Dow Jones futures will open on Sunday night, along with the S&P 500 and Nasdaq futures. The stock market suffered another week of losses as government bond yields continued to rise.
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The main indices hit resistance and broke below support levels. Below the surface it was even worse. Leading stocks and sectors that held up well showed tensions, with miners selling off with particular difficulty. Opportunities to buy quickly turned down. Stock growth continued to decline.
This is the peak profit week with Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN), Google Parent Alphabet (GOOGL), Exxon Mobil (XOM), Caterpillar (CAT), Chevron (CVX), Raytheon Technologies RTX) and General Dynamics (GD) are among hundreds of companies reporting this week.
But as market conditions worsen, the flow of profits gives investors another reason to stay away. But keep a close eye on big profits, such as Apple, Exxon and General Dynamics, and the market’s reaction to these reports.
XOM’s shares are on the Big Cap 20 list, which is full of energy and goods.
The video embedded in this article examines market action in detail, while analyzing shares of AAPL, Exxon and General Dynamics.
Dow Jones futures today
Dow Jones futures open at 18:00 ET on Sunday, along with S&P 500 and Nasdaq 100 futures.
ETFs tracking the Dow Jones and S&P 500 fell 0.5% and 0.4% on Friday night, respectively. Tracker Nasdaq-100 Invesco QQQ ETF (QQQ) fell 0.35%.
Remember that the action at night in Dow futures and elsewhere does not necessarily turn into actual trading in the next regular session of the stock market.
Join the IBD experts as they analyze the actions that can be taken in the stock market rally on IBD Live
Stock market action
The stock market tried to rise, but then sold out sharply, sinking to the end of weekly lows. But sharp weekly losses mask the size of Thursday’s peak sales during the day.
The Dow Jones industrial average fell 1.75% in stock market trading last week. The S&P 500 index fell 2.7%. The Nasdaq index fell 3.8%. Russell 2000 with a small capitalization fell 3.1%.
The yield on 10-year government bonds rose by 8 basis points to 2.91%. Raising the Fed’s interest rates by 50 basis points during the meeting in early May is a virtual lock, along with the beginning of balance cuts. Now the markets have largely estimated prices at 75 basis points at the June meeting.
US crude futures fell 4.1 percent to $ 102.71 a barrel last week.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 6.3% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) withdrew just over 4%. The iShares Expanded Tech-Software Sector ETF (IGV) ETF fell 5.5%. VanEck Vectors Semiconductor ETF (SMH) lost 1.5% after giving up solid gains in the middle of the week.
The SPDR S&P Metals & Mining ETF (XME) fell 11.3% last week. The Global X US Infrastructure Development ETF (PAVE) fell 1.9%. The US Global Jets ETF (JETS) jumped 2.7%. The SPDR S&P Homebuilders ETF (XHB) was down 0.2%. Energy Select SPDR ETF (XLE) fell 4.5%, with shares of Exxon and Chevron being the first two holdings. Financial Select SPDR ETF (XLF) lost nearly 2%. The SPDR Fund for Selected Health Sectors (XLV) lost 3.5%.
Reflecting more speculative stock histories, the ARK Innovation ETF (ARKK) fell 11.1% last week and the ARK Genomics ETF (ARKG) by 9.8%.
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Apple Stock
Apple’s earnings for the second fiscal quarter are expected on Thursday night. Analysts expect earnings of 2% to $ 1.43 with a modest increase in revenue from a year earlier. The iPhone giant is likely to highlight production issues for Q2 and the current Q3. Analysts also forecast an increase in dividends and a repurchase of AAPL shares for technology titanium in cash.
After flashing some buy signals at the end of March during a series of victories in 11 sessions, Apple shares fell back for four consecutive weeks to below its 50-day line. It fell 2.1% to 161.79 last week and the stock is moving back to its 200-day moving average. Technically, Apple shares still have a buying point of 179.71, just above the March 30 high.
