As Dow Jones futures and other major stocks declined on Friday night following the Labor Department’s robust December employment report, companies faced a setback in their recent winning streak. Palantir Technologies (AI), a leading player in artificial intelligence, saw a drop in its stock following an analyst’s downgrade.
Dow Jones futures were down 0.25% compared to fair value before the opening bell, while the S&P 500 lost 0.3%. Nasdaq 100 futures, which focus on technology, also experienced a 0.35% decline during day trading.
The Invesco QQQ Trust, tracking the Nasdaq 100, fell by 0.4% among U.S. exchange-traded funds, while the SPDR S&P 500 ETF dropped by 0.3%.
After the jobs report release on Thursday, the 10-year Treasury yield rose to 4.06% on Friday, marking its highest level since December 13. Furthermore, West Texas Intermediate futures surged by nearly 2% on Friday night, indicating a recovery in fuel prices from the losses seen on Thursday. WTI futures climbed to over $73 per barrel.
Impactful Jobs Report and Palantir’s Decline
Palantir stock plummeted over 4% on Friday after Jefferies downgraded the company from a hold to a sell rating, with a revised price target of 13, down from 18.
Jefferies analyst Brent Thill noted in a client statement that they had underestimated the decline in Palantir’s commercial and government sectors, leading to a slower-than-expected demand recovery that could hinder growth through 2024.
On Friday, the Labor Department’s December jobs report revealed a gain of 216,000 jobs, surpassing the expected 158,000. This increase was higher than the 199,000 jobs added in November.
Additionally, job numbers for October were revised downward from 150,000 to 105,000, and for November from 199,000 to 173,000. The unemployment rate held steady at 3.7%, defying expectations of a rise to 3.8%.
The stock market outlook for 2024 suggests that a soft landing may not yield the anticipated benefits.
Dow Jones Faces Decline
While the Dow Jones Industrial Average saw gains on Thursday, the S&P 500 extended its losing streak to four sessions with a 0.3% decline. The Nasdaq composite, heavily weighted, dropped by nearly 0.6%, marking five consecutive days of losses.
There is a possibility that both the S&P and Nasdaq may end their nine-week winning streak unless a significant turnaround occurs. The Nasdaq was down by 3.3%, while the S&P showed a 1.7% decline by Thursday’s end. The Dow was down by 0.7% through Thursday.
According to the Big Picture column on Thursday, IBD suggests maintaining an exposure level of 60% to 80%, as the market experiences a pullback at the start of 2024. Several leading companies breaking below the 21-day exponential moving average signal a short-term selling opportunity.
Given the current stock market conditions, it is crucial to stay informed by reading IBD’s The Big Picture column. Adjustments based on IBD’s latest exposure levels are recommended to navigate changing market dynamics effectively.
Top Companies to Watch and Consider Buying
During the ongoing market rally, key stocks worth monitoring include the Magnificent Seven players Alphabet (GOOGL), Celsius (CELH), Netflix (NFLX), Snowflake (SNOW), Amgen (AMGN), Caterpillar (CAT), and Visa (V).
Amgen Shows Growth, Dow Jones Reports
Leading pharmaceutical company Amgen extended its breakout gains on Tuesday, surpassing the official buy point of 288.46 within a cup base, with a further 0.8% increase on Thursday. The stock remains marginally extended beyond the 5% buy zone, reaching 302.88 shares, and experienced a minor 0.2% decline early on Friday.
Heavy machinery manufacturer Caterpillar closed Thursday with a 0.6% gain, remaining approximately 2% below its 293.88 buy trigger. On Friday night, Caterpillar’s stock rose by over 0.6%.
Visa, identified by IBD MarketSmith, continues to be within the buy range above the cup base entry point of 250.06. Visa shares saw a 0.1% decline on Friday.
Google Stock Reaches Critical Levels
Alphabet witnessed a 1.8% decline on Thursday, moving further below the 139.42 buy point within a cup with handle. The stock closed below its 50-day moving average, a significant development to monitor. Early on Friday, Alphabet’s stock dropped by 0.1%.
Netflix recorded a 0.9% increase on Thursday while remaining below the 482.70 buy point from a cup with handle. Friday night saw a 0.3% rise in Netflix’s stock.
Celsius, a leading fitness beverage company, rebounded by 2.15% on Thursday, recovering from significant losses earlier in the week. While this may present a potential entry point, the current market conditions pose challenges. The official buy level stands at 68.95.
Investors eyeing Celsius may consider entry points at 62.99 or a declining trendline. On Friday night, Celsius shares fell by 0.3%.
Snowflake, specializing in artificial intelligence, extended its losses on Thursday, dropping by 0.3% and moving further below the 192.66 buy point within a cup with handle. Early on Friday, Snowflake’s stock declined further.
_Among the top companies to watch in the current market environment, one Dow Jones leader stands out._Business NameSymbolKey ConsiderationsBuy Point TypeCelsius(CELH)68.95ConsolidationCaterpillar(CAT)293.88Cup with handleNetflix(NFLX)482.70Cup with handleSnowflake(SNOW)192.66Cup with handle
IBD Data as of January 4, 2024
Magnificent Seven Companies: Tesla, Nvidia
Shares of Nvidia (NVDA) and Tesla (TSLA) exhibited mixed performance on Friday morning among the Magnificent Seven companies. Tesla shares declined by 0.7%, while NVDA stock saw a 0.5% increase.
Nvidia maintained levels just above the 476.09 entry point of a double-bottom base as Thursday concluded, marking a 0.9% gain. Currently, Nvidia is forming a cup base with a 505.48 buy point, as indicated by IBD Leaderboard. Given recent weakness, a test of the 50-day moving average is plausible.
Tesla, the leading automaker globally, experienced a 0.2% decline on Thursday, extending its losing streak to five sessions. TSLA remains positioned just above the 50-day moving average. Notably, Tesla’s stock features a large double-bottom pattern with a standard buy point of 278.98.
Dow Jones Market Leaders: Microsoft, Apple
Apple (AAPL) and Microsoft (MSFT), both Dow Jones components within the Magnificent Seven, exhibited mixed performance before Friday’s market opening.
On Thursday, Apple traded below its 50-day moving average, registering a 1.2% decline. Additionally, the stock remains below the 192.93 buy point. Friday night saw AAPL decline by 0.5%.
Microsoft’s stock dropped by 0.7% on Thursday but held above the 366.78 cup-base buy point. Monitoring the 50-day moving average will be crucial in upcoming sessions. On Friday night, Microsoft saw a marginal increase of less than 0.1%.
