Dow Jones futures rose modestly overnight, along with S&P 500 futures and Nasdaq futures, ahead of a slew of key economic reports. Warren Buffett’s Berkshire Hathaway (BRKB) disclosed new stakes in aerospace firm Heico (HEI) and Ulta Beauty (ULTA).
Cisco Systems (CSCO) jumped late on earnings. Walmart (WMT), Alibaba (BABA), JD.com (JD) report early Thursday.
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Market Holds Follow-Through Day Gains; Ferrari, Allstate, Netflix Flash Buy Signals
After Tuesday’s follow-through day on the major indexes, the newly confirmed stock market rally added slightly to gains Wednesday with the S&P 500 right at a key level. CPI inflation cooled slightly after Tuesday’s surprisingly tame producer price index.
A few more stocks flashed buy signals Wednesday, including Ferrari (RACE), Allstate (ALL) and Netflix (NFLX). Nvidia (NVDA) extended a strong weekly gain as it works toward key resistance. On the downside, Tesla (TSLA) and Google-parent Alphabet (GOOGL) were notable Magnificent Seven drags.
Nvidia stock is on Leaderboard. Ferrari stock has joined SwingTrader. Netflix stock is on the IBD 50. Ferrari was Wednesday’s IBD Stock Of The Day.
The video embedded in this article discusses Wednesday’s market action and analyzes Ferrari, Allstate and Netflix stock.
Dow Jones Futures Today
Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures climbed 0.5%. Cisco stock is a Dow Jones, S&P 500 and Nasdaq 100 member.
The 10-year Treasury yield rose to 3.84%.
China retail sales rose 2.7% in July vs. a year earlier, just beating views for 2.6%. Industrial production grew 5.1% vs. forecasts for 5.2%. Year-to-date fixed asset investment increased 3.6%, below estimates of 3.9%, with real estate down 10.2%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Warren Buffett Discloses Ulta, Heico Buys
In its latest 13F filing, Buffett’s Berkshire Hathaway disclosed new stakes in beauty products retailer Ulta Beauty and aerospace/defense firm Heico.
Ulta stock surged 14% in overnight action after hitting a three-year low earlier this week. Heico rose 4%, eying a fresh high.
Investors already knew that Warren Buffett sold net equities yet again in Q2. That included a major cut in Berkshire’s Apple (AAPL) stake.
BRKB stock rose 1.4% to 438.47 on Wednesday, moving within a buy zone.
Meanwhile, Bill Ackman built new stakes in Nike (NKE) and investment management company Brookfield (BN), in Q2, according to a 13F filing by Ackman’s Pershing Square. Nike stock, which hit a four-year low earlier this month, rose modestly late Wednesday. BN stock, already in a buy zone, edged higher.
Key Earnings
Cisco earnings topped views with the long-lagging networking giant guiding higher on fiscal Q1 EPS. The Dow giant also said it will cut 7% of staff. CSCO stock jumped in late trade. Shares edged higher on Wednesday after hitting a 21-month low on Monday.
Walmart earnings are due early Thursday, with its results, guidance and commentary offering insight into the economy and consumers. WMT stock rose 0.8% to 68.66 on Wednesday, eking above the 50-day line. The Dow discount giant is working on a new consolidation above a prior double-bottom base cleared on May 16 on a Q1 earnings gap-up. A strong move above the 50-day line would offer a buying opportunity.
Chinese e-commerce giants Alibaba and JD are on tap before the open as well. BABA stock is trying to build the right side of a base but has work to do. JD stock is below its 50-day and 200-day lines.
Economic Data On Tap
At 8:30 a.m. ET, investors will get July retail sales, weekly jobless claims as well as August readings for the Philly Fed manufacturing index and the New York Fed’s Empire State manufacturing index.
The July industrial production report is due at 9:15 a.m., followed by the NAHB Housing Market Index at 10 a.m.
Walmart earnings and comments about consumer spending will also be important for assessing current economic conditions.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally wavered Wednesday morning, but ultimately held and slightly extended Tuesday’s bullish gains. Before the open, the July consumer price index showed overall and core inflation cooling slightly vs. June.
The Dow Jones Industrial Average rose 0.6% in Wednesday’s stock market trading, moving further above its 50-day and 21-day lines. The S&P 500 index added 0.3%, topping the 50-day line by the smallest of fractions. The Nasdaq composite edged higher, holding its 21-day line. The small-cap Russell 2000 fell 0.5%, falling back from the 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.2%, extending its move from the 50-day line.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) dipped 0.1%, just below the 21-day line after retaking its 200-day on Tuesday.
While the market rally is now a confirmed uptrend, it still faces key resistance. A V-shape market recovery would be unusual. An S&P 500 pause around the 50-day line over several days or weeks could be constructive. It would also let a lot of stocks forge better bases and perhaps handles.
U.S. crude oil prices fell 1.75% to $76.98 a barrel.
The 10-year Treasury yield fell three basis points to 3.82%, down 18 basis points in the past four sessions.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.2%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 0.6%. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.1%. Nvidia stock is the No.
In SMH, the ARK Innovation ETF (ARKK) and ARK Genomics ETF (ARKG) saw declines of 2.7% and 1.7% respectively, reflecting a focus on more speculative story stocks. Tesla stock, a significant holding in Ark Invest’s ETFs, dropped 3.1% to 201.38, falling below the 200-day line on Wednesday.
Meanwhile, the SPDR S&P Metals & Mining ETF (XME) retreated 1.8%, the SPDR S&P Homebuilders ETF (XHB) fell 0.4%, the Energy Select SPDR ETF (XLE) advanced 0.6%, and the Health Care Select Sector SPDR Fund (XLV) gained 0.4%. The Industrial Select Sector SPDR Fund (XLI) was up 0.4%.
On the other hand, the Financial Select SPDR ETF (XLF) rose 1.2%, with Berkshire stock being the top holding in XLF. Allstate was also noted as a member of this ETF.
This article also provides insights into Nvidia stock, highlighting its rise of 1.6% to 118.01 and its upcoming earnings report on Aug. 28. Additionally, it mentions stocks in buy areas such as Ferrari, Allstate, and Netflix, each showing positive movements in the market.
Investors are advised to participate in the current rally with caution, keeping an eye on market trends and leading stocks. The article concludes with a reminder to follow market updates and stay informed about potential investment opportunities. following sentence:
“The cat sat lazily in the sun, enjoying its warmth.”
“The lazy cat basked in the sun, reveling in its warmth.”