The relative strength of AAPL shares is not far from record highs. This is a sign of the weakness of the S&P 500 rather than the strength of Apple. However, if Apple’s profits are solid and the market improves, AAPL shares may be among the leaders.
Exxon Stock
Exxon’s earnings are expected on Friday, along with shares of Chevron from other oil companies.
After a strong rise, XOM shares are working on a shallow glass, finding support on the 21-day moving average. Shares of Exxon fell 3.1% to 85.13 last week, providing a slight shake after some jams in previous weeks.
That’s not far from a buying point of 91.60 on the daily chart, according to MarketSmith’s analysis. On a weekly chart, XOM shares have a handle with an input of 89.90. But anyway, investors should probably avoid making new purchases until profits are announced.
The colleague of the oil company Chevron also announced on Friday. Shares of CVX have shown similar effects on the chart in recent weeks and months.
General Dynamics Stock
General Dynamics earnings are expected on Wednesday. Last week, General Dynamics shares fell 2% to 238.79, falling below its 21-day moving average. On a weekly chart, GD shares found support just above their 10-week line.
The defense giant has a flat base with 255.09 points to buy. On a weekly chart, General Dynamics shares have a 4-week decline, simply missing a fifth “narrow” week. Investors could use 249.79, just above Wednesday’s highest level, as an early entry.
Shares of RTX, Northrop Grumman (NOC) and L3Harris Technologies (LHX) also made gains next week, with shares on equal footing near their 10-week lines. Lockheed Martin (LMT), which already announced last week, shows a similar effect on the chart.
Stock market analysis
The stock market has again suffered significant weekly losses as government bond yields continue to rise sharply. Over the past week, the main indices reached or exceeded key levels, but then fell sharply, closing at weekly lows. The Nasdaq and then the S&P 500 crashed to the bottom of the previous week.
The Nasdaq is a bad day since undercutting its lowest levels in March. The S&P 500 and Russell 2000 are not far from their worst levels in 2022.
Google and Nvidia (NVDA) have already bottomed out in March. ARKK and ARKG are just above the levels.
Leading stocks also sent negative signals.
Mining stocks sold out sharply, with several warning of weaker production updates and rising costs. Alcoa (AA), BHP (BHP), Rio Tinto (RIO), Vale (VALE), Freeport McMoRan (FCX) and Newmont Mining (NEM) fell below their 50-day moving averages.
Fortinet (FTNT) and Expedia (EXPE), two stocks in relative pockets of market power, have suffered brutal negative conversions. Speaking of Expedia, hotels have also fallen, despite older news from airlines.
Hospitals were forming, but HCA Healthcare (HCA) crashed on Friday, dragging down the profit warning group. The HCA, along with the Intuitive Surgical Guidelines (ISRG), also hit several medical device manufacturers.
Manufacturers of medicines and biotechnology have suffered significant losses over the past week. Some still have decent charts, but Eli Lilly (LLY) fell for nine consecutive sessions to undermine buying points. Lilly’s profits are expected next week.
Still, steel stocks still look strong, although they fell on Friday. Energy reserves look good. Defenders such as General Dynamics and Raytheon remain at bases. REITs and insurers are relatively safe. But strong pockets are shrinking – and increasingly relative to actual profits – while the wider market is hard to sell.
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What should we do now
The stock market went from bad to worse. Even areas of power are beginning to suffer and are the subject of sudden, forced sales.
There is no real reason to have anything more than minimal exposure in the current market, with the possible exception of long-term big profits. Being fully cash makes a lot of sense.
Market conditions will eventually improve, but they could get much worse before that happens. There is no guarantee that former leaders or your current holdings will make the next progress.
Right now, investors need to focus on maintaining their financial and mental capital. You don’t want to fight the negative market trend and then be too exhausted and shy to take advantage of the next steady uptrend.
Don’t get sucked into a strong market opening or even a stable session or two. Big profits in bad markets should be viewed with suspicion.
Keep working on your watch lists. Focus on relative strength, even if the stock is not necessarily in position.
Read the Big Picture every day to stay in line with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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