Dow Jones Futures: Market Rally Eyes 2023 Highs; First Republic, Federal Reserve, Focus on Profits

Dow futures tended lower Sunday night, along with S&P 500 futures and Nasdaq futures. First Republic Bank’s fate remains unclear as regulators continue talks with bidders including JPMorgan Chase.

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The stock market rally fell sharply last week, but rebounded to close with solid gains, a change that could pave the way for a stronger advance. c. B. Morgan Chase (JPM) And PNC Financial Services (PNC) widely used as bidders for First Republic Bank (FRC), with a potential deal tonight.

Major indexes fell on Tuesday as First Republic Bank revived banking concerns. However, the major indicators found support and rebounded. In the beginning, huge maps like Meta platforms (meta) And Microsoft (MSFT) led the comeback, but its amplitude improved late in the week, especially on Friday.

The market’s rally looks more healthy, but it remains “under pressure”. Investors still need to see more market strength and more buying opportunities.

Earnings season continues to be heavy this coming week, with advanced micro devices (AMD) late on Tuesday and apple (AAPL) Thursday. The Fed will be raising the interest rate again on Wednesday, along with key economic data next week. The big question is whether Fed Chair Jerome Powell is signaling that the central bank will pause interest rate hikes.

Dow jones futures today

Dow Jones futures lost a fraction of their fair value. S&P 500 and Nasdaq 100 futures fell.

Crude oil futures fell slightly.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.

Hong Kong and many markets around the world will be closed for the Labor Day holiday on May 1, including most of Europe.

META stock is running IBD Leaderboard, with DXCM shares play dividend options. MSFT stock is at IBD Long-Term Leaders. ANET stock is located in defect 50. AMD, Arista Networks and DXCM stocks are in issue IBD Big Cap 20. Arista Networks was IBD Friday’s stock

The video embedded in the article discussed a big week in the market and analyzed AMD stock, InMode (INMD) and dexcom.

The first republic’s fate is unclear

JPMorgan Chase, PNC Financial, and Citizens Finance Group (CFG) bid for all or part of the First Republic after its government takeover, according to multiple reports. The FDIC has requested that final bids be submitted by Sunday.

Any purchase after the FDIC takes First Republic is likely to be in receivership, at least for a while, and possibly carry at least some losses.

JPMorgan would need a regulatory waiver to buy First Republic. JPMorgan already controls at least 10% of US deposits.

But, as of now, nothing has been announced, with talks continuing Sunday night.

How will First Republic stock react if no deal is reached by Monday? FRC stock fell 34% in heavy after-hours trading Friday, on reports that the FDIC will take the California-based bank into receivership.

First Republic stock fell 75% last week to record lows, helped by the massive influx of deposits in the first quarter. Despite efforts to engineer a quasi-bailout by major banks, FDIC takeover expectations grew during the week.

The FDIC will almost certainly take over all First Republic Bank deposits. But FRC stock investors may end up with nothing.

While regional banks fell on Tuesday, they cut their weekly losses significantly. The deposit exodus for the First Republic was in a class of its own.

Federal Reserve data Friday evening showed both bank deposits and loans rising in the last week, indicating that there is no credit crunch yet.

A quick resolution of the First Republic situation could restore confidence in the banking sector and boost market sentiment – if there is no further downturn.

Amazon tops 5 S&P 500 stocks near buy points after earnings

Monday earnings and sales

Meanwhile, the EV-focused chipmaker on semiconductors (on) before opening on Monday. ON stock has fallen strongly in the past week along with other EV-exposed chipmakers amid concerns about EV demand.

China EV startups Lee Otto (L.I), New (nio) And XPeng (XPEV) will report deliveries in April as early as Monday. Weekly data shows strong sales for Li Auto, while Nio and Xpeng are struggling.

China’s EV and battery giant BYD (BYDDF) April sales data will be released early in the week. the Tesla (TSLAThe rival company reported strong first-quarter earnings on Thursday.

Tesla isn’t blowing up China sales, but weekly data so far shows a strong start to domestic sales there. But there are reports that Tesla Shanghai closed its doors for five days around the May Day holiday there. Reportedly, Tesla has also started offering some modest discounts on some Model 3 and Y stock vehicles in Europe.

BYD stock is in a range of early entry. LI stock is trying to recover key levels. XPeng and Nio stock face significant hurdles. Tesla stock is below all of its moving averages.

also, Arista Networks (network) on tap to report first-quarter earnings Monday night. Shares of ANET, a major supplier to the Meta and Microsoft platforms, found support in its 50-day streak last week.

Join IBD experts as they analyze actionable shares in the bullish stock market on IBD Live

Stock market rise

The stock market rally looked ugly on Tuesday but bounced back for gains in the major indices.

