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Dow Jones Futures: Market Gains Gain Reprieve; Key Indicators from Friday’s Jobs Report

Dow Jones futures fell overnight, as did S&P 500 futures and Nasdaq futures, with the August jobs report out soon. The stock market rose again during the day on Thursday, but rebounded to close.




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Despite the sizable close, there was more damage among major sectors and stocks amidst a lot of negative news.

U.S. ban on the sale of certain advanced chips from China to China. NVIDIA (NVDA) and AMD (AMD) blamed its semiconductor division. And several big sales from struggling software makers have beaten other big tech spaces. China’s lockdown of 21 million people over the Covid incident has also weighed on stocks, fueling the sell-off of crude oil, copper and base metals. Meanwhile, US Treasury yields and the US dollar surged following strong labor market data heading into the August jobs report.

More major stocks — and more Celsius Holdings (CELH) and enphase energy (ENPH) — Under pressure, but not yet cracked. Some stocks set in the past few weeks have broken through key supports such as: apple (AAPL), Arista Networks (ANET) And to some extent, Tesla (TSLA).

Investors should have minimal exposure in the current market environment.

job report

Economists expect Friday’s August jobs report to show nonfarm payrolls increased by 293,000 from 528,000 in July. Economists expect the unemployment rate to remain at a half-century low of 3.5%.

Labor force participation is key. A sustained labor force recovery would be a near-magical panacea for the economy, easing aggressive pressure on the Fed to raise rates.

However, participation has been trending downward in recent months and there is no slack in the job market.

The jobs report follows this week’s data with initial jobless claims falling to a two-month low and job openings in July well above expectations.


Why Friday’s Jobs Report Can’t Be Trusted


dow jones futures today

Dow Jones futures fell below fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures fell just below breakeven.

late thursday broadcom (AVGO) and lululemon athletica (LULU) reports strong earnings and raises guidance. AVGO stocks and lululemon jumped overnight. Both are far from viable, but positive actions for the market.

The jobs report is due out at 8:30 am ET and is sure to bring big moves to Dow futures, Treasury yields and more.

Note that overnight trading on Dow futures or elsewhere does not necessarily lead to actual trading on the next regular stock market session.


Join IBD experts analyzing viable stocks on IBD Live stock market rally


stock market rally

The stock market’s rally began on Thursday and after continuing its weakness, it rebounded late in the session and ended somewhat mixed.

The Dow Jones Industrial Average rose 0.5% in stock market trading on Thursday. The S&P 500 index he rose 0.3%. The Nasdaq Composite fell 0.3%. The small-cap Russell 2000 fell 1.1% on him.

US oil prices fell 3.3% to $86.61 a barrel.

The 10-year Treasury yield climbed 13 basis points to 3.265%, the highest since late June. The benchmark yield, which surged from just under 2.53% on August 2nd, is starting to approach his 11-year high of 3.48% on June 14th.

ETFs

The VanEck Vectores Semiconductor ETF (SMH) was up 2.2%. Nvidia and AMD shares are SMH’s primary holdings. NVDA’s stock fell 7.7% to a two-year low. AMD, which is less exposed to Chinese regulation than Nvidia, is down 3% and still above its June low.

The SPDR S&P Metal Mining ETF (XME) fell 3.8%. US Global Jets (JETS) fell 0.6%. The Energy Select SPDR ETF (XLE) was down 2.5% while the Financial Select SPDR ETF (XLF) was up 0.3%. The Healthcare Select Sector SPDR Fund (XLV) was up 1.6%.

The ARK Innovation ETF (ARKK) fell 0.4% and ARK Genomics (ARKG) rose 0.65%, reflecting stocks with more speculative stories. Tesla stock is Ark Invest’s primary holding in his ETF.


5 Best Chinese Stocks to Watch Right Now


Market rally analysis

Well, the stock market rally should have definitely bounced back. Whether a rally from Thursday’s intraday lows to a mixed market will likely hold back will depend on Friday’s jobs report.

During the day, the major indices suffered more damage.

The Nasdaq and S&P 500 didn’t break much below their July 26th lows, which may have signaled the end of the ‘high lows’ trend and triggered a move to a ‘correction market’. However, it is clearly below the 50-day moving average along with the Dow Jones.

The small-cap Russell 2000 and S&P mid-cap 400 fell below the 50-day line on Thursday.

In the face of so many headwinds and headlines, it was encouraging to see the market battle back on Thursday afternoon. However, the market rise he measured in weeks, months, or years, not in two-hour increments.

widespread weaknesses

Steel stocks, which had a buy signal a week ago, plunged. The chip name, which was doing very well last week, has plummeted. Oil stocks are struggling.

On the other hand, bottom fishing rallies such as Nvidia stocks data dog (DDOG) and ARKK ended a few weeks ago.

Solar, natural gas, and pollution control stocks are still holding up relatively well, but most of these stocks haven’t made headway and are starting to fall. Enphase was in stock, cheniere energy Will (LNG) and Celsius stage shakeout on Thursday or collapse next?

Albemarle (ALB) bounced back and forth from recent gains as lithium went on sale.

Even if the market as a whole recovers quickly, many of the shares that were set may need significant repair work. Apple and Tesla stocks closed higher after falling below the intraday 50-day line. But both look up to his 200-day line.

Vertex Pharmaceuticals (VRTX) shows aggressive behavior, united health (UNH) and centen (CNC) is fighting for key support in the old buy zone.


Time the Market with IBD’s ETF Market Strategy


what to do now

Now is not the time to buy stocks. If you have a few solid profitable stocks that are holding up, you can stick with them, but partial profits aren’t a bad idea.

It’s up to investors to decide when to sell their winning stocks, but there has to be a line somewhere.

This is not the right time to go short. The ideal time was when the market hit resistance at his 200-day line a few weeks ago. Short coverage gains, though often short-lived, can be intense. However, if the index stalls up to his 50-day line, perhaps even Arista, Apple, and Tesla stocks could create new short-selling opportunities.

Long and short, work on your watchlist. Even if you don’t intend to sell short, this exercise can help you analyze the overall market and prevent you from being overly bullish.

Read The Big Picture daily to understand the market direction and key stocks and sectors.

Follow Ed Carson on Twitter. @IBD_E Carson Stock market updates and more.

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