Dow Jones futures rose modestly on Friday morning, along with S&P 500 futures and Nasdaq futures, but pared gains as Treasury yields fell. Nike (OF) Y micron technology (IN) earnings are in the spotlight with the Fed’s favorite inflation gauge under cover.
The stock market sold off sharply on Thursday, ending Wednesday’s gains. The S&P 500 hit new bear market lows. The Nasdaq Composite hasn’t quite undercut its June lows, but the large-cap Nasdaq 100 has, led by shares of Apple and Tesla (TSLA).
Treasury yields rallied a bit on Thursday, while jobless claims fell to a five-month low, something the Fed doesn’t want to see. Apple (AAPL) Y Car Max (KMX) caused extensive losses on Thursday. After paring losses on Wednesday fueled by a report of reduced iPhone production due to lackluster demand, Apple shares sold off sharply on Thursday, in part due to an analyst downgrade, and iPhone chipmakers they also had problems.
Car Max (KMX) narrowly missed earnings views on Thursday morning, warning of “affordability challenges.” For largely similar reasons, Moody’s downgraded its outlook for the global auto industry to negative from stable. KMX shares plunged, sinking other car dealers. But general motors (GM), ford engine (F), Stellar (STLA) and shares of Tesla were also sold.
Tesla has a lot of news to come. Tesla will hold its annual AI Day on Friday night. Over the weekend, Tesla is likely to release third-quarter delivery figures. But investors in TSLA stock won’t have a chance to respond to those events until Monday morning.
Tesla on Thursday night denied a local media report that the electric vehicle giant would significantly reduce prices of the Model 3 and Model Y in China. There has been growing speculation that Tesla would cut some prices from China in early October.
Nike profits and sales narrowly beat consensus for the fiscal first quarter. But gross margins fell significantly compared to the prior year, primarily due to the liquidation of excess inventory in North America. North America inventory increased 65% compared to the prior year. Sportswear giant Dow Jones said it will take “decisive action” to get rid of the wanted products.
NKE shares were down more than 10% in premarket action. Shares of Nike fell 3.2% on Thursday to 95.52, hitting a new two-year intraday low.
Micron’s profits slightly outperformed, while revenues fell short. The memory chip giant headed significantly lower during the current fiscal first quarter. It also plans to cut spending on wafer manufacturing equipment by up to 50% in the current fiscal year compared to fiscal 2022.
MU shares were up 1% early Friday. Micron shares fell 1.9% to 50.01 in trading on Thursday, after hitting a 23-month low last week.
Micron’s capex cut isn’t good news for memory-exposed chip equipment giants like Applied Materials (ENORMOUS), KLA Corporation (CLUTCH) Y lam research (LRCX). All three stocks fell slightly early Friday.
In other news, IBM (IBM), cut its quarterly dividend by 78% to 37 cents a share. IBM shares rose overnight.
Dow Jones Futures Today
Dow Jones futures advanced 0.2% against fair value. NKE and IBM stocks are constituents of the Dow Jones. S&P 500 futures were up 0.3% and Nasdaq 100 futures were up 0.2%. Futures are far from their morning highs.
The 10-year yield fell 5 basis points to 3.7%, reversing Thursday night’s modest gains.
China’s manufacturing surveys for September were mixed. The official manufacturing PMI rose to 50.1 from 49.4 in August, barely above the breakeven level of 50 and beating the forecast of 49.8. But the gauge for private factory Caixin fell 1.4 points to 48.1.
China’s central bank is allowing cities to lower the floor on mortgage rates, if those areas have seen recent falls in home prices.
At 8:30 am ET, the Commerce Department will release its personal income and consumer spending report for August. Investors will focus on the PCE price index, the Fed’s favorite gauge of inflation. The overall PCE index should show a slightly smaller gain of 6.1% compared to a year ago. But core PCE inflation is forecast to rise to 4.8% from 4.6%.
Remember that the overnight action in dow futures and elsewhere does not necessarily translate to actual trading in the next regular stock Exchange session.
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stock market thursday
The stock market fell sharply at the open and remained in the red all day, closing only modestly above session lows.
The Dow Jones Industrial Average fell 1.5% in trading on Thursday. stock trading. The S&P 500 index sank 2.1%. The Nasdaq Composite slipped 2.8%. The small-cap Russell 2000 declined 2.2%.