The Dow Jones Industrial Average rose 0.9% in last week’s trading on the stock market. The S&P 500 was up 0.9%. The Nasdaq Composite rebounded 1.3%. Small cap Russell 2000 fell 1.3%

The 10-year Treasury yield fell 12 basis points for the week, to 3.45%.

US crude oil futures fell 1.1% to $76.78 a barrel last week, even with Friday’s rebound of 2.7%. Gasoline futures fell 0.9% for the week, but 9.1% in the past two weeks.

Exchange Traded Funds

Among the ETFs, the Innovator IBD 50 ETF (fifty) sank 3.6% last week, with many components taking huge losses in earnings. The Innovator IBD Breakout Opportunities ETF (fit) increased by 0.3%. iShares Expanded Technology and Software ETF (IGV) sank 1.45%, with Microsoft a large IGV component. VanEck Vectors Semiconductor Corporation (SMH) decreased by 0.4%. AMD stock is a major SMH stock that also holds ON stock in the ETF.

Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(down 4.5% last week and the ARK Genomics ETF)ARKG) 5.3%. Tesla stock is the first stock to be held via Ark Invest’s ETF, as Cathie Wood has added more TSLA shares in the past few weeks. Ark also owns a small stake in BYD stock.

SPDR S&P Metals & Mining ETFs (XME) fell 1.6% last week. Global Infrastructure Development Fund X US (cradle) ended just above breakeven point. US Global Gates Foundation ETF (Planes) was down 1%, but it came off its lows. SPDR S&P Homebuilders ETF (XHB) increased by 2.2%. Energy Defined Fund SPDR ETF (xle) partially increased. SPDR Health Care Sector Selection Fund (XLV) fell 0.6% but rebounded from its lows. DXCM stock is a component of XLV.

SPDR Financial Selection Fund (XLF) fell by 0.15%, but rebounded to close less than 50 days. SPDR S&P Regional Banking ETF (KRE) fell 0.6%, but pared losses after hitting its worst level since late 2020. FRC stock is a property of KRE.

Top five Chinese stocks to watch now

Market rally analysis

The stock market rally had a solid week, with major indices testing support but eventually closing with solid gains.

The Nasdaq fell to its 50-day line on Tuesday, as First Republic spooked investors once again. The S&P 500 and Dow Jones are close to this level, reducing the 21-day lines by the middle of the week.

Even worse, the First Trust Nasdaq-100 Equal Weighted Index ETF (QQEW) and the Invesco S&P 500 Equalweight ETF (RSP) fell below the 50-day lines on Tuesday. The latter also slid below 200 as these ETFs continued to drop on Wednesday, even as Microsoft boosted the Nasdaq.

Meta shares and other tech giants fueled strong gains on Thursday. QQEW and RSP lag behind QQQ and SPY, respectively, but still work just fine. On Friday, indices rose modestly, with the RSP outperforming, as it was once again above the 50-day line.

The Nasdaq did not surpass the intraday high on April 18, but achieved its best close since September. The S&P 500 and Dow Jones topped their April peaks, with all major indexes near their 2023 highs.

The SMH chip ETF, which has fallen to its worst level since mid-March, has cut weekly losses but is still below the 50-day line. Some names, eg L Researchh (LRCX) and AMD stock, close entries are being prepared. But many of the chip plays saw bad selling, including some huge dips in earnings.

Huge profit losses among blue-chip stocks have been all too common in recent days. Market leadership remains tight. Many stocks are not flashing buy signals or are about to do so. Many of these are earnings on click, including AMD, floor and decoration (FND), InMode (INMD) and the ANET stock.

Apple stock looks stretched on the daily chart, but on the weekly chart, investors can see the top buy point of a long handle cup or double bottom bottom. The handle also appears as a three-week narrowing pattern, according to MarketSmith analysis.

After last week’s shake-up, the market’s rally may be poised for a stronger advance. If the major indices break out of their 2023 highs by any kind of amplitude, the market rally could have some room to run with headline earnings and the Fed meeting in the rearview mirror. However, stocks may hit resistance again in the coming days.

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What are you doing now

It was hard to get over the stock market rally.

Investors likely cut exposure in the past week as many stocks erased gains or flashed sell signals. Although the major indices closed higher, there were not many opportunities to consolidate positions. that’s ok. If the market rally really consolidates, these opportunities will come. If the indexes are thinly widened, you’ll be glad you’re mostly cash.

Add exposure gradually as conditions improve. Consider earnings reports.

While the rebound at the end of the week didn’t cause many breakouts and early entries, many stocks are starting to move into their positions. So have your watchlists ready.

Several blue chip stocks, including some big winners earlier in the year, have been flashing sell signals in the past week or so.

Read the big picture every day to stay in sync with market trend, leading stocks and sectors.

Please follow Ed Carson on Twitter at @employee For stock market updates and more.

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