Dow Jones futures: Bulls want to pull back, Taiwan tops 5 breakouts; Moody’s lowers its forecasts for the United States

Dow Jones futures will open on Sunday evening, along with S&P 500 futures and Nasdaq futures. Late Friday, Moody’s lowered its outlook for US sovereignty to negative.

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The stock market rally rebounded strongly on Friday after Thursday’s decline, with major indexes surpassing their October highs. Market breadth remains weak, but leading stocks have performed well, with more buy or setup points being cleared.

The chip sector is coming, after software initially led the market rally.

Nvidia (NVDA), Broadcom (Afgo), Taiwan Semiconductor Co., Ltd (TSM), Kosovo Liberation Army (KLAC) And L Research (LRCX) Buy signals flashed on Friday.

while, Mercadolibre (Millie), Rocco (Rocco) And Datadog (DDOG) are recent earnings winners that may present another buying opportunity for investors.

Investors should look to prepare stocks and take advantage of buying opportunities.

Nvidia and Datadog stock is on IBD Leaderboard. Nvidia, Datadog, and MELI stocks are in the market Bahraini dinar 50. DDOG stock is on IBD Big Cap 20. MercadoLibre was IBD Stock of the Day on Friday.

The video embedded in this article reviewed the market action in depth and analyzed TSM, MercadoLibre, and… General Electric (General Electric).

Moody’s lowers its forecasts for the United States

Late Friday, Moody’s Investors Service lowered its outlook for the United States from stable to negative, citing high budget deficits and political polarization. Moody’s has now reaffirmed its AAA rating on US sovereign debt.

“In a context of rising interest rates, without effective fiscal policy measures to reduce government spending or raise revenues,” Moody’s expects the deficit to remain “very large.”

An increasingly divided country raises the risk that future governments will not address long-term issues.

In the short term, the 45-day government funding measure expires on November 17, with the risk of a government shutdown remaining high.

Dow jones futures today

Dow Jones futures open at 6pm EST on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Following Moody’s negative forecast for the US, ETFs pointed to a 0.1% decline for the Dow Jones, S&P 500 and Nasdaq 100 on Friday night.

The yield on the 10-year Treasury note rose slightly to 4.65%.

Remember, an overnight move in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze leading stocks and the market on IBD Live

Stock market pool

The stock market rally snapped a long winning streak on major indexes last week, but they ended with strong gains on Friday.

The Dow Jones Industrial Average rose 0.65% in stock market trading last week. The Standard & Poor’s 500 rose 1.3%. The Nasdaq Composite jumped 2.4%, rising just over 2% on Friday. All major indexes moved above their October highs, another bullish sign.

Market breadth was better on Friday but remains a concern for this week.

The small-cap Russell 2000 index fell 3.15% for the week despite a 1.1% rebound on Friday.

Invesco S&P 500 Equal Weight Fund (RSP) rose 1.2% on Friday but is still down 0.6% for the week.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) better. While the Nasdaq 100 lagged a significant weekly gain of 2.9%, the QQEW rose 0.7%, moving above its 50-day on Friday. A number of major technology companies outside of the majors have had strong weeks.

Strong market leadership. Technology is leading the charge, but the leaders come from a variety of sectors.

A longer pause in the market may be healthy, but the bulls don’t want to stop.

The 10-year Treasury yield rose 7 basis points to 4.63%, amid some significant daily volatility.

US crude oil futures fell 4.15% to $77.17 a barrel last week, but rebounded late in the week.

ETFs

Among the growth ETFs is the iShares Expanded Technology Software Sector ETF (IGV) jumped 4.1%, with Datadog stock on IGV. VanEck Vectors Semiconductor ETF (Trait) jumped 5.2%. Nvidia stock is the No. 1 stock in SMH, with TSM, Broadcom, KLA, and LRCX all major components.

