Dow Jones futures will begin trading Sunday evening, along with S&P 500 futures and Nasdaq futures, with much of the focus on Federal Reserve Chairman Jerome Powell’s annual Jackson Hole speech.
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Could this cybersecurity stock benefit from CrowdStrike’s debacle? Future earnings may tell us.
Palo Alto Networks (Pan W), Kava Group (Kava) and TJX Cos. (Tx) is the key return you can expect on a stock around a buy area.
The stock market rally was fuelled by positive inflation and economic data, marking its best week in 2024. Major stock indexes followed suit on Tuesday and FTD on Thursday.
NVIDIA (NVDA) made a big move last week, offering early entry. Meta Platform (Meta) and Arista Networks (Annette), AI play is also building new bases and getting closer to buying points.
meanwhile, Tesla (TSLA) rebounded from key levels last week and showed strong performance, but the chart is flawed.
Nvidia’s stock price LeaderboardCava is on the Leaderboard watchlist. Cava shares are listed on SwingTrader. Nvidia and Arista shares are IBD50.
Fed Chairman Powell at Jackson Hole
Federal Reserve Chairman Jerome Powell is scheduled to speak at the Kansas City Fed’s Jackson Hole Economic Policy Symposium at 10 a.m. ET. His keynote address will cover the economic outlook.
Chairman Powell will likely signal that the Fed is ready to begin gradually lowering rates. Recent economic data again supports a soft landing scenario, and markets are pricing in a quarter-point cut on September 18 and 75-100 basis points for the full year.
Market reaction could be big if Chairman Powell unexpectedly suggests that a Fed rate cut is not set in stone.
Dow Jones Futures Today
Dow Jones futures will begin trading at 6pm ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that overnight movements in Dow futures or any other stocks do not necessarily translate into actual trading in the next regular stock market session.
IBD experts break down major stocks and markets on IBD Live.
Stock market rise
The stock market rally continued its recovery from the Aug. 5 lows, with the Dow, S&P 500 and Nasdaq all posting their biggest weekly gains in 2024.
The Dow Jones Industrial Average rose 2.9% in the stock market last week. The S&P 500 rose 3.9%. The Nasdaq Composite surged 5.3%. The Russell 2000, a small-cap index, rose 2.9%.
All these indices are above their 50-day moving averages.
It would not be surprising if the market paused. After such a big rally from the August 5 low, a pause or pullback would be normal from a technical perspective. On the news front, the market may hesitate ahead of Fed Chairman Powell’s Jackson Hole speech, followed by Nvidia earnings shortly.
If the index were to pause, many stocks would hit bottom and strengthen their price movements.
The 10-year Treasury yield fell 5 basis points to 3.89%, while the 2-year Treasury yield rose 10 basis points to 4.06%. Recession fears have eased and expectations of aggressive rate cuts by the Fed have faded, but the overall downward trend in long-term Treasury yields continues as inflation subsides.
U.S. crude futures fell 19 cents last week to $76.65 a barrel.
ETF
Among growth ETFs, the Innovator IBD 50 ETF (50 …) rose 2.4% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 3.7%. The VanEck Vectors Semiconductor ETF (SMH) surged 9.7%. Nvidia shares are SMH’s largest holding.
Reflecting more speculative story stocks, the ARK Innovation ETF (arc) rose 6.3% last week, while the ARK Genomics ETF (arc) rebounded 7.1%. Tesla shares are a big holding across the Ark Invest ETF, but Meta is an even bigger holding. Cathie Wood also has a significant stake in Nvidia.
SPDR S&P Metals & Mining ETF (XME) and SPDR S&P Home Builders ETF (translation) rose 2%. The Energy Select SPDR ETF (XL) rose 1.2%, while the Health Care Select Sector SPDR Fund (Chapter 45) rose 1.9%. The Industrial Select Sector SPDR Fund (Article 41) rose 2.2%. The Financial Select SPDR ETF (XLF) rose 3.2%.
Timing the Market with IBD’s ETF Market Strategy
Palo Alto Revenue
Palo Alto is scheduled to report earnings on Monday night. EPS is expected to fall 2% and revenue growth will mark a fourth consecutive quarter of slowing.
PANW rose 0.8% last week to 334.11 and then fell slightly on Friday, reversing an uptrend following an 8.5% gain in the previous week. Palo Alto shares have a buy point at 380.84, but investors could use the June 28 high of 345.90 as an opportunity to enter early.
Palo Alto’s earnings and guidance will be key for other cybersecurity companies. Fortinet (FTNT) and CyberArk Software (cyber-) nearby purchase points.
TJX Earnings
TJX is scheduled to report earnings early Wednesday morning, when the off-price retailer is expected to report slowing EPS and sales growth for a second straight quarter. TJX shares are trading at a new flat with a buy point of 115.34, having risen 0.7% to 111.45 last week. A strong move from the 50-day line could provide an opportunity for early entry.
TJX’s earnings and guidance will be important for discount retailers, including its peers. Ross Store (lost) reported Thursday night.
Cava Revenue
Cava’s earnings are scheduled for Thursday night, with EPS expected to decline year over year. Foot traffic and same-store sales will be key. Cava shares rose 9.6% to 98.96 after a strong 11% upside reversal last week. The Mediterranean-themed restaurant cleared a short-term correction on Friday that was a day behind a cup base. Investors can still use 98.69 as a buy point, but the looming earnings release increases risk.
Nvidia stock
Nvidia shares rose 18.9% to 124.58, their highest weekly close since May 2023. The AI chip leader’s market capitalization has once again surpassed $3 trillion.
The stock reclaimed its 50-day line over the weekend, providing an opportunity for early entry. Official buy points for NVDA stock are 136.15 or 140.76. Note that Nvidia is due to report earnings on August 28th.
Nvidia’s stock has risen 152% this year, making it the No. 1 stock on the S&P 500 index.
MetaStock
Meta shares rose 1.9% to 527.42, near the all-time high hit on July 8. Meta, the parent company of Facebook and Instagram, currently has a cup base with a buy point of 542.81. MarketSurge AnalysisThe stock has already seen some early entries recently.
Meta’s stock price is up 49% in 2024 and it’s also the top-performing stock on the S&P 500 this year.
Arista stock
Arista shares rose 5.4% to 353.89, up from their 50-day line, but on light trading volume. The networking giant became the first notable AI hardware stock to reclaim its 50-day line after the market sell-off in early August. ANET shares are currently stabilizing with a buy point at 376.50. Investors can use trendlines as early entry levers, with Thursday’s high of 358.68 as a specific trigger.
Arista’s shares have risen 50% this year.
Tesla stock
Tesla shares rose 8.1% last week to $216.12, reclaiming their 21-, 50-, and 200-day lines and breaking a steep downward trend. Investors could have used this as an opportunity to get in early, but that’s mainly because this is TSLA stock. The EV giant can definitely go even higher, but many other stocks have better looking charts and stronger fundamentals right now.
What to do now
The stock market rally has rebounded strongly, creating many buying opportunities over the last week. Investors should take advantage of this opportunity and gradually increase their investments as long as the market remains strong.
I would avoid jumping from small investments to all-in investments too quickly, especially as the market may be going through a “period” of pause or pullback with the upcoming appointment of Fed Chairman Jerome Powell.
Use the weekend to create your watchlist, there are plenty of stocks to keep an eye on.
While growth stocks like Nvidia and Meta are experiencing a resurgence, defensive growth stocks and traditional defensive stocks are still doing well. Besides semiconductors and software, general healthcare, aerospace, banking, insurance and gold stocks are all strong.
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