items using their Prime benefits.
4 “Magnificent Seven” stocks, Tesla (TSLA), Amazon.com (AMZN), Meta Platforms (META) and Apple (AAPL) are all trading near the 50-day line that may offer entries.
META stock is on IBD Leaderboard.
PCE Inflation Report
The Commerce Department will release the July PCE price index, the Fed’s favorite inflation gauge, at 8:30 a.m. ET Thursday.
Economists expect the Personal Consumption Expenditures price index and the core PCE to rise a modest 0.2% vs. June. The final PCE inflation rate is seen climbing to 3.3% from June’s 3%, on account of tougher year-earlier comparisons. The core PCE inflation rate should tick as much as 4.2%.
Fed chief Jerome Powell has said he’s following a supercore inflation reading throughout the report: services prices excluding energy and housing.
Also at 8:30 a.m. ET, the Labor Department will release weekly jobless claims data. That comes ahead of the September jobs report on Friday. It follows the surprisingly weak job openings data on Tuesday and Wednesday’s soft ADP Employment Report.
Dow Jones Futures Today
Dow Jones futures climbed 0.25% vs. fair value, with CRM stock a Dow component. S&P 500 futures advanced 0.1% and Nasdaq 100 futures rose 0.2%.
The PCE inflation report will likely swing Dow futures and Treasury yields before the open.
China factory activity contracted for a fifth straight month in August. The official manufacturing PM came in at 49.7, barely below the break-even level. That was up 0.4 point from July and better than views for 49.4. The nonmanufacturing gauge dipped to 51 vs. 51.5 in July and 53.2 in June.
Bear in mind that overnight motion 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
CRM stock rose solidly in prolonged trade, signaling an entry above the 50-day line, after Salesforce earnings topped Q2 views and the business software giant guided higher. Salesforce rose 1.45% to 215.04 in Wednesday’s regular session. CRM stock has a 238.22 buy point, consistent with MarketSmith evaluation.
CRWD stock tilted higher after initially retreating Wednesday evening. CrowdStrike earnings beat views, with the cybersecurity firm guiding up on EPS. CrowdStrike stock climbed 1.7% to 149.18 on Wednesday, barely below the 21- and 50-day lines. A move above the Aug. 24 high of 155.55 would offer an early entry for CRWD stock in an emerging base.
OKTA stock surged overnight, signaling an early entry after the cybersecurity firm easily beat EPS views. OKTA stock rose 2.4% to 73.57 on Wednesday, bouncing from the 50-day line and retaking the 200-day. A robust move from these levels, perhaps topping the July 31 high of 76.94 would offer an early entry. OKTA stock has a 91.50 buy point.
VEEV stock rose barely late after Veeva earnings barely topped and the life sciences software maker gave mixed guidance. Shares edged down 0.2% on Wednesday to 192.59, still below the 50-day line. Veeva stock has a 211.95 flat-base buy point, but a move above the 50-day could offer an early entry.
PSTG stock climbed barely overnight after Pure Storage barely topped views. Pure Storage stock edged up 0.4% to 36.48 on Wednesday after hitting resistance on the 50-day line. The data storage firm has a flat base with a 39.19 buy point. A move above the Aug. 23 high of 38.49 would offer a moderately early entry.
Stock Market Rally
The stock market rally enjoyed modest gains Wednesday, adding to Tuesday’s big advance.
The Dow Jones Industrial Average rose 0.1% in Wednesday’s stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite advanced 0.5%. The small-cap Russell 2000 gained 0.4%.
U.S. crude oil prices rose 0.6% to $81.63 a barrel. Oil prices are up 3.5% in its five-session win streak.
The ten-year Treasury yield held at 4.12% after tumbling 9 basis points on Tuesday.
ETFs
Amongst growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.6%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.9%. CRM stock is a major IGV holding, with CrowdStrike also a component. The VanEck Vectors Semiconductor ETF (SMH) advanced 0.5%.
