As anticipation built for the forthcoming U.S. jobs report scheduled for Friday, the Dow Jones Industrial Average concluded Thursday on a positive note. Advanced Micro Devices (AMD) gained traction due to heightened interest in its artificial intelligence initiatives, while Nvidia (NVDA) also demonstrated progress. Simultaneously, a trio of stocks affiliated with billionaire investor Bill Ackman are poised for listing, with Google parent Alphabet (GOOGL) among them.
There was minimal turbulence in the market, but notable names garnered attention as discussions unfolded. Ralph Lauren (RL), Warren Buffett-backed Snowflake (SNOW), and the Leaderboard Watchlist entity Booking (BKNG) all edged closer to their respective buy thresholds.
Preceding the Jobs Report
Initial jobless claims for the week ending December 2 rose to 220,000, marking a 1,000 uptick from the previous period, with regular employment figures expected on Friday. This figure closely aligned with projections. Continuing claims for the week ending November 25 totaled 1.861 million, reflecting a decrease of 64,000 from the prior period.
The upcoming release of nonfarm payroll data for November by the Labor Department on Friday stands as the focal point amidst this week’s flurry of employment data. Analysts anticipate the creation of 190,000 new jobs, a notable uptick from the 150,000 positions generated in October.
Investors are keen on indications of labor market weakness to potentially spur Federal Reserve interest rate cuts.
In a client advisory, Oanda senior market analyst Craig Erlam emphasized the significance of the impending jobs report, particularly the wage component following three consecutive months of 0.2% growth. A sustained upward trend in wages could align more closely with 2% inflation levels, potentially influencing policymakers towards earlier rate adjustments despite the persisting tight labor market conditions.
Treasury yields exhibited mixed movements at the close, with the two-year yield declining by 2 basis points to 4.59% and the 10-year yield rising by 3 basis points to 4.15%. Notably, the yield curve remained inverted.
Nasdaq Gains Propel Small Caps
Among the major indices, the tech-centric Nasdaq outperformed, registering a substantial gain of 1.4%. Sirius XM (SIRI) emerged as one of the standout performers, surging by 4.9%.
The S&P 500 halted a three-session decline, closing with a nearly 0.8% gain. Noteworthy advancements included Kenvue (KVUE), which soared by almost 9% amidst a legal discussion on the potential link between prenatal Tylenol exposure and autism in children.
Across the S&P 500 sectors, communication services and utilities demonstrated robust movements, while energy lagged behind.
Small caps also witnessed positive momentum, with the Russell 2000 posting an 0.8% increase. Conversely, the Innovator IBD 50 ETF (FFTY) saw a modest 0.1% uptick, causing growth stocks to trail.
Dow Jones Highlights Walgreens and Apple
The Dow Jones Industrial Average managed to secure a 63-point gain, equivalent to a 0.2% increase, albeit trailing behind other major indices.
Walgreens Boots Alliance (WBA) stole the spotlight on the index with a remarkable 7.2% surge, surpassing the critical 50-day moving average.
Another notable performer on the Dow Jones was Apple (AAPL), with the tech behemoth closing with a 1% rise. AAPL stock currently trades above a key buy threshold at 192.93.
Nvidia and AMD Showcase Strength
Advanced Micro Devices witnessed a bullish upturn following its recent foray into artificial intelligence, a favored investment trend of the year.
AMD stock surged by 9.9%, clearing a cup-with-handle entry point at 122.11. It now hovers just above the 5% gain threshold.
The introduction of the Instinct MI300X, AMD’s latest offering in the AI market to rival Nvidia (NVDA), sparked investor enthusiasm.
Furthermore, AMD stock received a boost after Meta Platforms (META) and Microsoft (MSFT) announced their intentions to acquire the company’s new chip.
Nvidia, a prominent name on the elite IBD Leaderboard list, also experienced an uptick, closing the year with a 2.4% gain and maintaining a position above the crucial 50-day moving average.
Bill Ackman’s Holdings Approach Purchase Points
Despite recent controversies surrounding Bill Ackman’s remarks on anti-Jewish sentiments in schools, some of his holdings are gaining traction.
Alphabet, one of Ackman’s Pershing Square Capital Management assets, is nearing or already within buy thresholds. MarketSmith analysis indicates that GOOGL shares are approaching a cup-with-handle entry point at 139.42.
Alphabet’s stock received a boost following the introduction of its new Gemini AI model, touted to outperform OpenAI’s GPT-3.5. The company’s stock has surged by 54% in 2023, with a 5.3% pullback observed on Thursday.
Chipotle Mexican Grill (CMG), another Ackman holding, sits comfortably within a buy zone above the cup base entry of 2,175.01, boasting an impressive IBD Composite Rating of 97 out of 99.
The parent company of Burger King, Restaurant Brands International (QSR), represents the third Ackman stock nearing a buy threshold, positioned above the cup-with-handle entry at 71.50. With an EPS grade of 64 out of 99, QSR’s earnings performance remains subdued.
Potential Entries Outside the Dow Jones
Several other stocks are inching closer to buy points amid positive market activity. MarketSmith data indicates that Booking is approaching a combination entry point of 3,251.71, surpassing a 3,207.32 alternative handle entry. As the largest online travel company globally, Booking continues to exhibit strong performance.
Snowflake is on the cusp of a cup-base entry at 193.94, potentially transitioning to a handle formation. With an impressive IBD Composite Rating of 96, Snowflake maintains robust overall performance, endorsed by investment guru Warren Buffett.
Lastly, Ralph Lauren nears a weekly cup bottom entry at 135.75, aligning closely with a standard table entry at 125.69, placing it within the buy zone. RL shares rank among the top 14% in terms of cost efficiency over the past year.
