Dow Jones rises 1200 points in inflation report: Why the market rally may have room to run

Overnight Dow Jones futures were little changed, along with S&P 500 futures and Nasdaq futures.




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Thursday’s stock market rally rose after a CPI inflation report colder than expectedWith the Dow Jones up 1,198 points. Core and core price gains were less than expected, reinforcing the case for a slowdown in Fed rate hikes. Treasury yields and the dollar fell.

If inflation continues to subside, the Fed may choose to finish raising interest rates sooner than Fed Chairman Jerome Powell suggested last week.

Lots of big moves were in the defeated stocks. apple (AAPL), Microsoft (MSFT), a parent of Google the alphabet (The Google), the parent on Facebook meta pads (dead), Amazon.com (AMZN) And the Tesla (TSLA) were all big gainers on Thursday, but MSFT stock was the only one to move above the 50-day line. nvidia (NVDA), which has a higher market capitalization than META shares now, is up significantly after already retaking the 50-day streak, but it still needs a lot of work.

Several collapsed cloud software stocks boasted double-digit gains on Thursday. digital turbine (apps) to post a 61% gain after earnings, but that’s not a two-month high.

However, investors should definitely consider adding more exposure and looking for equity creation.

However, there weren’t many doable shares available on Thursday. But GlobalFoundries (GFS), Energy Enphase (ENPH), griffon (GFF), FirstSource Builders (BLDR) And the General motors (GMAll the different buy signals are flashing.

GM stock added to SwingTrader And it was Thursday IBD stock today. ENPH stock is in file IBD Leaderboard Watch List and he’s on List of 50 IBD.

Dow jones futures contracts today

Dow Jones index futures rose against fair value. S&P 500 and Nasdaq 100 futures declined.

The bond market will be closed Friday for Veterans Day. US stock markets will open as usual.

Bitcoin, which topped $18,000 at some point Thursday after crashing to a two-year low below $16,000 on Wednesday afternoon. But the cryptocurrency fizzled out to around $17,000 on Thursday night. Crypto lender BlockFi said it was temporarily halting withdrawals in the wake of FTX’s near collapse. Earlier this year, FTX reached a deal to acquire BlockFi.

Beijing has reported the most Covid cases for more than a year as a surge in infections across the country prompted new lockdowns. China’s new leaders urged more targeted “decisive” restrictions to control the spread of the disease.

Remember to work overnight in Dow Jones futures contracts and elsewhere that does not necessarily translate into actual circulation in the next regular session Stock market session.

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stock market rise

The stock market rally started strong and continued throughout Thursday, closing at session highs.

Dow futures rose ahead of the opening on the back of a surprising CPI inflation report. October consumer prices rose 0.4% or 0.3% excluding food and energy. The CPI inflation rate fell to 7.7%, the lowest level since January. Core inflation eased to 6.3% against views to remain at a 40-year high of 6.6%.

The bulls cheered and sighed after finally getting a positive inflation reading.

The Dow Jones Industrial Average jumped 3.7% on Thursday stock market trading. The S&P 500 index is 5.5%. The Nasdaq Composite Index jumped 7.35%. Small cap Russell 2000 jumped 6.1%.

The 10-year Treasury yield fell 32 basis points to 3.83%, the lowest in a month. The dollar suffered its biggest drop in several years, continuing its sharp losses last week.

Markets now see an 81% chance of a 50 basis point Fed rate hike in December. Before the CPI inflation report, there was still a solid chance of a five increase of 75 basis points. Notably, there is now a 50-50 chance of a rate hike of only a quarter point in February.

US crude oil prices rose 0.6% to $86.47 a barrel. Natural gas popping 6.4%.

Megacap shares

Apple stock jumped 8.9%, rebounding from its worst close in nearly four months. META stock jumped 10.25%, continuing a mini rally from bear market lows amid massive job cuts and other costs. Amazon stock jumped 12.2% from 30-month lows on Wednesday as the e-commerce giant announced a cost-cutting review.

Microsoft stock jumped 8.2 percent, breaking 50 days. Google stock jumped 7.6%, but remains well below the 50-day streak.

Tesla stock rebounded 7.4%, but it remained an inside day after falling to a two-year low on Wednesday.

Nvidia stock rose 14.3%, extending the recovery that began on October 13. Nvidia’s earnings are scheduled for November 16th.

