Dow Jones futures rose modestly early Thursday, along with S&P 500 futures and Nasdaq futures. Salesforce.com jumped overnight on earnings. The Fed's favorite inflation report is on tap.
The stock market rally rose slightly Wednesday following Tuesday's follow-through day that confirmed the new uptrend. A softer-than-expected ADP Employment Report followed Tuesday's surprisingly weak job openings data.
In addition to Salesforce, fellow software makers CrowdStrike, Okta and Veeva Systems also reported, along with Pure Storage.
CRM stock and Okta were big winners overnight, indicating buying opportunities. Veeva, Pure Storage and CRWD stock also advanced.
Also overnight, Shopify rose sharply after Amazon announced a deeper integration between the two e-commerce giants. Amazon will launch the Buy with Prime app for Shopify, letting merchants offer shoppers the option to buy items using their Prime benefits.
Four "Magnificent Seven" stocks, Tesla, Amazon.com, Meta Platforms and Apple are all trading near the 50-day line that could offer entries.
META stock is on IBD Leaderboard.
PCE Inflation Report
The Commerce Department will release the July PCE price index, the Fed's favorite inflation gauge, at 8:30 a.m. ET Thursday.
Economists expect the Personal Consumption Expenditures price index and the core PCE to rise a modest 0.2% vs. June. The overall PCE inflation rate is seen climbing to 3.3% from June's 3%, due to tougher year-earlier comparisons. The core PCE inflation rate should tick up to 4.2%.
Fed chief Jerome Powell has said he's following a supercore inflation reading in the report: services prices excluding energy and housing.
Also at 8:30 a.m. ET, the Labor Department will release weekly jobless claims data. That comes ahead of the September jobs report on Friday. It follows the surprisingly weak job openings data on Tuesday and Wednesday's soft ADP Employment Report.
Dow Jones Futures Today
Dow Jones futures climbed 0.6% vs. fair value, with CRM stock a Dow component. S&P 500 futures advanced 0.35% and Nasdaq 100 futures rose 0.25%.
The 10-year Treasury yield fell slightly to 4.1%. Crude oil futures climbed about 1% to above $82 a barrel.
The PCE inflation report will likely swing Dow futures and Treasury yields before the open.
China factory activity contracted for a fifth straight month in August. The official manufacturing PM came in at 49.7, just below the break-even level. That was up 0.4 point from July and better than views for 49.4. The nonmanufacturing gauge dipped to 51 vs. 51.5 in July and 53.2 in June.
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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Key Earnings
CRM stock rose solidly in extended trade, signaling an entry above the 50-day line, after Salesforce earnings topped Q2 views and the business software giant guided higher. Salesforce rose 1.45% to 215.04 in Wednesday's regular session. CRM stock has a 238.22 buy point, according to MarketSmith analysis.
CRWD stock tilted higher. CrowdStrike earnings beat views, with the cybersecurity firm guiding up on EPS. CrowdStrike stock climbed 1.7% to 149.18 on Wednesday, just below the 21- and 50-day lines. A move above the Aug. 24 high of 155.55 would offer an early entry for CRWD stock in an emerging base.
OKTA stock surged overnight, signaling an early entry after the cybersecurity firm easily beat EPS views. OKTA stock rose 2.4% to 73.57 on Wednesday, bouncing from the 50-day line and retaking the 200-day. A strong move from these levels, perhaps topping the July 31 high of 76.94 would offer an early entry. OKTA stock has a 91.50 buy point.
VEEV stock rose modestly before the open after Veeva earnings slightly topped and the life sciences software maker gave mixed guidance. Shares edged down 0.2% on Wednesday to 192.59, still below the 50-day line. Veeva stock has a 211.95 flat-base buy point, but a move above the 50-day could offer an early entry.
PSTG stock climbed slightly overnight after Pure Storage slightly topped views. Pure Storage stock edged up 0.4% to 36.48 on Wednesday after hitting resistance at the 50-day line. The data storage firm has a flat base with a 39.19 buy point. A move above the Aug. 23 high of 38.49 would offer a slightly early entry.
Stock Market Rally
The stock market rally enjoyed modest gains Wednesday, adding to Tuesday's big advance.