SPDR S&P Metals and Mining Fund (XMEIt fell 3.6% last week as metal prices declined. SPDR S&P Homebuilders ETF (XHB) by 0.1%, thanks to Friday’s 2.1% rebound. Energy Select SPDR ETF (XLE(Down by 3.8% and Healthcare Select Sector SPDR Fund)Forty-fifth) decreased by 0.9%. Selected Industrial Sector SPDR Fund (forty-first0.9% profit

Financial Select SPDR ETF (XLF) rose by 0.4%.

Reflecting more speculative stocks, the ARK Innovation ETF (Ark) fell 1.8% last week and the ARK Genomics ETF (Arkj) decreased by 7.45%.

The top five Chinese stocks to watch now

Chip stocks are in buy zones

Nvidia stock rose 7.4% over the past week to 483.35, surpassing a double-bottom buy point of 476.09 on Friday. The relative strength line has reached a new high. The RS line, the blue line in the charts provided, tracks a stock’s performance against the S&P 500 Index.

Nvidia’s earnings are due on November 21, so there’s not much time to build a cushion. also, Microsoft (MSFT) will announce its latest AI developments at the Ignite 2023 event on Wednesday, with some buzz that it may unveil its own AI chip to ease its reliance on Nvidia.

Broadcom stock jumped 8.5% last week to 957.52. On Friday, stocks overcame resistance dating back to the end of May, according to a MarketSmith analysis. AVGO stock’s RS line also reached a new high.

Lam Research stock jumped 8.1% to 685.43, clearing the 665 entry level from an odd-looking double-bottom base. KLA stock rose 6.9% to 534.25, surpassing a buy point of 520.19. LRCX and KLA stock were among the best-performing stocks in the S&P 500 on Friday. They can both move forward Applied materials (deaden) Dividends, due November 16. AMAT stock also cleared a buy point on Friday.

TSM stock jumped 6.35% on Friday to 97.44 times normal value, breaking the trend line and the short-term 200-day high. On Friday, Taiwan Semiconductor Corporation announced October sales rose 15.7% from a year earlier and 34.8% from September. This signals a turnaround after three quarters of declining profits and revenues.

The foundry giant makes chips for Nvidia, Broadcom, apple (Camel) And many other things. It is also a huge buyer of chip equipment. So Taiwanese quasi sales likely helped drive Friday’s upward moves in NVDA, Broadcom, Lam Research and KLA shares.

Second chance for these winnings winners

MELI stock fell 1% to 1,374.39 last week after rising 15.6% the week before as the Latin American e-commerce and payments giant reported strong earnings. MercadoLibre stock now has a cup-with-handle base with a buy point of 1,398.15.

Roku stock fell 4.1% to 81.31 last week, hitting a weekly handle at a buy point of 86.40. The previous week, shares of the streaming media platform had surged 50% from a five-month low. Roku is still losing money but revenue growth accelerated for the third straight quarter.

Datadog stock rose 26% to 103.65 during the week on strong earnings and guidance. Stocks have consolidated since Tuesday’s rise. DDOG stock is above a 102 buy point from a double bottom base. But investors may want to use Tuesday’s high of 104.43 as an input. This could become a handle within a few days.

Time the market with IBD’s ETF market strategy

What are you doing now

The stock market rally looks healthy, as it rebounds quickly from Thursday’s decline. Leading stocks are doing well and expanding.

Investors can continue to gradually add exposure as long as the market and their positions are doing well.

Use this weekend to work on your watch lists. Since the follow-up days of November 1-2, a number of stocks have been extended, while many others are being created.

You want to be ready if and when new leaders emerge or liquidate other buy points.

Earnings season is past its peak but still active. Investors will also get October inflation and retail sales data in a busy week of economic reports.

Read The Big Picture every day to stay on top of the market trend and leading stocks and sectors.

Please follow Ed Carson on X/Twitter at @IBD_ECarsonTopics in @edcarson1971 And Bluesky V @edcarson.bsky.social For stock market updates and more.

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