Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures, with key inflation data due Friday morning. Intel (INTC) and Visa (V) reported after hours with two more Dow components, Chevron (CVX) and American Express (AXP), due early Friday. Along with chip-gear maker KLA Corp. (KLAC), that’s five stocks that closed near buy points with earnings due before the opening bell.




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The stock market rally continued to advance Thursday amid a barrage of earnings reports and economic data. The major indexes closed near highs for a fifth straight session and are on the verge of breaking through some major resistance.

Tesla (TSLA) was a big earnings winner, soaring on CEO Elon Musk’s bullish comments about 2023. Fellow megacaps apples (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Nvidia (NVDA), Google parent Alphabets (GOOGL) and Facebook parents Meta Platforms (META) all had solid-to-strong gains. None of these stocks are in position, with only NVDA stock above its 200-day line.

Still, Thursday’s gains were broad-based.

Key Earnings

KLA earnings topped views but the chip-equipment maker guided lower. KLAC stock fell almost 6% after hours. Shares rose 1.45% to 428.76 on Thursday. That was still above a 419.67 handle buy point from a long consolidation, but KLAC stock is set to undercut that on Friday.

Intel earnings fell short and the chip giant guided sharply lower for Q1. INTC stock plunged nearly 10% in extended trade. Shares advanced 1.3% to 30.09 on Thursday. INTC stock is working on a 30.48 cup-with-handle base that mostly formed above the 50-day line, but the chip giant is well below the 200-day line. It’s been a long time since Intel was a true market leader.

Visa earnings topped fiscal Q1 forecasts. V stock rose 1% in overnight action. Shares edged down 0.1% to 224.71 on Thursday following better-than-expected earnings from archrival MasterCard (MA). Visa stock is still in range from a 220.08 buy point.

Chevron earnings were on tap Friday morning, but CVX stock already gapped up 4.9% on Thursday to 187.79, racing above an early entry of 182.65. It’s not far from the official buy point of 189.78 from a flat base. Late Wednesday, the Dow Jones energy giant announced a $75 billion buyback as well as a 6% dividend increase.

AXP stock dipped 0.6% to 155.88 Thursday ahead of earnings, holding above its 200-day line. American Express has a 161.65 buy point from a bottoming base. Investors could use a move above Thursday’s high of 158.23 as an early entry.

PCE Inflation Rate

The December PCE (personal consumption expenditures) price index, the Fed’s favorite inflation gauge, is due out at 8:30 am ET as part of the Commerce Department’s income and spending report. Economists expect the PCE price index to be flat vs. November, with the PCE inflation rate cooling to 5% from 5.5%. Core PCE prices are seen rising 0.3%, with the inflation rate slipping to 4.4% from 4.7%.

Fed chief Jerome Powell recently stated that he’s focusing on core services prices excluding housing.

Thursday’s GDP report showed that core PCE services minus housing rose at a 4.7% annual rate in Q4. The 12-month super-core inflation rate picked up to 4.4% from 4.2%.

Dow Jones Futures Today

Dow Jones futures dipped about 0.1% vs. fair value. S&P 500 futures declined 0.3%. Nasdaq 100 futures fell 0.5%. Intel stock is a Dow Jones, S&P 500 and Nasdaq component, though it doesn’t have as much weight as it once did. Visa, Chevron and AXP stock are Dow Jones S&P 500 components.

The 10-year Treasury yield rose 2 basis points to 3.51%.

Japan and the Netherlands will join US chip export controls vs. China, Bloomberg reported, with details being finalized Thursday night. That could impact Dutch chip-equipment maker ASML (ASML).

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


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Stock Market Rally

The stock market rallied had some morning wobbles, but steam picked up yet again into the close.

The Dow Jones Industrial Average rose 0.6% in Thursday’s stock market trading. The S&P 500 index jumped 1.1%. The Nasdaq composite leapt 1.7%. The small-cap Russell 2000 gained 0.6%.

Apple stock rose 1.5% to its best level in more than a month. Microsoft stock popped 3.1% to 248, cracking the 50-day line after tumbling to 230.90 intraday Wednesday. Google stock advanced 2.4%, Amazon 2.1%. Nvidia climbed 2.5% to its highest price since early May.

US crude oil prices rose 1.1% to $81.01.

