Finance
Dow Jones Futures: Powell Expects Best Market Week in 2024; Nvidia, AI Stocks Near Buy Points
Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. Fed chief Jerome Powell’s annual Jackson Hole speech is shaping up to be a big one.
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Can this cybersecurity stock benefit from the CrowdStrike debacle? Future earnings may tell.
Palo Alto Networks (PANW), Cava group (CAVA) And TJX Cos. (TJX) are important income from the shares around buying areas.
The stock market rally had its best week of 2024, supported by positive inflation and economic data. The major indexes held a follow-up day on Tuesday, followed by a subsequent FTD on Thursday.
Nvidia (NVDA) took a huge step last week and offered early entry. Metaplatforms (META) And Arista Networks (ANET), AI is also playing, have forged new bases and are about to buy points.
In the meantime, Tesla (TSLA) made a strong move last week, regaining important levels. But the graph is flawed.
Nvidia stock is on Leader boardwith Cava on the Leaderboard Watchlist. Cava shares are listed on SwingTrader. Nvidia and Arista stocks are on the list IBD50.
Fed Chief Powell in Jackson Hole
Federal Reserve Chief Jerome Powell will speak at the Kansas City Fed’s Jackson Hole Economic Policy Symposium at 10 a.m. ET. The keynote address will cover the economic outlook.
Powell will likely send signals that the central bank is about to begin gradual Fed rate cuts. With recent economic data once again favoring a soft landing scenario, markets are pricing in a quarter-point rate cut on September 18, by 75-100 basis points for the full year.
If Powell surprises and hints that Fed rate cuts are not a foregone conclusion, the market reaction could be significant.
Dow Jones futures today
Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.
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Stock market rally
The stock market rally continued its comeback from the August 5 low, with the Dow, S&P 500 and Nasdaq all posting their best weekly gains of 2024.
The Dow Jones Industrial Average rose 2.9% in last week’s stock trading. The S&P 500 index rose 3.9%. The Nasdaq composite rose 5.3%. The small-cap Russell 2000 posted a gain of 2.9%.
All of these indexes are above their 50-day moving averages.
A market pause would not be a surprise. After strong gains from the August 5 low, a pause or pullback would be normal from a technical perspective. On the news front, markets may falter ahead of Fed chief Powell’s Jackson Hole speech. Nvidia’s earnings will follow soon.
A pause in the indexes would also cause many stocks to fill in their bases and forge handles.
The yield on ten-year government bonds fell by five basis points to 3.89%, while the yield on two-year government bonds rose by 10 basis points to 4.06%. Recession fears have subsided, slowing the Fed’s aggressive rate cuts, but cooling inflation continues the general downward trend in long-term Treasury yields.
U.S. crude futures fell 19 cents to $76.65 a barrel last week.
ETFs
Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) rose 2.4% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose by 3.7%. The VanEck Vectors Semiconductor ETF (SMH) sprinted 9.7%. Nvidia stock is No. 1 in SMH.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 6.3% last week and ARK Genomics ETF (ARKG) recovered by 7.1%. Tesla stock is a major holding within Ark Invest’s ETFs, but Meta stock is an even bigger holding. Cathie Wood has also built up a significant stake in Nvidia.
SPDR S&P Metals & Mining ETF (XME) and the SPDR S&P Homebuilders ETF (XHB) improved 2%. The Energy Select SPDR ETF (XLE) gained 1.2% and the Health Care Select Sector SPDR Fund (XLV) rose by 1.9%. The Industrial Select Sector SPDR fund (XLI) recovered by 2.2%. The Financial Select SPDR ETF (XLF) rose by 3.2%.
Time the market with IBD’s ETF market strategy
Palo Alto Earnings
Palo Alto’s earnings will be announced Monday evening. Earnings per share fell by 2%, while revenue growth slowed for the fourth quarter in a row.
PANW rose 0.8% to 334.11 last week and retreated slightly on Friday. That followed the previous week’s 8.5% gain, in an upward reversal. Palo Alto shares have a buy point of 380.84, but investors could use the June 28 high of 345.90 as an early entry.
Palo Alto’s revenue and guidance will be critical to other cybersecurity projects Fortinet (FTNT) And CyberArk software (CYBR) near purchasing points.
TJX Earnings
Earnings for TJX are scheduled for Wednesday, with the discount retailer’s earnings per share and sales growth set to slow for the second quarter in a row. TJX stock has a new flat base with a 115.34 buy point and is up 0.7% last week to 111.45. A strong move outside the 50-day line would allow an early entry.
TJX’s earnings and guidance will be important to discount retailers, including peers Ross Stores (ROST), which is reported on Thursday evening.
Cava income
The Cava earnings will be announced on Thursday evening, with earnings per share declining compared to a year earlier. Traffic and same-store sales are critical. CAVA shares rose 9.6% to 98.96 last week, following the previous week’s big 11% upside gain. The Mediterranean-themed eatery went through a brief consolidation Friday that would one day no longer be a cup base. Investors can still use 98.69 as a buy point, although looming profits increase risks.
Nvidia stock
Nvidia shares rose 18.9% to 124.58, its best weekly gain since May 2023. The AI chip leader climbed back above a $3 trillion market cap.
Shares claimed the 50-day mark late in the week and offered early entry. NVDA stock has an official buy point of 136.15 or 140.76. Keep in mind that Nvidia’s earnings are due on August 28th.
Nvidia stock is No. 1 in the S&P 500 index this year, up 152%.
Meta stock
Meta shares rose 1.9% to 527.42, close to the July 8 record high. The Facebook and Instagram parent now has a cup base with a buy point of 542.81, according to MarketSurge Analysis. Shares had already flashed some early entries recently.
Meta stocks are up 49% in 2024 and are also a leading stock in the S&P 500 this year.
Arista Stock
Arista shares rose 5.4% to 353.89, up from the 50-day line, albeit on light volume. The networking giant was the first notable AI hardware to regain its 50 days after the market sell-off in early August. ANET stock is now in consolidation with a buy point of 376.50. Investors could use a trendline as an early entry, using Thursday’s high of 358.68 as a specific trigger.
Arista shares are up 50% this year.
Tesla shares
Shares of Tesla rose 8.1% to 216.12 last week, regaining the 21-day, 50-day and 200-day lines and breaking a steep downtrend. Investors could have used that as an early entry, but largely because these are TSLA stocks. The EV giant could certainly make another run, but many other stocks have better charts and stronger fundamentals right now.
What to do now
The stock market rally has made a major comeback and provided a number of buying opportunities over the past week. Investors should take advantage of this and gradually increase their exposure as long as the market continues to function well.
The market may be “due for a pause or a pullback,” especially with Fed chief Jerome Powell on the horizon, so you don’t want to suddenly go from lightly to fully invested.
Take the weekend to build your watchlists and there are plenty of stocks to keep an eye on.
While growth stocks like Nvidia and Meta are taking shape again, defensive growth and even traditional defensive measures are still performing well. In addition to chips and software, the medical sector in general, aerospace, banks, insurers and gold stocks are all showing strength.
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