ETFs

between the Best ETFsThe Innovator IBD 50 ETF (fifty) gained 3.1%. iShares Expanded Technology and Software Fund (ETF)IGV) is up 9.1%, with MSFT shares being a key component. VanEck Vectors Semiconductor Corporation (SMH) screamed 10.2% higher. NVDA stock is a big asset.

SPDR S&P Metals & Mining ETFs (XME) by 5.5% and the Global Infrastructure Development Fund (ETF) in the USA (cradle) 5.65%. US Global Gates Foundation (ETF)Planes) rose 4.9%. SPDR S&P Homebuilders ETF (XHB) raised the ceiling by 10.3%. SPDR Specific Energy Fund (SPDR ETF)XLE) by 2.2% and the Financial Select SPDR ETF)XLF) progressed by just over 5%. SPDR Healthcare Sector Selection Fund (XLV) rose by 2.5%.

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Shares reflect more speculative stories, the ARK Innovation ETF (see you) with 14.5% higher and ARK Genomics ETF (ARKG) 11.1%. Tesla stock is a major ownership across Ark Invest ETFs.


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Market Rise Analysis

The stock market rally made huge gains on the CPI inflation index. The S&P 500 and Russell 2000 both jumped above the 50-day moving averages, with the former surpassing recent and recent highs just shy of the 200-day moving average. Leading this bullish trend, the Dow Jones Industrial Average jumped from its 200-day line to its best level since August peaks.

The Nasdaq, the obvious slowdown in the market’s rally thus far, jumped past the 50-day line. Amazon, a lot of rickety big companies, and cloud stocks led the way, while Nvidia and other chips continued their recent rally, but mostly below buying grounds.

It was a Thursday procedure later Follow-up day On all major indices, with significant gains in trading volume on the New York Stock Exchange and Nasdaq. This provides more confidence in the stock market’s rally.

The CPI inflation report was just one data point, but it was what the Fed wanted and needed to see. Notably, there will be a few weeks before the next wave of Fed monetary reports. This points to a favorable backdrop for a market rally, at least during that period.

Positive follow-up would be the Nasdaq moving decisively above the 50-day line, breaking its October highs above 11200. The S&P 500’s rally above the 200-day would be a very strong signal.


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leading stock

There were not many blue-chips in their positions on Thursday. Some of the strong names seem to stretch, while Thursday’s big winners were mostly broken techs like Google that need a lot of repair work.

It is not clear which groups will lead the market’s rise. But there are a lot of interesting groups and sectors.

Pharmaceuticals such as biotech and health insurers, which led the market rally, ruled out big gains on Thursday or pulled back as riskier growth names were favored. Is this just a passing picture?

Defensive names had a rough walk, like Hershey (HSY) and stocks of other food products.

A wide range of housing-related stocks, including builders, suppliers and retailers, are liquidating bases or moving above long-term moving averages or trend lines. It includes Dr. Horton (DHI), Tempur Seely (TPX) and stock BLDR.

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Some other retailers, along with many restaurants and some consumer plays, are showing strength from Crocs (CROX) to me wing stop (wing) to GM stock. Some financial, lithium, solar, agricultural and steel stocks also look good, including steel dynamics (STLD), Albemarle (ALB), CF . Industries (CF), Charles Schwab (SCHW) and ENPH stock.

Some infrastructure companies are located in or near the purchasing areas, including Quanta Services (PWR).

Energy stocks, which didn’t do much on Thursday, may continue to lead.

Network stocks look strong, including Digi International (DGII). Some of the chip names sound interesting as the sector rebounds after a long slide. This includes GFS stocks, which are a bit higher than the early entries.

But for big companies like Apple, Microsoft and Tesla stocks, it may take some time before they top the list. The same is true of cloud software, with the risk that some may not recover for years, if ever.


Time to Market with IBD’s ETF Market Strategy


What are you doing now

The stock market rally showed strength on Thursday, and there is a plausible story that the bullish trend has legs after the October inflation report. But for now it’s just a story.

Ultimately, investors should focus on what the market is doing right now, by following the actions of major indexes and leading stocks.

This suggests it’s time to increase exposure, but don’t rush it. If this market upside has legs, there will be plenty of time to invest heavily.

The limited number of shares executed on Thursday was one of the reasons for not buying heavily. Investors can choose to buy a broad market or sector ETF, such as SPY or SMH.

But there are a lot of stocks and sectors that look interesting. Investors should update their watch lists.

Read The Big Picture Every day to keep up with the trend of the market, stocks and leading sectors.

Please follow Ed Carson on Twitter at Tweet embed For stock market updates and more.

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