Apple shares fell 4.9% to 142.48, hitting their worst levels since early July, though still some distance from the June low. Bank of America cut Apple shares to neutral with a price target of 160.
CarMax profit fell 54% from a year earlier, well below consensus. The price of used cars began to come under pressure, with the car dealer citing affordability issues. KMX shares fell nearly 25%. caravan (CNVA) fell by 20%.
CarMax’s failure and Moody’s downgrading of the industry hit automakers hard. GM shares sank 5.65%, Ford 5.8% and Chrysler parent Stellantis 4.8%. Shares of Tesla fell 6.8%, falling from near their 50- and 200-day lines, but remained above short-term lows.
The 10-year Treasury yield rose 4 basis points to 3.75%, after hitting 3.81% intraday. That follows Wednesday’s drop of 26 basis points. Still, the benchmark Treasury yield remains on track for a ninth straight weekly gain.
US crude prices fell 1.1% to $81.23 a barrel.
Between best ETFsthe Innovator IBD 50 ETF (FFTY) fell 1.2%. The iShares Extended Technology Software Sector ETF (VAT) lost 1.7%. The VanEck Vector Semiconductor ETF (SMH) lost 3.15%. MU shares are a notable holding for SMH, along with AMAT, LRCX and KLAC.
SPDR S&P Metals & Mining ETF (XME) fell 1.8%. The Energy Select SPDR ETF (XLE) and the Financial Select SPDR ETF (Four. Five) fell 1.3%. The SPDR Fund of the Select Sector of Health Care (XLV) submerged 0.8%.
Mirroring more speculative historical stocks, ARK Innovation ETF (ARKK) fell 5.5% and ARK Genomics ETF (ARKG) 4%, after strong gains on Wednesday. Tesla shares are a major holding in Ark Invest ETFs.
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Stock Market Analysis
So far Wednesday’s stock market rebound. On Thursday, it took just a few minutes for the major indices to wipe out the entire one-day bounce.
The S&P 500 index lowered from Tuesday’s levels, marking a new bear market low. The Nasdaq 100 just undercut its June lows, with Apple and Tesla among the biggest losers.
The Nasdaq Composite itself has yet to undermine its June lows, but it fell below the intraday low of September 23.
The recovery day counts for the S&P 500 and Nasdaq have returned to zero. The Dow did not break all the way below Tuesday’s bear market intraday low, so Thursday was technically the second day of its rally attempt.
Treasury yields rose on Thursday but recovered only a fraction of Wednesday’s losses. The US dollar lost ground for the second consecutive session. Still, the 10-year Treasury yield and the dollar have risen sharply in recent weeks.
Apple, CarMax and Nike have all raised new concerns about consumer spending. Apple stock and iPhone chip names, along with GM, Tesla and the auto sector, are a pretty big part of the market. Nike alone is a $150 billion blue chip component.
A Metaplatforms (GOAL) the hiring freeze and likely downsizing, coupled with Micron’s weak outlook, added to broader corporate woes.
But you don’t have to look for the reasons why the stock sold off on Thursday. It is a bear market. The Federal Reserve is aggressively raising interest rates, even as the US economy risks slipping into a clear recession.
Wednesday’s bounce was overdue, but it also did not indicate that the severe downtrend had come to an end.
The CBOE volatility index, or VIX, rose on Thursday. But it was an inside day for the market fear gauge after Wednesday’s downside reversal. That suggests major indices may need to decisively break below their June lows before the bear market bottoms out.
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What to do now
Investors need patience. At some point, the bear market will end and a new sustained uptrend will develop. But don’t jump at the first spike. Follow-up days They are a good way to quickly enter a new market rally, but with at least some indication that it may have staying power.
If you bought stocks on Wednesday’s bounce, you should be ready to get back out quickly. some as Vertex Pharmaceuticals (VRTX) Y double check (YOU) held up well on Thursday. But many intriguing names on Wednesday wiped out those gains.
For now, focus on updating your watch lists. Look for stocks with strong relative strength. If they have key moving averages, great, but at this point a lot of relative “winners” like World Wrestling Entertainment (WWE), are below their 50 and 200 day lines.
Read The panorama every day to stay in sync with market direction and major stocks and sectors.
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