Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Federal Reserve chief Jerome Powell’s annual Jackson Hole speech looms large.
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Can This Cybersecurity Stock Benefit From CrowdStrike Debacle? Upcoming Earnings May Tell.
Palo Alto Networks (PANW), Cava Group (CAVA) and TJX Cos. (TJX) are key earnings on tap with the stocks around buy areas.
The stock market rally had its best week of 2024, buoyed by positive inflation and economic data. The major indexes staged a follow-through day on Tuesday with a subsequent FTD on Thursday.
Nvidia (NVDA) made a huge move last week, offering an early entry. Meta Platforms (META) and Arista Networks (ANET), also AI plays, have forged new bases and are close to buy points.
Meanwhile, Tesla (TSLA) had a strong move in the latest week, regaining key levels. But its chart has flaws.
Nvidia stock is on Leaderboard, with Cava on the Leaderboard watchlist. Cava stock is on SwingTrader. Nvidia and Arista stock are on the IBD 50.
Fed Chief Powell At Jackson Hole
Federal Reserve chief Jerome Powell will speak on 10 a.m. ET at the Kansas City Fed’s Jackson Hole Economic Policy Symposium. The keynote address will cover the economic outlook.
Powell is likely to give signals that the central bank is poised to begin Fed rate cuts in a gradual way. With recent economic data once again favoring a soft landing scenario, markets are pricing in a quarter-point rate cut on Sept. 18, with 75-100 basis points for the full year.
If Powell surprises and hints that Fed rate cuts are not a done deal, the market reaction could be significant.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
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 rally continued its comeback from the Aug. 5 lows, with the Dow, S&P 500 and Nasdaq all boasting their best weekly gains of 2024.
The Dow Jones Industrial Average gained 2.9% in last week’s stock market trading. The S&P 500 index leapt 3.9%. The Nasdaq composite soared 5.3%. The small-cap Russell 2000 popped 2.9%.
All these indexes are above their 50-day moving averages.
A market pause wouldn’t be a surprise. After strong gains from the Aug. 5 low, a pause or pullback would be normal from a technical standpoint. On the news front, markets may be hesitant ahead of Fed chief Powell’s Jackson Hole speech. Nvidia earnings will soon follow.
A pause in the indexes also would let many stocks fill out bases and forge handles.
The 10-year Treasury yield fell five basis points to 3.89%, while the two-year yield climbed 10 basis points to 4.06%. Recession fears have eased, reducing aggressive Fed rate-cut bets, but cooling inflation is continuing the general downtrend in long-term Treasury yields.
U.S. crude oil futures fell 19 cents to $76.65 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.4% last week. The iShares Expanded Tech-Software Sector ETF (IGV) popped 3.7%. The VanEck Vectors Semiconductor ETF (SMH) sprinted 9.7%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) jumped 6.3% last week and ARK Genomics ETF (ARKG) rebounded 7.1%. Tesla stock is a significant holding across Ark Invest’s ETFs, but Meta stock is an even-bigger holding. Cathie Wood also has built up a significant Nvidia stake.
SPDR S&P Metals & Mining ETF (XME) and the SPDR S&P Homebuilders ETF (XHB) advanced 2%. The Energy Select SPDR ETF (XLE) gained 1.2% and the Health Care Select Sector SPDR Fund (XLV) was up 1.9%. The Industrial Select Sector SPDR Fund (XLI) rebounded 2.2%. The Financial Select SPDR ETF (XLF) rallied 3.2%.
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Palo Alto Earnings
Palo Alto earnings are due Monday night. EPS is seen falling 2%, with revenue growth slowing for a fourth straight quarter.
PANW rose 0.8% to 334.11 last week, pulling back somewhat Friday. That followed the prior week’s 8.5% gain in an upside reverse. Palo Alto stock has a 380.84 buy point, but investors could use the June 28 high of 345.90 as an early entry.
Palo Alto’s earnings and guidance will key for other cybersecurity plays, with Fortinet (FTNT) and CyberArk Software (CYBR) near buy points.
TJX Earnings
TJX earnings are set for early Wednesday, with the off-price retailer’s EPS and sales growth set to slow for a second straight quarter. TJX stock has a new flat base with a 115.34 buy point, edging up 0.7% to 111.45 last week. A strong move off the 50-day line would offer an early entry.
TJX earnings and guidance will be important for discount retailers, including peer Ross Stores (ROST), which reports Thursday night.
Cava Earnings
Cava earnings are due Thursday night, with EPS seen tumbling vs. a year earlier. Traffic and same-store sales are key. CAVA stock jumped 9.6% last week to 98.96, after the prior week’s big 11% upside reversal gain. The Mediterranean-themed eatery on Friday cleared a short consolidation that was one day from being a cup base. Investors could still use 98.69 as a buy point, though looming earnings raise the risks.
Nvidia Stock
Nvidia stock spiked 18.9% to 124.58, its best weekly gain since May 2023.
The leading AI chip company has regained its position above a $3 trillion market cap, with shares showing strength by reclaiming the 50-day line. Investors can consider an early entry with NVDA stock having an official buy point at 136.15 or 140.76, ahead of Nvidia earnings on Aug. 28. The stock has been the top performer in the S&P 500 index this year, boasting a 152% gain.
Meta stock also made significant gains, reaching 527.42 and nearing its record high. The parent company of Facebook and Instagram is forming a cup base with a 542.81 buy point, according to MarketSurge analysis. With a 49% increase in 2024, Meta stock is another standout in the S&P 500.
Arista stock surged by 5.4% to 353.89, bouncing back from the 50-day line. The networking giant has a consolidation pattern with a 376.50 buy point, offering investors an opportunity for an early entry. Arista stock has seen a 50% increase this year.
Tesla stock also saw a strong rebound, jumping 8.1% to 216.12 and regaining key moving averages. While the EV giant may continue its upward momentum, other stocks with better charts and fundamentals are worth considering.
As the stock market rally presents buying opportunities, investors should gradually increase exposure while monitoring market behavior. Keep an eye on leading sectors such as technology, healthcare, aerospace, financials, and gold stocks. Stay informed with daily market updates and stock analysis to make well-informed investment decisions.
Follow Ed Carson on Threads at @edcarson1971 and on Twitter at @IBD_ECarson for more stock market insights. given sentence:
The cat is sleeping peacefully on the windowsill.
Rewritten sentence:
Peacefully sleeping on the windowsill is the cat.