Reflecting more-speculative story stocks, the ARK Innovation ETF (ARKK) gained 0.7% and ARK Genomics ETF (ARKG) added 0.8%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) fell 0.3% and the Global X U.S. Infrastructure Development ETF (PAVE) edged up 0.2%. U.S. Global Jets ETF (JETS) descended 0.7%. SPDR S&P Homebuilders ETF (XHB) stepped up 0.9%. The Energy Select SPDR ETF (XLE) moved up 0.5% and the Health Care Select Sector SPDR Fund (XLV) nudged down 0.1%.
The Industrial Select Sector SPDR Fund (XLI) gained 0.45%.
The Financial Select SPDR ETF (XLF) rose a fraction. The SPDR S&P Regional Banking ETF (KRE) fell 0.7%
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Megacaps To Watch
Tesla stock edged down 0.1% to 256.90. That just barely ended a three-day win streak, capped by Tuesday’s 7.7% surge. TSLA stock did close just above a declining 50-day moving average. A move above Tuesday’s high of 260.51 would offer an early entry. Tesla stock has a contemporary base with a 299.29 buy point.
Federal prosecutors and the SEC are investigating a secret Tesla project described internally as a special home for CEO Elon Musk, The Wall Street Journal reported Wednesday evening, citing sources.
Apple stock rose 1.9% to 187.65, reclaiming the 50-day line in only above-average volume. That’s offering an early entry. AAPL stock has a 198.23 flat-base entry. On Tuesday, the Dow Jones tech giant announced it could hold an event on Sept. 12, where it’s expected to unveil the Apple iPhone 15.
Meta stock fell 1% to 295.10, hitting resistance on the 50-day line. A transparent move above the 50-day line would offer an early entry in an emerging consolidation.
AMZN stock edged up 0.1% to 135.07, just above the 21- and 50-day lines. Unlike the alternative three megacaps here, Amazon stock has been pulling back toward the 50-day line, where it’s found support. A solid bounce here would offer an entry. Amazon stock has a temporary consolidation that may turn right right into a flat base. Investors could view that as a handle on a yearlong consolidation.
AMZN stock was little modified overnight, despite the Shopify news.
Market Rally Evaluation
The stock market rally had a modest session after Tuesday’s game-changing advance. That’s just effective. If a confirmed uptrend goes to fail, it often falters quickly. In its place, the important thing indexes held their 50-day lines Wednesday and moved slightly bit higher.
The Russell 2000, which rebounded from a 200-day line test on Friday, ran as much as the touch its 50-day before closing barely below that level.
Meanwhile, some more stocks offered buying opportunities. Tuesday offered only a handful of leading stocks flashing entries, mostly within the expansion space. On Wednesday, just just a few more growth names tripped buy signals, but so did stocks from a wide selection of sectors.
Visa (V) broke out while Uber Technologies (UBER), SLB (SLB), Atkore (ATKR), Oceaneering (OII,) Toll Brothers (TOL), Duolingo (DUOL), Valaris (VAL) and Howmet Aerospace (HWM) flashed entries.
A wide range of other names are organising. So if this market rally shows more strength, expect a hefty variety of purchasing for opportunities from a wide selection of sectors.
Declining Treasury yields on weak economic data have been key to the market rally’s revival. So Thursday’s PCE inflation report and Friday’s jobs report loom large for Treasury yields and the stock market rally.
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What To Do Now
Investors could and doubtless should have bought something on Tuesday’s follow-through day. They could have added some more exposure on Wednesday.
Achieve this recurrently since the market rally pulls you in. The huge economic reports to complete the week raise the risks for a pullback, especially given how soft labor data have fueled this week’s advance.
But immediately, it’s a confirmed uptrend with leading stocks doing well. Have your watchlists up to date and in a position to take advantage of the proper opportunities.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson for stock market updates and more.
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