Dow Jones futures were little changed Monday morning, along with S&P 500 futures and Nasdaq futures, heading into a huge week for earnings economic news.
The stock market rally continued to advance last week, with the Dow Jones and S&P 500 hitting fresh record highs on Friday. However, the Nasdaq struggled to advance after midday Wednesday.
Apple, Microsoft, Meta Platforms, Google parent Alphabet, Amazon.com, Advanced Micro Devices and Novo Nordisk headline an earnings tsunami in the coming week, with Microsoft arguably the most important.
Meanwhile, Federal Reserve will meet Tuesday-Wednesday. Policymakers will take no action, but could offer hints about when Fed rate cuts might start. Markets see a March rate cut as a tossup. It's also a busy week of economic data, including the December jobs report on Friday.
With all that, investors may want to wait until this deluge of news before significantly adding exposure.
Meta and NVO stock are on IBD Leaderboard. MSFT stock is on SwingTrader and IBD Long-Term Leaders. Google stock, Meta, Microsoft and Novo Nordisk are all on the IBD 50. Meta stock and Google are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures were just below fair value. S&P 500 futures edged higher and Nasdaq 100 futures rose 0.15%.
The 10-year Treasury yield declined to 4.1%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally enjoyed another week of solid gains. The Dow Jones Industrial Average rose 0.65% in last week's stock market trading. The S&P 500 index jumped 1.1%. The Nasdaq composite rose 0.9%, but finished in the lower half of its weekly range.
The small-cap Russell 2000 popped 1.75%, ending a four-week slide.
The Invesco S&P 500 Equal Weight ETF climbed 1.1%, near recent two-year highs.
The First Trust Nasdaq 100 Equal Weighted Index ETF advanced 0.5%, almost topping its record high.
Tesla, Humana and Intel plunged on grim guidance. But the upside is that this reined in earnings expectations somewhat heading into the coming week.
That helped cooled the Nasdaq, which was getting extended by Wednesday morning. At Friday's close, it was 5.2% above the 50-day line, no longer stretched but far from being so.
The 10-year Treasury yield rose 1 basis points to 4.16%, but moved above a sliding 50-day line.
U.S. crude oil futures jumped 6.5% to $78.01 a barrel, a two-month high.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF rose 1.2%, with Microsoft a huge component. The VanEck Vectors Semiconductor ETF advanced 0.6%, but closed near weekly lows. AMD is a major SMH holding.
SPDR S&P Metals & Mining ETF rallied 1.15% last week. U.S. Global Jets ETF leapt 5.6%. SPDR S&P Homebuilders ETF fell 1%. The Energy Select SPDR ETF rebounded 5.1% from a six-month low. The Health Care Select Sector SPDR Fund dipped 0.1%.
The Industrial Select Sector SPDR Fund climbed 0.9%. The Financial Select SPDR ETF jumped 1.9%.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 0.8% last week and ARK Genomics ETF rose 0.9%.
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Big Earnings To Watch
Apple, Microsoft, Google, Amazon and Meta are all trillion-dollar tech giants, while AMD is a big-cap chip leader.
Not only do these companies have well over $10 trillion in market cap combined, but their results and guidance will have a massive influence on chips, software and the broader market, covering everything from e-commerce to online advertising to cloud computing and, yes, artificial intelligence.
Microsoft may be the most important earnings report, given that it's a leader or player in so many hot tech fields, from AI to cloud computing but also business software, gaming and even cybersecurity. MSFT stock is once again the most valuable company, with a $3.002 trillion market cap. Apple stock fell back to $2.989 trillion.
Microsoft, Google and AMD report on Tuesday night, with Apple, Meta and Amazon due late Thursday.
Google, Amazon, Meta and Microsoft are all extended from buy points. Apple stock has flashed an early entry, not far from an official buy point.
Meanwhile, Novo Nordisk reports early Wednesday. Novartis is the leader in weight-loss drugs, along with Eli Lilly, which reports on Feb. 6. NVO stock is back in buy range, along with Eli Lilly, according to MarketSmith analysis.
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What To Do Now
The stock market rally just keeps advancing, with near-perfect economic data and generally strong earnings fueling gains.
However, with the Nasdaq nearly extended and a relatively limited number of stocks flashing buy signals right now, investors may want to see how the market handles the big earnings and economic news this coming week.
If you have stocks with earnings on tap, you have to decide whether to take partial profits, exit the position or let it ride. Also pay attention to stocks, including Apple, Microsoft, AMD and other giants, that could have a big impact on your holdings, as well as the market.
Stay engaged and remain flexible.
The coming days could generate a number of set ups and buying opportunities, so have your watchlists ready. On the flip side, a negative market reaction to this week's news could trigger sell signals. So have your exit plan up to date.
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