Dow futures fell early Friday, along with S&P 500 futures and especially Nasdaq futures, as real estate woes in China offset falling Treasury yields.
Bitcoin fell Thursday night after news broke that SpaceX had sold all of its holdings. Cryptocurrencies traded relatively flat after the sell-off. Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session. AMAT stock rose slightly before the open after Applied Materials Inc.’s earnings and revenue comfortably beat opinions Thursday night. The chip equipment giant also led the way higher. AMAT stock fell 0.5% to 137.59 on Thursday, after falling below its 50-day line recently. ROST stock jumped overnight, indicating a breakout, after ROST Stores topped earnings views and headed slightly higher. Shares fell 1.9 percent to 113.06 Thursday. Ross stock was flirting with a 115.48 cup buy point handle. DE fell modestly in pre-market trading after Deere beat quarterly sentiment, threatening a dip below its 50-day line. DE stock fell slightly on Thursday.
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XPEV stock fell early Friday after reporting a larger-than-expected loss in the second quarter while revenue fell sharply. XPeng expects deliveries to jump to nearly 40,000 in the third quarter from 23,205 in the second quarter.
Chinese e-commerce play vape shop (VIP) posted stronger-than-expected earnings, but VIPS stock fell sharply. Stocks had recently slipped below the 50-day line, although they rebounded on Thursday.
XPEV and Vipshop shares fall in part amid broader China woes.
while, Palo Alto Networks (Banu) loomed on Friday night. The post-closing earnings reports are highly unusual, and the cybersecurity giant offered no explanation. PANW stock fell Thursday to its worst level since late May.
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Stock market Thursday
The stock market closed near session lows again.
The Dow Jones Industrial Average fell 0.8% in stock market trading Thursday. The S&P 500 also lost 0.8%. The Nasdaq Composite slipped 1.2%. Small cap Russell 2000 fell 1.15%.
The 10-year Treasury yield rose 5 basis points, to 4.31%. On the day, the return was 4.328%, down from the 15-year high of 4.331% it hit last October. It is already the highest close since November 2007.
US crude oil prices rose 1.3% to $80.39 a barrel, after falling in three sessions. Copper futures rose 0.9%.
Exchange Traded Funds
Among the ETFs, the Innovator IBD 50 ETF (fifty) decreased by 2.3%. iShares Expanded Technology and Software ETF (IGV) gave up 1.5%. VanEck Vectors Semiconductor Corporation (SMH) decreased by 0.7%. AMAT stock is a notable SMH stock, with Nvidia at number one.
Stocks with a more speculative story mirror the ARK Innovation ETF (ark(down 2.4% and ARK Genomics)ARKG) lost 0.7%.
SPDR S&P Metals & Mining ETF (XME(up 0.2%, while the US Global X Infrastructure Development Fund (ETF)cradle) decreased by 1.5%. American global aircraft (Planes) fell 1.5%. Homebuilders SPDR S&P (XHB) increased by 3.6%, with shares of DHI and holdings of Lennar. Energy Defined Fund SPDR ETF (xle) by 1.2%. SPDR Health Care Sector Selection Fund (XLV) decreased by 0.8%.
SPDR Industry Selection Fund (XLI) fell 0.8%, with DE stock holding the top 10.
SPDR Financial Selection Fund (45) fell 0.5%. SPDR S&P Regional Banking ETF (Creates) was flat.
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Market analysis
Losses continue to accumulate for the main indices and the leading stocks. The bulls don’t get to do much fighting anymore.
The Nasdaq is 3.5% below the 50-day line, with 21 days about to cross below the 50-day mark. The S&P 500 is 50 days off while the Russell 2000 is close to 200 days.
The Dow Jones, which looked strong on Monday, fell below its 50-day line.
The advance/decline line on the Nasdaq has reached a long-term low. The NYSE A/D line eased, but in a more modest form.
Blue chips don’t look good. Some resilient areas yet are cracking, like homebuilders. Lennar, DR Horton and KBH stock are down 5% to 6% and are now decisively below their 50 day lines.
Nvidia stock lost a bit on Thursday but still held most of Monday’s big rally. Ultimate AI stock finished pennies below the 50 day line but mainly finding support. However, Nvidia fell more than 1% on Friday.
Nvidia’s relative superior performance was not enough to support the broader market.
Other AI plays don’t hold up. PLTR stock fell 8.5% and AI stock fell 5.3%. Both broke below new levels after diving through the 50-day lines earlier this week.
Energy games are doing well thanks to higher crude oil prices. Industries, infrastructure and some steel stocks are showing relative strength, even as many have declined modestly.
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What are you doing now
The stock market consolidated losses against losses. Investors need to take action, trimming exposure as recent buys turn losses and longer holdings cut gains.
It can be said that the stock market is back on the rebound. But with the Nasdaq significantly below 50 days and Nvidia looming on the horizon, there’s little reason to get excited about one fine day.
Investors may want to use a market bounce as an opportunity to exit positions.
However, when the strong uptrend resumes, many stocks will provide buying opportunities. So you want to be ready. Keep working on the watchlists, focusing on stocks that show relative strength.
Read the big picture every day to stay in sync with market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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