The 10-year Treasury yield rose 3 basis points to 3.49%.

ETFs

Among growth exchange traded funds, the Innovator IBD 50 ETF (FFTY) advanced 1.35%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 2.5%, with MSFT stock a major holding. The VanEck Vectors Semiconductor ETF (SMH) advanced 1.8%, with Nvidia stock a major component. Intel and KLAC are also notable SMH holdings.

Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) popped up 2% and ARK Genomics ETF (ARKG) edged up 0.15%. Tesla stock is a major holding across Ark Invest’s ETFs. Cathie Wood’s Ark has been loading up on TSLA stock in recent weeks. Ark Invest also owns a small position in China EV and battery giant BYD (BYDDF).

The SPDR S&P Metals & Mining ETF (XME) rallied 0.8% and the Global X US Infrastructure Development ETF (PAVE) drove 1.9% higher. US Global Jets ETF (JETS) edged down 0.15%. SPDR S&P Homebuilders ETF (XHB) gained 0.3%. The Energy Select SPDR ETF (XLE) jumped 3.2%, with CVX stock a mammoth holding. The Financial Select SPDR ETF (XLF) advanced 0.5%. AXP stock is an XLF component. The Health Care Select Sector SPDR Fund (XLV) nudged 0.2% higher.


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Tesla Stock

Tesla stock gapped 11% higher to 160.27, vaulting above its 50-day and 10-week lines.

Tesla earnings rose 40%, slightly topping lowered views. Revenue grew 37%, missing some estimates and topping others. Tesla’s gross margins fell more than expected, and that was ahead of big price cuts to start 2023. But what sent TSLA stock soaring was the conference call. CEO Elon Musk was bullish, saying production could hit 2 million EVs in 2023. He said orders have roared back in recent weeks. But will that demand be sustained without further price reductions?

Tesla will discuss a new EV at a March 1 event, perhaps a cheaper model that could compete with China’s BYD and others.

Tesla stock has surged 57% from its Jan. 6 bear market low of 101.81. But it’s still well below the 200-day line.

Meanwhile, BYD stock jumped 4.6%, back above the 200-day line for the first time since the end of August. While still building the right side of a very deep cup base, BYD stock arguably offered an aggressive entry Thursday.


Tesla Vs. BYD: EV Giants Vie For Crown, But Which Is The Better Buy?


Market Rally Analysis

The stock market rally continued to show strong action on Thursday.

The Nasdaq composite raced up to its 200-day line with its best close since mid-September. Just above the 200-day line is the December intraday high.

The S&P 500 got above Monday’s high and is about 1% from its December peak. The index has cleared a long-term downsloping trendline.

The Dow Jones held support at its 50-day line. The Russell 2000 hit a five-month high intraday, topping its late 2022 peaks, before pulling back.

Tesla stock was a big contributor to the Nasdaq’s advance, clearly, with Microsoft, Nvidia and other giants doing well.

But it wasn’t just megacaps. The Direxion Nasdaq-100 Equal Weighted ETF (QQQE) popped 1.6% on Thursday to a five-month closing high. The Invesco S&P 500 Equal Weight ETF (RSP) advanced 0.8%, hitting a five-month intraday high.

Advancers led decliners by 2-to-1 on the NYSE and 3-to-2 on the Nasdaq. New highs easily trumped new lows.

Some leading stocks reversed lower while many others looked extended.

CVX stock was clearly actionable Thursday, along with fellow oil major Exxon Mobil (XOM) and several other oil-related names. Allegro Microsystems (ALGM) claimed a buy point, while Tractor Supply (TSCO) and Wingstop (WING) flashed buy signals.


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What To Do Now

The stock market rallied, since the Jan. 6 follow-through days, has been a strong and healthy uptrend, with only modest pullbacks. Breakouts and buy signals have had a much higher success rate than last year.

So investors should have been building up exposure gradually. That can continue, though you could choose to hold off new buys until the major indexes clear some final resistance areas, especially with more big earnings and the Federal Reserve meeting in the next week or so.

The energy, chip, e-commerce, restaurant/retail, housing, biotech, industrial, travel and financial sectors are showing positive action, with stocks clearing buy points or setting up. So make sure your watchlists are comprehensive.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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