Dow Jones futures, along with S&P 500 futures and Nasdaq futures, will open on Sunday evening. Warren Buffett’s Berkshire Hathaway (BRKB) reported a significant increase in operating profit on Saturday. The stock market rally had its best week of 2023, as Treasury yields fell due to weak economic data, comments from Fed chief Jerome Powell, and a slowdown in Treasury debt issuance. The Nasdaq had a follow-through day on Wednesday, with the S&P 500 and Dow Jones confirming the rally on Thursday. Many stocks are showing buy signals, making it a good time for investors to increase exposure, but with caution. The market still faces resistance points.
One key stock to watch is Nvidia (NVDA), which reclaimed the 50-day moving average on Friday and is approaching a buy point. Lululemon Athletica (LULU), Shopify (SHOP), DraftKings (DKNG), Zscaler (ZS), and NetEase (NTES) are stocks that are either in or near buy zones. Tesla (TSLA) rebounded from its lows but faced resistance at key levels on Friday. Cathie Wood’s Ark Invest ETFs hold notable positions in Tesla, Shopify, and DraftKings. Nvidia stock is on IBD Leaderboard, and DKNG stock joined the list recently. SHOP stock is on the Leaderboard watchlist, ZS stock is on SwingTrader, and LULU stock and DraftKings are on the IBD 50. DraftKings was highlighted as Friday’s IBD Stock Of The Day. The embedded video in this article provides a detailed analysis of the bullish weekly action and discusses DraftKings stock, Zscaler, and NVDA.
Berkshire Earnings
Warren Buffett’s Berkshire Hathaway reported a 41% increase in third-quarter operating profit to $10.8 billion. The conglomerate’s insurance businesses performed well, while the utilities, energy, and railroad businesses experienced profit declines. After-tax operating earnings rose 42% to about $7,436 per class A share, surpassing the FactSet consensus of $6,540. Berkshire held a record $157.24 billion in cash, up from $147.4 billion as of June 30. Warren Buffett continued to reduce equity holdings, selling a net $5 billion in Q3 and bringing the year-to-date total to about $23 billion. Berkshire bought back $1.1 billion of its stock in Q3, compared to $1.4 billion in Q2. The total buybacks for the year so far amount to $7 billion. BRKB stock rose 6.1% last week to reach 351.81, bouncing back from the 200-day line to test the 50-day. Shares are currently forming a flat base with a 373.34 buy point. Apple stock is Berkshire’s largest equity holding by a wide margin. Shares declined in the third quarter but rose 5% last week, holding above the 50-day line despite a dip on Friday following Apple’s disappointing earnings and guidance.
Dow Jones Futures Today
Dow Jones futures, S&P 500 futures, and Nasdaq 100 futures will open at 6 p.m. ET on Sunday. However, it’s important to note that overnight action in futures doesn’t always translate into actual trading in the regular stock market session.
Stock Market Rally
The stock market rally had a strong week, with major indexes rebounding from multi-month lows. The Dow Jones Industrial Average rose 5.1%, the S&P 500 jumped 5.85%, and the Nasdaq composite surged 6.6%, marking their best weeks since early November 2022. All three indexes confirmed the new rally with follow-through days, achieving their best weekly gains in months. While they cleared their 50-day lines on Friday, it wasn’t a decisive breakout. Market breadth was very strong, with advancing stocks outnumbering declining stocks and new highs surpassing new lows for the first time in over a month. The small-cap Russell 2000 had its best week in three years, soaring 7.6% after hitting a three-year low. ETFs like RSP and QQEW also performed well, moving closer to their 50-day lines but remaining below the 200-day. The 10-year Treasury yield dropped 29 basis points to 4.56%, and U.S. crude oil futures fell 5.9% to $80.51 a barrel.
Market Rally Analysis
The major indexes made a significant turnaround this week, with more stocks flashing buy signals from various sectors. While the Nasdaq’s follow-through day was encouraging, market breadth wasn’t impressive, and other key indexes were still below their 200-day lines. However, by the end of the week, all major indexes were above their 50-day lines. The decline in Treasury yields has been a major catalyst for the new rally, similar to how rising yields drove the previous three-month market slide. With the major indexes just above their 50-day lines after a strong run, a pause in the market wouldn’t be surprising, especially if Treasury yields stabilize or rebound. The Dow Jones tested a trendline from the start of the downtrend, and the Nasdaq and S&P 500 breaking their downtrends would provide stronger evidence of a sustainable market rally.
ETFs
IGV and SMH, which include top holdings like Nvidia, regained their 50-day lines. ARKK and ARKG, focused on speculative story stocks, saw significant gains. XME, XHB, XLE, XLV, XLI, XLF, and KRE also performed well.
Best Chinese Stocks To Watch Now
Nvidia stock experienced a brief dip below recent lows on Tuesday but rebounded strongly, rising 11.1% for the week. It cleared the 50-day line on Friday and has a double-bottom buy point of 476.09. LULU stock rebounded from the 50-day line to retake its buy point of 406.94. SHOP stock had a 22% gap up on strong earnings, surpassing its buy point of 67.60. DKNG stock jumped 16.5% following positive earnings and cleared the 50-day line. ZS stock rose 6.5% and provided a buying opportunity with Friday’s bounce in higher volume. NTES stock cleared a buy point of 110.82 and has rebounded from just below the 50-day line. However, it is looking extended from the 50-day line.