The Dow Jones Industrial Average rose 0.1% in Wednesday's stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite advanced 0.5%. The small-cap Russell 2000 gained 0.4%.
U.S. crude oil prices rose 0.6% to $81.63 a barrel. Oil prices are up 3.5% in its five-session win streak.
The 10-year Treasury yield held at 4.12% after tumbling 9 basis points on Tuesday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF rose 0.6%. The iShares Expanded Tech-Software Sector ETF climbed 0.9%. CRM stock is a major IGV holding, with CrowdStrike also a component. The VanEck Vectors Semiconductor ETF advanced 0.5%.
Reflecting more-speculative story stocks, the ARK Innovation ETF gained 0.7% and ARK Genomics ETF added 0.8%. Tesla stock is the No. 1 holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF fell 0.3% and the Global X U.S. Infrastructure Development ETF edged up 0.2%. U.S. Global Jets ETF descended 0.7%. SPDR S&P Homebuilders ETF stepped up 0.9%. The Energy Select SPDR ETF moved up 0.5% and the Health Care Select Sector SPDR Fund nudged down 0.1%.
The Industrial Select Sector SPDR Fund gained 0.45%.
The Financial Select SPDR ETF rose a fraction. The SPDR S&P Regional Banking ETF fell 0.7%
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Megacaps To Watch
Tesla stock edged down 0.1% to 256.90. That just barely ended a three-day win streak, capped by Tuesday's 7.7% surge. TSLA stock did close just above a declining 50-day moving average. A move above Tuesday's high of 260.51 would offer an early entry. Tesla stock has a new base with a 299.29 buy point.
Federal prosecutors and the SEC are investigating a secret Tesla project described internally as a special home for CEO Elon Musk, The Wall Street Journal reported Wednesday evening, citing sources. Federal prosecutors are also looking into whether Tesla inflates the driving range of its EVs, something that has long been indicated in real-world testing.
Apple stock rose 1.9% to 187.65, reclaiming the 50-day line in slightly above-average volume. That's offering an early entry. AAPL stock has a 198.23 flat-base entry. On Tuesday, the Dow Jones tech giant announced it would hold an event on Sept. 12, where it's expected to unveil the Apple iPhone 15.
Meta stock fell 1% to 295.10, hitting resistance at the 50-day line. A clear move above the 50-day line would offer an early entry in an emerging consolidation.
AMZN stock edged up 0.1% to 135.07, just above the 21- and 50-day lines. Unlike the other three megacaps here, Amazon stock has been pulling back toward the 50-day line, where it's found support. A solid bounce here would offer an entry. Amazon stock has a short consolidation that could turn into a flat base. Investors could view that as a handle on a yearlong consolidation.
AMZN stock was little changed overnight, despite the Shopify news.
Market Rally Analysis
The stock market rally had a modest session after Tuesday's game-changing advance. That's just fine. If a confirmed uptrend is going to fail, it usually falters quickly. Instead, the major indexes held their 50-day lines Wednesday and moved a little higher.
The Russell 2000, which rebounded from a 200-day line test on Friday, ran up to touch its 50-day before closing just below that level.
Meanwhile, some more stocks offered buying opportunities. Tuesday offered just a handful of leading stocks flashing entries, mostly in the growth space. On Wednesday, a few more growth names tripped buy signals, but so did stocks from a variety of sectors.
Visa broke out while Uber Technologies, SLB, Atkore, Oceaneering Toll Brothers, Duolingo, Valaris and Howmet Aerospace flashed entries.
A lot of other names are setting up. So if this market rally shows more strength, expect a hefty number of buying opportunities from a variety of sectors.
Declining Treasury yields on weak economic data have been key to the market rally's revival. So Thursday's PCE inflation report and Friday's jobs report loom large for Treasury yields and the stock market rally.
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What To Do Now
Investors could and probably should have bought something on Tuesday's follow-through day. They could have added some more exposure on Wednesday.
Do so gradually as the market rally pulls you in. The big economic reports to end the week raise the risks for a pullback, especially given how soft labor data have fueled this week's advance.
But right now, this is a confirmed uptrend with leading stocks doing well. Have your watchlists up to date and ready to take advantage of the best opportunities.
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