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Dow Jones Futures: Apple Holds, Amazon join Megacap Meltdown; What to do now


Dow Jones futures fell lower overnight, while futures on the S&P 500 and Nasdaq fell slightly as Amazon stock became the latest megacap earnings crunch. Apple (AAPL) was little changed despite cautious comments amid another big night of corporate release.




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The stock market rallied for a mixed session, with the Dow Jones rising on earnings reports and the Nasdaq sinking in Meta . Platform (META) results and instructions. However, the major indexes all closed at the lows during or near the session. That comes despite Treasury yields falling below key levels after third-quarter GDP showed US economic growth topping out while inflation cooled significantly.

Besides Apple and Amazon.com (AMZN), Vertex Pharmaceuticals (VRTX), The first solar energy (FSLR), Texas Roadhouse (TXRH), DexCom (DXCM) and T Mobile (TMUS) was also reported on Thursday night.

Apple stock rose and fell overnight. The iPhone giant beat earnings and sales forecasts slightly, but signaled slower growth ahead.

Amazon stock plunges on weak cloud revenue and terrible metrics in Q4. Vertex stock rallied overnight on strong third-quarter results. FSLR shares fell due to poor Q3 results. Shares of Texas Roadhouse fell in late trading despite beating the views. T-Mobile shares rose on mixed Q3 results. DexCom stock rose on high earnings.

Chevron (CVX) and Exxon Mobil (XOM) will be due early Friday. CVX stock closed just below the buy point and XOM stock is in the buy zone. But both have increased significantly in the past few weeks.

TXRH stock is on IBD Rankings, with stock DXCM, an earnings option will play for the Leaderboard. Vertex and XOM shares on IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures fell below fair value, with AAPL stock being a giant blue chip. S&P 500 futures fell 0.6%. Nasdaq 100 futures lost 0.9%, having hit a low on Thursday night.

Remember that action overnight in Dow futures contract and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.


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Rally stock market

The bull market had a mixed session, closing near a session low with the major indexes diverging in earnings.

The Dow Jones Industrial Average rose 0.6% on Thursday stock market trading. The S&P 500 index fell 0.6%. The Nasdaq Composite Index fell 1.6%. The small-cap Russell 2000 rose 0.1%.

The yield on the 10-year Treasury note fell 7 basis points to 3.94%, below the key 4%.

GDP grew at an annual rate of 2.6% in Q3, returning to growth after two quarters of severe decline. That is slightly higher than estimated. However, inflation measures show a faster-than-expected decline. Additionally, the European Central Bank raised interest rates by 75 basis points, as expected, but three members supported the move to cut it by half a point. The post-meeting statement was also a bit less hawkish.

Markets still expect the Fed to raise rates by 75 basis points for its fourth straight meeting next week, although it is no longer a lockout. They see the possibility that the Fed will raise rates by only 50 basis points.

US crude oil prices rose 1.3% to $89.05 per barrel.

ETF

Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) fell 0.4%, while the Innovators IBD Breakthrough Opportunity ETF (BOUT) increased by 0.6%. iShares Expanded Software-Technology Sector ETF (IGV) increased by 0.6%. VanEck Vectors Semiconductor ETF (SMH) decreased by 1.25%.

SPDR S&P Metals & Mining ETF (XME) embedded 0.3%. US Global Jets ETF (JETS) increased by 1.3%. SPDR Select Energy ETF (XLE) rose 0.4%, with XOM and Chevron shares both being giants. SPDR Fund for the Healthcare Sector (XLV) decreased by 0.5%.

Reflecting a more speculative narrative on stocks, the ARK Innovation ETF (ARKK) is partially lost and the ARK Genomics ETF (ARKG) decreased by 1.7%.


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Income statement

Apple’s earnings increased views in the fourth quarter of the previous fiscal year while revenue was slightly lower. Both iPhone and services revenue fell short of the target. Regarding the earnings report, management said it expected growth to decelerate during the Q1 holiday compared to Q4. Apple points to the strong dollar as a gust of wind.

AAPL stock is less volatile, swinging between gains and losses. Apple stock fell just over 3% to 144.80 on Thursday, falling below 21 days after hitting resistance at 50 days earlier in the week.

Apple’s earnings could have an impact on iPhone chipmakers and other suppliers.

Amazon light income beat views while revenue fell, partly due to the weakness of high-margin Amazon Web Services. The e-commerce and cloud-computing giant has warned of fourth-quarter sales. Cloud software development, has been rocked by disappointing cloud growth by Microsoft (MSFT), fell again on Amazon.

AMZN stock fell more than 10% in extended trading, signaling its worst level in more than two years. Shares fell 4.1% to 110.96 on Thursday after falling back below the 21-day mark on Wednesday. Microsoft’s cloud weakness and online advertising woes for Meta and Google weighed heavily on Amazon stock this week.

Vertex Income and revenue topped consensus in Q3. The biotech giant also raised its full-year sales target.

VRTX stock rose continuously overnight. That’s after Vertex stock fell 7.5% in Thursday’s session to 287.89, hovering below 306.05 flat sole buy point and close below its 50-day line.

First Solar reported a larger-than-expected Q3 loss while revenue fell.

FSLR stock has been falling steadily in an extended action, signaling a move below the 50-day line. Shares fell 0.2% to 131.18 on Thursday, holding above the 50-day level after regaining that key level on Wednesday. Enphase Energy (ENPH) income. First Solar stock is consolidating, but needs more time to build the right foundation.

Earnings on T-Mobile topped while revenue fell. The wireless giant added more mobile and broadband customers than expected. TMUS stock rose slightly in overnight trading. Shares fell 0.15% to 140.63 on Thursday. T-Mobile stock is hitting resistance at 142.79 buy points in one double bottom sole.

Texas Roadhouse earnings topped the views modestly. TXRH stock fell slightly in extended trading. Follow MarketSmith Analysis.

DexCom earnings and sales also exceed consensus. DXCM stock surged after many hours, signaling a move to buy zone. Shares fell 1.3% to a close of 101.25. DexCom stock hit the shelves with 105.43 buy points, formed just above the 200-day line and bottom.


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Market aggregation analysis

The stock market rally diverged on Thursday, making it difficult to discern clear patterns. Strong earnings lifted the Dow Jones, while Nasdaq sank as the Meta Platform plunged and other megacap technologies retreated. The S&P 500 also lost ground.

The Dow Jones, although rising, closed near a low for the second straight session. The S&P 500 is hitting resistance at the 50-day line, although it remains above 10 weeks. Nasdaq fell back from about 50 days / 10 weeks and cut the 21-day line.

The gainers led the losers on the NYSE, but trailed on the Nasdaq.

Yields on the 10-year Treasury note fell again on Thursday. Falling yields are a positive for stocks, though that relationship doesn’t hold up every day.

Shares of VRTX and several other pharmaceuticals fell sharply on Thursday without clear news, adding to earnings-based volatility. However, several other healthcare names have shown solid action.

Energy stocks are still doing well, reflecting rising prices. Defensive discount and auto parts retailers are trending strong, along with some restaurant stocks.


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What to do now

The stock market rally is showing volatile actions around key levels, mainly but not based entirely on earnings. It is a difficult environment to trade.

Traders may choose to add a bit more weight here, but may want to wait until the indices calm down and clear key levels.

The market doesn’t give a reason to reduce trading rates in general, but if stocks erase gains, don’t let small losses turn into big ones.

Read Big picture every day to stay in sync with market trends and top stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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