With the impending release of the November employment report on Friday night, minimal changes were observed in Dow Jones futures, the S&P 500, and the Nasdaq overnight. Following the market close, Broadcom (LULU) emerged as the top earner.
The stock market witnessed a notable advancement led by prominent tech giants as it rebounded on Thursday, with all major indices nearing their annual peaks.
Advanced Micro Devices (AMD) and Google parent company Alphabet (GOOGL) experienced a surge on Thursday in response to their significant artificial intelligence announcements. These initiatives are poised to enhance their competitive stance against Microsoft (MSFT) and Nvidia (NVDA) respectively.
While Google toyed with an earlier entry point, the AMD stock surged past various buying thresholds. Similarly, Nvidia’s stock saw an uptick around crucial levels, while Microsoft’s stock entered a buy zone.
Among the megacap companies, Apple (AAPL), Amazon.com (AMZN), and Meta Platforms (META) reclaimed their buy points alongside AMD. Meanwhile, Tesla (TSLA) continued to distance itself from the 50-day mark, nearing another potential buy point.
Noteworthy mentions on various investment platforms include Amazon, Meta, Microsoft, and Nvidia on the IBD Leaderboard, Apple and Nvidia on SwingTrader, and Microsoft on the IBD Long-Term Leaders list. The IBD 50 features the stocks of Microsoft, Meta Platforms, Nvidia, Google, and LULU, with AMD being highlighted as the IBD Stock Of The Day on Thursday.
Dow Jones Futures Update
Dow Jones futures saw a modest 0.1% increase from fair value. Conversely, the S&P 500 and Nasdaq 100 futures experienced slight fluctuations in opposite directions.
The 10-year Treasury yield climbed to 4.17%, while crude oil futures rose by 1%.
The Labor Department is scheduled to release the November employment report at 8:30 a.m. ET, which is expected to influence Dow Jones futures and Treasury yields. Investors are keenly awaiting the report’s insights as the focus shifts from inflation concerns to broader economic challenges.
It’s important to note that trading activity in Dow futures and other markets during non-standard hours may not necessarily reflect actual market trends during regular trading hours.
Earnings Reports and Market Movements
Thursday’s earnings reports from Broadcom, Lululemon, Smartsheet (SMAR), and Guidewire Software (GWRE) had varying impacts on the market.
Broadcom witnessed a decline in its stock value as its earnings slightly missed Q4 projections, despite issuing optimistic fiscal 2024 guidance and raising its dividend by 14%. The stock rebounded by 2.1% to 922.26 on Thursday, showing signs of recovery after a recent downturn, albeit still below the 50-day mark.
Lululemon exceeded earnings expectations, leading to a quiet decline in LULU stock after hours, although the company’s holiday quarter profit and sales guidance fell below consensus. The stock inched up by 0.9% to 464.67 on Thursday, albeit significantly distant from a viable purchase range.
Smartsheet’s stock surged following better-than-expected earnings results, with a 0.3% increase to 44.89 on Thursday. The stock’s key buy point stands at 52.81, with Tuesday’s peak of 45.96 serving as a potential entry point for investors.
Guidewire Software saw minimal movement in its stock price despite surpassing earnings estimates, as it provided a downbeat guidance for the current quarter. The healthcare software provider’s stock rose by 0.8% to 98.85 on Thursday, finding support near the 21-day mark and hovering within the buy range of 95.88 from a recent consolidation.
Preview of Employment Report
Economists project a rise of 180,000 in November nonfarm payrolls, up from October’s 150,000 which was impacted by the UAW car strike.
The unemployment rate is expected to remain at 3.9%, with hourly earnings anticipated to increase by 0.3%, while the annual gain is likely to moderate to 4%.
Recent employment data, including job openings and the ADP Employment Report, have shown mixed results, with some indicators pointing to a challenging job market.
Stock Market Rally
Tech giants led a broad market rally on Thursday, with the Dow Jones Industrial Average up by 0.2%, the S&P 500 rising by 0.8%, and AMD stock emerging as a standout performer. The Nasdaq composite surged by 1.4%, while the Russell 2000 small-cap index climbed by 0.9%.
While AMD and Google experienced gains driven by AI-related news, other AI-centric stocks like C3.ai (AI) faced setbacks due to weak revenue and guidance.
In the absence of AMD and Nvidia, travel stocks like Booking Holdings (BKNG) showed strength, despite U.S. crude oil prices edging lower.
The 10-year Treasury yield remained steady at three-month highs, while ETFs like iShares Expanded Tech-Software Sector (IGV), VanEck Vector Semiconductor (SMH), and ARK Innovation (ARKK) witnessed varied movements.
Key Stock Movements
AMD stock surged by 9.9% to 128.37, reclaiming a cup-with-handle buy point and clearing a weekly handle-buy point. The company’s new AI product line aims to rival Nvidia, although the stock closed slightly below the 21-day mark.
Nvidia’s stock rose by 2.4% to 465.96, bouncing back from a recent low but still below the 21-day mark. The stock maintains an active double-bottom buy point at 476.09.
Google’s stock soared by 5.3% to 136.93, closing in on a cup-with-handle buy point at 139.42. The company’s Gemini big language model launch is seen as a significant development to compete with industry peers.
Microsoft’s stock increased by 0.6% to 370.95, positioning just below a cup-base buy point of 366.78 and showing consolidation after a recent uptrend.
Megacap Updates
Apple’s stock rose by 1% to 194.27, reaching a $3 trillion valuation and reclaiming a cup-with-handle buy point at 192.93.
Amazon’s stock increased by 1% to 146.88, surpassing the 21-day mark and re-establishing a buy level at 145.86.
Meta’s stock surged by 2.9% to 326.59, recovering from a recent low and approaching a buy point at 362.20.
Tesla’s stock rose by 1.35% to 242.60, marking a third consecutive gain and nearing a trendline entry point below 250.
Conclusion and Recommendations
While major indices are near annual highs, recent sideways movements suggest caution. Investors should exercise restraint and monitor stock movements closely, considering potential buying opportunities that may arise. Building watchlists and staying informed about emerging trends will be crucial for making informed investment decisions.
