Dow Jones futures saw a slight increase overnight, while S&P 500 futures and Nasdaq futures experienced a slight decline. Earnings reports from Apple (AAPL) were the highlight of the day, with the October jobs report expected to be released early Friday morning.
The stock market rally continued to build momentum on Thursday, with follow-through days for the S&P 500 and Dow Jones after the Nasdaq confirmed an uptrend on Wednesday. Both indexes surpassed resistance levels, and the Dow Jones approached key levels as Treasury yields continued to fall. Market breadth was much better on Thursday, with many stocks below their 200-day moving averages performing well. Eli Lilly (LLY), Weatherford (WFRD), Palo Alto Networks (PANW), Palantir Technologies (PLTR), Lululemon Athletica (LULU), and Ferrari (RACE) all showed buy signals on Thursday.
Late in the day, AAPL stock fell. While Apple’s earnings exceeded expectations, sales declined, and the company also provided lower guidance for holiday-quarter revenue.
A federal jury found Sam Bankman-Fried, the founder of the failed FTX cryptocurrency exchange, guilty on all seven charges of fraud and conspiracy on Thursday night. Bankman-Fried faces a potential prison sentence of up to 115 years.
Several other companies, including Kratos Defense & Security Solutions (KTOS), DraftKings (DKNG), Yelp (YELP), Coinbase Global (COIN), Carvana (CVNA), Atlassian (TEAM), Cloudflare (NET), and Fortinet (FTNT), also reported late on Thursday. Winners of the day included DKNG and YELP stock, while FTNT stock and other software makers like Cloudflare and TEAM stock were losers. COIN stock fell after beating expectations, but trading volume continued to decline.
Dow Jones futures rose 0.15% compared to fair value, while S&P 500 futures edged lower and Nasdaq 100 futures sank 0.2%. Apple stock is a component of the Dow Jones, S&P 500, and Nasdaq. The October jobs report is expected to impact Dow futures and Treasury yields before the market opens, with the 10-year Treasury yield currently at 4.66%.
The report on October’s jobs data is scheduled to be released at 8:30 a.m. ET on Friday. Economists predict that nonfarm payrolls will increase by 179,000, lower than September’s 336,000. The UAW strike is expected to have affected the number of net jobs during the month. The jobless rate is expected to remain at 3.8%, with average hourly earnings climbing 0.3% and a year-over-year gain of 4%. Strong October employment data could lead to a negative reaction in the market, following a week of mixed-to-weak economic reports that have caused Treasury yields to decline and fueled the current stock market rally.
On Thursday, the stock market rally had another strong session, with positive earnings and falling Treasury yields providing support. The Dow Jones Industrial Average rose 1.7%, gaining 564 points, while the S&P 500 index jumped 1.9% and the Nasdaq composite climbed 1.8%. The Dow Jones and S&P 500 both demonstrated follow-through days on the fourth day of their rally attempts, confirming the new uptrend. The Nasdaq surpassed its 21-day line, while the S&P 500 reclaimed the 200-day and 21-day averages. The Dow Jones cleared its 200-day average and is approaching its 50-day. Market breadth was decisively bullish, with the Russell 2000 and the Invesco S&P 500 Equal Weight ETF (RSP) both making significant gains. Stocks such as Meta Platforms, ServiceNow, Roku, DoorDash, Shopify, and Ferrari showed promising earnings within bases, potentially providing new buying opportunities.
U.S. crude oil prices rose by 2.5% to $82.46 a barrel, while the 10-year Treasury yield fell by 12 basis points to 4.67%. Several ETFs experienced gains, including the iShares Expanded Tech-Software Sector ETF (IGV), the VanEck Vectors Semiconductor ETF (SMH), the ARK Innovation ETF (ARKK), the ARK Genomics ETF (ARKG), the SPDR S&P Metals & Mining ETF (XME), the SPDR S&P Homebuilders ETF (XHB), the Energy Select SPDR ETF (XLE), the Health Care Select Sector SPDR Fund (XLV), the Industrial Select Sector SPDR Fund (XLI), the Financial Select SPDR ETF (XLF), and the SPDR S&P Regional Banking ETF (KRE). ARK Invest’s ETFs hold significant positions in COIN stock and DKNG stock.
Apple’s earnings for fiscal Q4 slightly exceeded expectations, with sales also surpassing targets. However, revenue declined for the fourth consecutive quarter compared to the previous year, mainly due to challenges in the Chinese market. On the conference call, Apple executives indicated that first-quarter sales for the holiday season would be similar to the results of Q4, falling short of Wall Street estimates.
Eli Lilly stock jumped 4.7% to 580.29 on Thursday, rising above the 50-day average. WFRD stock increased by 4% to 99.11, surpassing a buy point of 97.88 from a cup-with-handle base. PANW stock climbed 2.25% to 250.36, breaking a short downward trendline. PLTR stock surged by 20% to 17.97, surpassing the 50-day average and briefly breaking a trendline. LULU stock increased by 2.1% to 403.50, breaking a short-term downtrend. Eli Lilly, WFRD, and Palo Alto Networks are included in various IBD lists.
