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Futures

The Fluctuations of Major Stock Indexes and Key Stocks on Friday

2024-11-15

The Dow Jones Industrial Average and other significant stock indexes witnessed a downward trend on Friday. This reaction came in response to the mixed retail sales data. Early on, Nvidia (NVDA) and Tesla (TSLA) emerged as the early movers in the stock market.

After the Opening Bell: Dow and S&P's Decline

Once the opening bell rang, the Dow Jones Industrial Average dropped by 0.5%, and the S&P 500 suffered a loss of 0.8%. In morning trading, the tech-heavy Nasdaq composite also traded down by 1.4%. These declines indicated a bearish sentiment in the market.

Chip Giant Nvidia's Performance

Chip giant Nvidia held near recent highs on Thursday but moved down by 2.2% on Friday. It is scheduled to report earnings next week, and at least five research firms raised their price targets on Nvidia stock on Thursday. This shows the market's anticipation and attention towards Nvidia.

Tesla's Volatile Movement

Tesla rose by 2.1% on Friday but was still close to the week's lows. Shares had tumbled nearly 6% on Thursday, erasing the entire week's gains. Such volatility highlights the uncertainty and dynamic nature of the stock market.

Retail Sales Data and Its Impact

Early Friday, the Commerce Department reported that retail sales rose by 0.4% in October, exceeding the 0.3% Econoday estimate. However, retail sales excluding vehicles climbed only by 0.1%, falling short of the 0.3% estimate. And when excluding vehicles and gas, sales rose by 0.1%, which was below the expected 0.4% increase. These details provide insights into the specific aspects of retail sales and their influence on the stock market.

Key Earnings Movers

Among the key earnings movers on Friday morning were Alibaba (BABA) and Applied Materials (AMAT). Alibaba, the Chinese e-commerce giant, reported fiscal second-quarter earnings that beat estimates despite lower-than-expected sales. However, its stock declined nearly 3% in morning trading. Applied Materials, on the other hand, tumbled more than 7% after providing a lower-than-expected sales outlook for the current quarter.

Dow Jones Components in Focus

Among the Dow Jones components, Amazon.com (AMZN), Apple (AAPL), Microsoft (MSFT), and Salesforce (CRM) were making notable moves. Salesforce and Broadcom featured in the Stocks Near A Buy Zone column. There were no new stocks on IBD MarketSurge’s “Breaking Out Today” list due to the market weakness. Investors can look for potential breakouts on the “Near Pivot” list or refer to other IBD Stock Lists like IBD 50, Big Cap 20, and Stocks Near A Buy Zone.

Software Leaders and Their Positions

Dow Jones software leader Salesforce continued to hold just off its new highs, still extended beyond a 318.71 buy point, according to MarketSurge pattern recognition. Shares dropped 0.5% on Friday. Outside the Dow Jones index, artificial intelligence giant Broadcom is searching for support around its 50-day line, as it holds near a 186.42 alternative entry. Broadcom shares lost 1.9% on Friday.

Other Stocks in Buy Zones

These are four stocks in or near buy zones in today's stock market:- Ferrari (RACE) with a 498.23 flat base buy point.- Costco Wholesale (COST) at a 923.83 flat base buy point.- Broadcom (AVGO) with a 186.42 handle entry.- Deckers Brands (DECK) having a 172.57 handle entry.

Magnificent Seven Stocks

Among the Magnificent Seven stocks, Alphabet (GOOGL) fell 1.4% in morning trading. It is trying to top a 182.02 buy point in a cup with handle. Meta Platforms (META) is trading near a flat base’s 602.95 buy point and dropped 1.7% on Friday. Among Dow Jones components in the Magnificent Seven, Amazon stock reversed from new highs on Thursday and fell 2.7% on Friday. Apple shares rebounded above their 50-day line on Thursday but declined 0.9% on Friday morning. Microsoft shares slipped 1.4% on Friday morning and is moving back above its 50-day line, a key level to watch.Be sure to follow Scott Lehtonen on X at @IBD_SLehtonen for more on growth stocks, the Dow Jones Industrial Average, and the stock market today.

