The stock market rally had another sideways week, as the Dow Jones, S&P 500 and Nasdaq Composite indexes drifted lower as tight measures continued. Investors are waiting for a flood of themed earnings Microsoft (MSFT), Amazon.com[ticker symb=AMZN]And Meta platforms (meta) and the parent of Google the alphabet (Google).
Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures.
Buying opportunities have not been plentiful, and many have fizzled out or failed. Earnings season will hit in full force next week, providing the potential for the market rally to break loose.
Microsoft, Amazon, Meta and Google are especially important. Microsoft and, arguably, Amazon shares are doable now. Google stock is nearing a buy point while Facebook subsidiary Meta is pulling back after a massive run.
By themselves, they have a significant impact on key indicators. Their feedback on future growth in key markets such as cloud computing, artificial intelligence, e-commerce and PCs will have a significant impact on the technology sector and beyond.
while, First Solar (FSLR), dexcom (DXCM), Mobileye (MBLY), Boeing (Bachelor’s), service now (now), Cloud Flair (network), alignment technique (ALGN), Adel Isaac (Fico), visa (Fifth) And Chipotle Mexican Grill (CMG) are just some of the notable companies that will report next week with stocks in or near overbought areas.
MBLY stock in particular is having an action-packed week, with the IPO lock expiring on Monday followed by earnings on Wednesday.
In the meantime, stay tuned for this weekend’s news Shockwave Medical (SWAV). SWAV stock rose on Friday on the back of a report Boston Scientific (BSX) is considering Shockwave’s takeover offer. But the companies did not say anything.
Microsoft stock is in IBD Long-Term Leaders.
Dow jones futures today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Stock market rise
The stock market rally did not have a significant trend over the past week.
The Dow Jones Industrial Average fell 0.2% in trading last week. The S&P 500 fell 0.1%. The Nasdaq Composite fell 0.4%. Small Capital Russell 2000 rose 0.6%.
The 10-year Treasury yield rose 5 basis points, to 3.57%.
US crude oil futures fell 5.5 percent to $77.87 a barrel last week.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty(up 2.7% last week, while the Innovator IBD Breakout Opportunities ETF)fit) decreased by 0.4%. iShares Expanded Technology and Software ETF (IGV) rose 0.1%, with MSFT leading share. VanEck Vectors Semiconductor Corporation (SMH) slipped 1.5%.
SPDR S&P Metals & Mining ETFs (XME) fell by 4.2% last week. Global Infrastructure Development Fund X US (cradle) rose 0.55%. US Global Gates Foundation ETF (Planes) rose 1.8%. SPDR S&P Homebuilders ETF (XHB) increased by 3.4%. Energy Defined Fund SPDR ETF (xle(Dipped 2.6% and the SPDR Fund)XLV) fell 0.2% after five weekly gains.
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Market rally analysis
The stock market rally continues to move sideways, with major indexes slightly lower. The S&P 500 and the Nasdaq Composite both have tight four-week patterns. The NASDAQ tested support at the 21-day line and the 12,000 level late in the week.
More broadly, the major indices are stuck in a range between the highs of early 2023 and the 50-day moving averages.
Market breadth remains weak, especially on the Nasdaq. It doesn’t break down anymore, but it doesn’t get much better either.
Invesco S&P 500 Equal Weight Fund (RSP) finished partially higher last week, firmly holding the 50-day line.
Homebuilders are looking strong, with more reports this coming week. Medical product companies also pioneered, including shares of Boston Scientific and SWAV.
Chip stocks have been falling all month, with the SMH ETF closing just below the 50-day line on Friday. This may be a healthy pause, but it’s been hard on chip investors. Other tech names struggled last week over IT spending concerns.
Microsoft, Google, Amazon and Meta will provide some insights into their broader IT spending plans. Their spending plans and growth projections will be important to major suppliers, such as Arista Networks.
At some point, the market rally will break through its recent range, for better or worse. Earnings season over the next few weeks, combined with key economic data and the Federal Reserve meeting in early May, could provide a catalyst for a decisive rally or sell-off. Or they can provide a large number of mixed signals that add more volatility to a range bound market.
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What are you doing now
The market rally has done nothing wrong, but it is not doing anything special at the moment.
Sideways movement and short-term rallies, combined with sector turnover, are not a great environment for buying stocks, especially on traditional breakouts. By the time the stock makes a strong move, and buy signals flash, there’s a good chance the stock will turn back lower.
In fact, it’s probably a positive that the market rally and blue-chip stocks didn’t take off before earnings from Microsoft, Google, and hundreds of others.
Now that earnings season is coming into full swing, it’s not only important to know which holdings have on-click results, but also which competitors, suppliers, and customers are reporting.
If the market reacts well to earnings, a number of buying opportunities may arrive. Until then, investors should gradually increase exposure. Specific equity risks or a broader market reversal of gains could remain elevated.
But be prepared to jump on early entries. Update watchlists. Keep track of or are making a large list of stocks that are doing well, with a particular focus on stocks right around your buy points.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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