Dow Jones futures: Jobs report key to market rally as Apple, Google fall

The October jobs report edged higher overnight, along with Dow Jones futures, S&P 500 futures and Nasdaq futures.




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The now-under-pressure stock market rally continued to digest Fed Chairman Jerome Powell’s hawkish comments that the peak or “terminal” Fed funds rate may be higher than previously expected.

Major indices fell on Thursday morning. They bounced back from early lows, with the Dow Jones briefly turning positive, but stocks faded to the close.

MegaCap Technologies continues to weigh major indices, particularly the Nasdaq. Microsoft joined in Amazon.com (AMZN), Facebook Parent Meta platforms (Meta) and Google Parents letters (Google) in setting bear market lows. Apple (AAPL) is still above its June low, but this week moved toward its October low.

Thursday night includes major earnings moves Amgen (AMGN), Yelp (YELP), EOG Resources (EOG), PayPal (PYPL), the square parent prevent (SQ), maternity (PGNY), Cloudflare (Net) and Salary (PCTY)

Amgen shares were little changed while shares of Yelp and PYPL fell. Net stocks also tumbled as cloud software names plunged overnight. SQ stock rose and PGNY rose. PCTY is not yet trading.

Cardinal health (CAH) reports early on Friday, CAH shares were slightly extended from buy territory.

Statement of Works

Economists expect the October jobs report to show nonfarm payrolls up 210,000, with the unemployment rate up 3.6%. 2020 marks the third straight month of declining hiring and the smallest job gains since December, but not enough for the Fed’s liking.

There are reasons to believe October employment data will be very weak than expected.

However, other labor data this week was warmer than expected, including September job openings and weekly jobless claims.

Friday’s October jobs report will be key to Fed rate hike expectations and stock market direction, at least in the short term. The November jobs report and two CPI inflation reports will come before the December Fed meeting.

Markets now see a 50.4% chance of a fifth-straight 75-basis-point hike on Dec. 14. It was 42% on Wednesday.

Dow Jones Futures Today

Dow Jones futures fell 0.15%. fair value. S&P 500 futures fell 0.2% and Nasdaq 100 futures fell 0.1%.

The Labor Department’s October jobs report will be released at 8:30 a.m. ET on Friday. Expect big moves in Dow futures and Treasury yields, perhaps whipsaw action.

Remember that it is an overnight operation Dow futures The next routine elsewhere doesn’t necessarily translate into actual trading stock market session.


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Stock market rally

The stock market’s rally on Thursday was once again the worst hit by the Nasdaq.

The Dow Jones Industrial Average was down 0.5% on Thursday Stock market trading. The S&P 500 index retreated 1.1%. The Nasdaq composite fell 1.7%. The small-cap Russell 2000 yielded 0.6%.

The 10-year Treasury yield rose 6 basis points to 4.12%, but was at an intraday high of 4.2%. The dollar rose after Wednesday’s strong reversal.

U.S. crude oil prices fell 2% to $88.17 a barrel, amid concerns about a strong dollar and global demand.

Apple Stock, Megacaps

Apple shares sold off 4.2%. Now down 10.2% for the week, the Dow Jones, S&P 500 and Nasdaq titan have retreated from its 200-day line and stabbed below its 50-day line.

Google shares fell 4.1%, hitting a two-year low. GOOGL shares fell 10.4% for the week.

Microsoft shares fell 2.7% to 214.25, finally breaking below their worst levels since October 2021. MSFT stock fell 9.2% this week.

Amazon shares lost 3.1%, their lowest point since March 2020. AMZN stock is down 13.6% this week.

META shares retreated 1.8%, hitting a seven-year low. Facebook Parent lost 10.4% this week after crashing nearly 24% last week.


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ETFs

in the middle Best ETFsInnovator IBD 50 ETF (FFTYrose 0.4%. iShares Expanded Technology-Software Sector ETF (VATSlipping 2.5%, MSFT stock remains a key component. VanEck Vectors Semiconductor ETF (SMH1.2% lost.

SPDR S&P Metals & Mining ETF (XMEdecreased by 0.3%. US Global Jets ETF (JETSdecreased by 0.1%. Energy Select SPDR ETF (XLE) rose 1.85% and Financial Select SPDR ETF (45) down 1.1%. Health Care Select Sector SPDR Fund (XLVdecreased by 0.4%.

Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKKslipped 0.7% and the ARK Genomics ETF (ARKGgave up to 0.9%.


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Market rally analysis

The stock market’s rally moved “higher under pressure” after Wednesday’s big pullback on dovish comments from Fed Chair Powell.

The Nasdaq closed below the October 21 follow-through day. Although the Nasdaq is clearly lagging behind in the current rally, this is a very bad sign for a market rally. While the S&P 500 fell below its 50-day line and the Dow Jones broke its 200-day line, other major indexes are above FTD lows.

The sell-off continued on Thursday, leading the Nasdaq back into declines and ending near session lows.

This is due to the megacaps of Apple, Amazon, Microsoft, Google and meta platforms.

The S&P 500, Dow Jones and Russell 2000 outperformed, but were close.

The Russell 2000 managed to finish above its 50-day and 21-day lines.

Invest in the S&P 500 Equal Weight ETF (RSP) fell 0.5%, much better than the megacap-heavy S&P 500, but closed below its 50-day low.

Don’t overestimate the market rally pullback outside of Apple and Megacaps. The Russell 2000 and the RSP ETF turned sharply upside down on Wednesday with the most leading stocks. And they lost more ground on Thursday.

With the Fed again reinforcing its dovish stance and Treasury yields rebounding, the stock market will struggle to maintain, let alone make a meaningful advance.

Silver’s jobs report could fuel a market rally or send the major indices sliding into bear market declines.


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What to do now

With market pressure and leading stocks volatile, investors should keep their exposure light. If the rally rebounds, such as the S&P 500 retracing its 50-day line, that could be a signal to consider gradually increasing exposure again.

There are many stocks that are relatively close to activity. So work on those watch lists. Stay engaged and flexible so you’re ready to add exposure or move sideways.

According to Big picture Each day should be in sync with the direction of the market and the leading stocks and sectors.

Follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.

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