Title: Stock Market Rally Gains Momentum as Dow Jones Futures Open Sunday Evening
Subtitle: Warren Buffett’s Berkshire Hathaway to Report Third-Quarter Earnings on Thursday
Date: [Current Date]
The stock market rally experienced its best week of 2023, fueled by tumbling Treasury yields, weak economic data, and comments from Federal Reserve Chief Jerome Powell. Dow Jones futures, along with S&P 500 futures and Nasdaq futures, are set to open Sunday evening, indicating a positive start to the week.
On Wednesday, the Nasdaq staged a follow-through day, signaling a potential turnaround in the market. The S&P 500 and Dow Jones confirmed the rally with further confirmation on Thursday. Several stocks are flashing buy signals, prompting investors to consider increasing their exposure to the market cautiously.
One standout stock to watch is Nvidia (NVDA). The AI chip leader reclaimed its 50-day moving average on Friday, nearing a potential buy point. Other stocks in or near buy zones include Lululemon Athletica (LULU), Shopify (SHOP), DraftKings (DKNG), Zscaler (ZS), and NetEase (NTES).
Notably, Tesla (TSLA) rebounded from multimonth lows but faced resistance at key levels on Friday. Tesla stock, along with Shopify and DraftKings, are notable holdings in Cathie Wood’s Ark Invest ETFs. Nvidia stock is on IBD Leaderboard, while DKNG stock joined the list on Friday. SHOP stock is on the Leaderboard watchlist, and ZS stock is on SwingTrader. LULU stock is included in the IBD 50. Additionally, DraftKings was recognized as Friday’s IBD Stock Of The Day.
Warren Buffett’s Berkshire Hathaway (BRKB) is set to report its third-quarter earnings on Thursday. Investors are eager to learn about the company’s stock buybacks, cash position, and overall equity activity during the quarter. Berkshire stock saw a 6.1% increase last week, bouncing back from its 200-day line and approaching a potential buy point.
Apple stock (AAPL) remains Berkshire’s largest equity holding, despite experiencing significant declines in the third quarter. However, the stock rose 5% last week, holding the 50-day line, despite mixed earnings and guidance.
Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, will open at 6 p.m. ET on Sunday. It’s essential to note that overnight movements in futures don’t necessarily reflect actual trading in the next regular stock market session.
The stock market rally had a remarkable week, with the Dow Jones Industrial Average surging 5.1%, the S&P 500 index jumping 5.85%, and the Nasdaq Composite soaring 6.6%. All three indexes cleared their 50-day lines on Friday, although not convincingly. Market breadth was strong, with advancers outnumbering decliners and new highs outpacing new lows.
The major indexes have experienced a significant turnaround this week, with a growing number of stocks indicating potential buy signals. The decline in Treasury yields has been instrumental in driving the new market rally, similar to how soaring yields contributed to the three-month market slide.
However, analysts caution that a market pause wouldn’t be surprising given the recent strong rally and its proximity to the 50-day lines. Furthermore, the market’s staying power will only be confirmed if the Nasdaq and S&P 500 break their downtrends.
Various ETFs saw significant gains during the rally, including the iShares Expanded Tech-Software Sector ETF (IGV) with a 6.3% increase, the VanEck Vectors Semiconductor ETF (SMH) surging 8.1%, and the ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) skyrocketing 18.6% and 17.1%, respectively. Other ETFs, such as SPDR S&P Metals & Mining ETF (XME), SPDR S&P Homebuilders ETF (XHB), Energy Select SPDR ETF (XLE), Health Care Select Sector SPDR Fund (XLV), Industrial Select Sector SPDR Fund (XLI), Financial Select SPDR ETF (XLF), and SPDR S&P Regional Banking ETF (KRE) also experienced gains.
Investors are urged to watch closely for the performance of Nvidia stock as a bellwether for the market rally and the AI industry. Additionally, stocks near buy points, such as Lululemon Athletica, Shopify, DraftKings, Zscaler, and NetEase, continue to attract attention from investors.
Tesla stock has faced uncertainties, with its status as a growth company coming into question. Operating margins resembling those of traditional automakers, the bull case for TSLA stock relies on high-risk bets on self-driving technology, robotics, and AI.
As the market rally gains momentum, investors should carefully consider their next moves and evaluate the potential risks and rewards of individual stocks.
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Note: The information provided in this article is based on current market conditions and is subject to change. It is not financial advice.