Dow futures will reopen Sunday evening. Futures rose slightly on Friday while Treasury yields jumped after the March jobs report showed slowing employment and wage growth but also lower unemployment. while, Tesla (TSLA) cut US prices on all of its electric cars.
US stock markets were closed on Friday. Major indices have held up well in the short trading week, with mid-week pullbacks looking healthy and normal. But many major sectors and stocks sold off heavily, including Tesla shares.
The video embedded in this article discusses the weekly market movement and analyzes Google, BABA, and… Intuitive surgery (ISRG).
The Labor Department reported that non-farm payrolls rose by 236,000, just below the estimate of 240,000. This is down from the revised 326,000 in February.
Private payrolls only rose 189,000, well below the 223,000 views. Manufacturing jobs unexpectedly fell by 1,000.
The unemployment rate also surprised, dropping to 3.5%, back to its lowest levels in the long term. However, the labor force participation rate rose to the highest post-Covid level of 62.6%.
Hourly earnings were up 0.3% compared to February, in parallel. The annual gain cooled to 4.2%, below views of 4.3% and the lowest in years. Three-month annual wage gains slowed to 3.2%.
The average workweek has been unexpectedly shortened to 34.4 hours.
Although gains in wages and private employment have slowed, the odds of a Fed rate hike in May jumped to 67% Thursday from 49% on Wednesday.
Exxon Mobil (xom) held early acquisition talks with an oil shale company Pioneer Natural Resources (PXD), The Wall Street Journal It was reported on Friday, citing sources. PXD has a market capitalization of $49 billion.
McDonald’s (mcd) is cutting hundreds of jobs and reducing salary packages in a major restructuring, The Wall Street Journal I mentioned Friday. The fast food giant temporarily closed its offices on Monday and began notifying affected employees of layoffs.
Samsung Electronics will downgrade the memory chip to a “meaningful” level after first-quarter operating profit fell more than 95%, much more than expected. That could be good news for micron technology (mo).
Taiwan Semiconductor (TSM) March and first quarter sales report early on Monday.
Dow jones futures today
Dow futures rose 0.2% against fair value on Friday, reversing slight losses ahead of the jobs report. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.1%.
The 10-year Treasury yield jumped 12 basis points, to 3.41%. The 10-year yield hit a seven-month low Thursday.
Hong Kong and European markets will be closed on Easter Monday.
Dow futures will reopen at 6pm EST on Sunday, along with S&P 500 futures and Nasdaq futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Stock market rise
The stock market rally had a mixed week. The Dow Jones Industrial Average rose 0.6% in weekly stock market trading. The S&P 500 fell 0.1%. The Nasdaq fell 1.1% and the Russell 2000 fell 2.5%.
US crude oil prices jumped 6.65% to $80.92 a barrel, mostly on Monday, after a surprise OPEC+ production cut. Crude oil futures are up 20.9% in three weeks.
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Growth in ETFs
Among the ETFs, the Innovator IBD 50 ETF (fifty) sank 3.5% for the week. iShares Expanded Technology and Software ETF (IGV) fell 1.6%. Microsoft stock is one of IGV’s most important holdings. VanEck Vectors Semiconductor Corporation (SMH) gave up 4.1%.
Reflecting more speculative stories, the ARK Innovation ETF (ARK)ark(slip 4.4% and ARK Genomics ETF)ARKG) fell 1.2%, although both were higher on Thursday. Tesla stock is the number one stock ETF held by Ark Invest.
Tesla price cuts
Tesla slashed US prices on all of its electric vehicles overnight. It slashed the prices of the Model S and X for the third time this year, both by $5,000 in this case. The Model S starts at $84,990 while the Model X now starts at $94,990.
Meanwhile, Tesla cut prices for the American Model 3 by $1,000 to an entry price of $41,990. The Model Y is reduced by $2,000 to $49,990.
Earlier in the week, Tesla cut the Model 3 and Y prices in Australia again.
Tesla cut global prices in January, with more US discounts on its S and X cars and additional European discounts in March. That, along with new US electric vehicle credits, pushed Tesla’s first-quarter deliveries to a record high. But they fell short of FactSet’s views. Production again exceeded deliveries, with production of the Model S and Model X nearly twice as high as sales.
Many analysts predict that more Tesla price cuts are on the way to support demand, which will reduce profit margins.
Tesla cuts prices again after TSLA triggers the sell rule
Investors won’t get a chance to react to Tesla’s latest price cut until Monday. But Tesla stock fell 10.8% to 185.06 this week after the first-quarter delivery report. Shares fell below the 200.76 cup handle buy point and the 50-day moving average.
The base formed below the 200-day line, which is not significant. The buy point 200.76 is no longer valid, but TSLA stock is working on a new handle, which is already on the weekly chart, with an entry of 207.89. Of course, the 200-day line still looms just above that.
Tesla’s first-quarter earnings are scheduled for April 19, when investors will see how price cuts have affected margins so far.
Google stock jumped 3.8% Thursday to 108.42 in higher-than-usual trading volume. Shares rose above a cup handle buy point at 106.69 according to MarketSmith analysis.
The Google CEO said the company will add AI chat to its search engine shortly after Microsoft (MSFT) added ChatGPT to the Bing search engine and other products.
Alibaba shares rose 4.25% on Thursday to 102.74, breaking through the downtrend of the base of a cup with a handle, providing an early entry. The official handle buy point is 105.15.
BABA stock rose in the previous week after Alibaba said it would split into six different units with their own executives and the option to file for IPOs.
Stock market rally analysis
Investors should judge the validity of the market’s rally by the major indices and leading stocks. But those are giving some mixed signals. The main indexes look good. The Dow rose, the S&P 500 barely fell and the Nasdaq showed a normal constructive decline, reclaiming the 12,000 level on Thursday.
Google stock was strong in the week and Meta platforms (meta) continued to rise. apple (AAPL) And Microsoft shares were little changed, on the edge of buy territory. while, Exxon Mobil (xom), merck (Mrk) And United Health (United nations) made big weekly gains.
But there were a lot of big losers. Construction groups and industry-related groups fell on Tuesday while growth stocks sold off on Wednesday. Many suffered severe damage, while others could return to their positions relatively soon. Thursday’s bounces, mostly from key levels, were certainly encouraging.
Defensive growth and names had a strong week, including pharma, consumables and utilities.
Will the defensive growth stock rotation continue, or did Thursday mark the beginning of a growth rebound?
Much of that may depend on how markets respond to slow economic data. Investors cheered the weak economic reports, which could lead to an early Fed rate hike. But for the past week at least, markets have been more concerned about recession risks.
Dow futures and Treasury yields responded positively on Friday to the March jobs report, which showed slowing hiring and wage growth. But let’s see how the stock market rally reacts in real terms on Monday.
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What are you doing now
Investors may have wanted to reduce exposure last week. How likely it is depends on the shares they own.
If the leading stocks show strength in the coming days, investors can make some new purchases. But don’t ramp up exposure quickly and don’t focus too much on a specific stock or sector, especially one that is particularly volatile.
This is the time to build your watchlists. As the rotation continues, make sure you cast a wide net to discover medicines and other stocks that are getting stronger.
Read the big picture every day to stay in sync with the market trend, leading stocks and sectors.
Please follow Ed Carson on Twitter at @employee For stock market updates and more.
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