Dow Jones futures and Nasdaq futures experienced a slight decline early Friday, while S&P 500 futures remained relatively unchanged. The notable drop in Nike (NKE) following mixed earnings dominates the headlines. Additionally, impending inflation data from the Fed’s preferred gauge adds to the market’s anticipation.
Key Stocks in Focus: The stock market rebounded on Thursday, recovering from the previous day’s substantial sell-off. Apple (AAPL) observed a marginal dip, holding just above a crucial buy point. Apple ceased sales of specific Apple Watch models due to an ongoing patent dispute. Other stocks, such as Carnival Corp. (CCL), Google parent Alphabet (GOOGL), Microsoft (MSFT), Novo Nordisk (NVO), and Super Micro Computer (SMCI), are also under scrutiny.
Market Analysis: While the overall buying opportunities are limited, the market is maintaining stability. The suggestion is to hold steady, possibly considering partial profit-taking while awaiting the market’s next move. Noteworthy stocks like MSFT and CCL hold positions in various investment strategies.
Corporate Developments: Bristol Myers Squibb (BMY) announces the acquisition of Karuna Therapeutics (KRTX) for $14 billion. The surge in KRTX stock is attributed to the purchase, emphasizing the importance of the neuroscience drug developer. NetEase (NTES) experiences a significant drop in U.S. trading due to new gaming restrictions imposed by China, impacting other related sectors.
Dow Jones Futures Today: Dow Jones futures face a 0.25% decline, influenced by the negative performance of NKE stock. S&P 500 futures show a modest uptick, while Nasdaq 100 futures register a fractional loss. The 10-year Treasury yield drops to 3.86%, and crude oil futures see a slight increase. The impending PCE inflation readings and other economic data are expected to influence Dow futures and Treasury yields.
Nike Earnings Impact: Nike (NKE) stock experiences a substantial overnight decline of over 10% following mixed earnings results. While Nike surpassed earnings estimates, it lowered its sales forecast, citing weakening consumer spending. The stock’s current price is 0.9% higher at $122.53, still forming the right side of a lengthy cup base with a potential buy point of $131.31.
PCE Inflation Data: The November PCE price index, a key metric for the Federal Reserve, is anticipated on Friday at 8:30 a.m. ET. Economists expect a 0.1% decline from October, with the yearly gain forecasted to be 2.9%. The core PCE price index, the preferred inflation measure for the Fed, is projected to rise by 0.2%, with core PCE inflation likely to dip to 3.4%.
Stock Market Rally: Thursday witnessed a rebound in the stock market, with notable gains in major indexes. The Dow Jones Industrial Average climbed by 0.9%, the S&P 500 index bounced 1%, the Nasdaq composite jumped 1.3%, and the Russell 2000 surged by 1.7%. However, the market’s action on Thursday remains within the range of the previous day, making it challenging to draw definitive conclusions.
Conclusion and What to Do Now: While the stock market rally remains robust, the current scenario suggests limited buying opportunities. Considering the unclear short-term market trend post-Wednesday’s reversal, investors may opt to take partial profits. Watchlists for potential setups and developments in leading stocks should be actively maintained.