On Friday, U.S. stock futures were indicating another day of losses as investors digested the message from Fed Chair Jerome Powell. Powell's remarks suggested that the central bank might not be overly aggressive in pursuing rate cuts. This development has had a significant impact on the market, with various indices showing declines. The Dow Jones Industrial Average futures fell by 204 points, or 0.5%, reaching 43697. The S&P 500 futures dropped 38 points, or 0.6%, settling at 5940. And the Nasdaq-100 futures decreased 188 points, or 0.9%, standing at 20824.

Thursday's Market Performance

On Thursday, the Dow Jones Industrial Average witnessed a decline of 207 points, or 0.47%, settling at 43751. The S&P 500 also experienced a setback, falling 36 points, or 0.6%, to 5949. Additionally, the Nasdaq Composite dropped 123 points, or 0.64%, reaching 19108. These figures highlight the volatility and uncertainty in the market.

Analysis of Fed's Stance

Powell's statement on Thursday that the Fed would approach rate decisions "carefully" due to the economy's strength has sparked much discussion. Analysts at DWS Investment have raised questions about whether this was based solely on the latest incoming macro data or if it was a precautionary statement ahead of January 20th. This ambiguity has added to the market's unease and has led investors to closely monitor economic indicators and corporate earnings.

Highlight of Friday's Economics Calendar

Retail sales data is set to be the highlight of Friday's economic calendar. Investors are eagerly awaiting these figures as they provide insights into the health of the consumer sector. Additionally, Nvidia's results next week are also expected to have a significant impact on the market. The anticipation surrounding these events has added to the market's volatility.

Impact of 13-F Filings

The release of 13-F filings of major investors has also been moving markets. Domino's Pizza, for instance, saw a significant jump of 8% after Warren Buffett's Berkshire Hathaway disclosed that it had bought stock in the pizza chain. Such filings often provide clues about the investment strategies of major players and can have a ripple effect on the market.In conclusion, the current market situation is characterized by uncertainty and volatility. Investors are closely watching economic data, corporate earnings, and Fed policy decisions as they navigate these challenging times. The performance of various indices and individual stocks will continue to be closely monitored as the market unfolds.

After a negative session on Wall Street, futures experienced significant losses. The previously witnessed risk-on rally from last week began to cool, and investors started to second-guess their bets on a December rate cut. This uncertainty was further exacerbated by the long-term outlook for inflation in the face of a potential second Donald Trump presidency. Trump is widely expected to implement more inflationary policies, adding to the complexity of the economic landscape.

Key Factors Influencing Futures

Fed's Stance and Data

Fed Chair Jerome Powell's warning on Thursday played a crucial role. He emphasized that the strength of the U.S. economy would allow the Fed to take its time in deciding on interest rate cuts. While painting a positive picture of the economy, Powell also flagged caution over sticky inflation. This was followed by data showing that producer price index inflation grew more than expected in October, preceded by a consumer price index print that indicated inflation remained sticky. The combination of Powell's comments and the data led traders to sharply pare their bets on a December rate cut. CME Fedwatch showed that traders were pricing in a 51.7% chance of rates remaining unchanged and a 48.3% chance of a cut.

Trump's Policies and Their Impact

Trump's protectionist stance on trade and immigration is expected to keep inflation underpinned in the coming years. This has added to the uncertainty surrounding the long-term outlook for rates. As a result, Wall Street fell from record highs on this notion, while the dollar and Treasury yields rose sharply.

Aftermarket Movers

Among major aftermarket movers, Applied Materials Inc (NASDAQ:AMAT) fell nearly 6% after its quarterly earnings missed some street expectations. Slowing revenue from China was a key point of contention. On the other hand, Domino's Pizza Inc (NYSE:DPZ) surged over 9% after Berkshire Hathaway (NYSE:BRKa) disclosed a stake in the firm. Pool Corporation (NASDAQ:POOL) also rose 5.6% after Berkshire disclosed a stake. These movements highlight the diverse reactions of different companies in the market.