Dow Jones futures fell slightly Friday, along with S&P 500 futures and Nasdaq futures, as the 10-year Treasury yield moved above 4%. The December jobs report and the expected SEC approval of the first spot Bitcoin ETFs are in focus.
The stock market rally had a mixed but modestly weak Thursday. Bulls showed some fight, but the major indexes closed session lows as the 10-year Treasury yield neared 4%.
However, a lot of stocks are finding support at the 21-day, 50-day or 10-week lines.
Novo Nordisk broke out Thursday, while Eli Lilly backed off after clearing early entries to start 2024. Spotify and MercadoLibre rose bullishly off key levels.
Nvidia rose off its 10-week line. Tesla edged higher off its 10-week as it works on a handle.
NVO stock was added to IBD Leaderboard, joining Nvidia. Eli Lilly stock is on SwingTrader, with SPOT stock and MercadoLibre joining Thursday. MELI stock and Novo Nordisk are on the IBD 50. MercadoLibre was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.25% vs. fair value. S&P 500 futures declined 0.3% and Nasdaq 100 futures retreated 0.3%.
The 10-year Treasury yield rose several basis points to 4.0%, moving back above the 4% level as Fed rate-cut doubts creep in.
The December jobs report is sure to swing Dow futures and Treasury yields before the open.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Jobs Report
The Labor Department releases the December jobs report at 8:30 a.m. ET. Economists expect nonfarm payrolls to rise by 158,000, slowing from November's 199,000. The jobless rate is expected to tick higher to 3.8%. Average hourly earnings should climb 0.3% vs. the prior month and 3.9% vs. a year earlier, both cooling slightly vs. November.
At 10 a.m. ET, the December ISM services index is on tap. The consensus is for 52.7, steady vs. November and still signaling modest service-sector growth.
Markets still see a 64% that Fed rate cuts will start in March, but that's down from a near-lock only a week ago. Investors are betting on five quarter-point rate cuts, and maybe a sixth. For weeks, they've expected at least six cuts.
Spot Bitcoin ETFs
The SEC will approve spot Bitcoin ETFs as soon as Friday, according to multiple sources, with trading starting next week. Earlier reports pegged a Jan. 10 deadline for spot ETF approvals.
Spot Bitcoin ETFs would hold the actual cryptocurrency. Current Bitcoin ETFs, including ProShares Bitcoin Strategy ETF, track Bitcoin futures. Spot ETFs are seen attracting a lot more institutional support.
Cryptocurrencies and stocks such as crypto exchange CoinDesk and Bitcoin miner Marathon Digital have surged over the past year, especially the past three months, in anticipation of SEC approval of spot Bitcoin ETFs.
On Thursday, Bitcoin rose 3.6% to $44,463.40 after retreating solidly Wednesday from a 20-month high above $45,000. COIN stock rose 2.2%, back above its 21-day line after sharp losses over the prior three sessions. MARA stock soared 12.1% to 26.27 after reversing slightly higher Wednesday. Marathon hit a 52-week high of 31.30 on Dec. 27.
Early Friday, Bitcoin traded at $44,000. COIN stock and Marathon fell slightly before the open.
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Stock Market Rally
The stock market rally largely held its ground Thursday, after back-to-back losses of more than 1% on the Nasdaq to start 2024.
The Dow Jones Industrial Average edged higher in Thursday's stock market trading. The S&P 500 index sank 0.3%. The Nasdaq composite fell nearly 0.6%. The small-cap Russell 2000 slipped 0.2%.
The S&P 500 ended just below its 21-day moving average. The Russell 2000 hit resistance at the 21-day. The Nasdaq fell for a fifth straight session and is nearing the top of its July-early December range, with the 10-week line just below that.
A grim Mobileye outlook slammed auto chip plays, while another Apple downgrade was bad news for iPhone chipmakers.
A number of quality stocks made bullish moves into buy areas or at least setting up, but need the market to resume its advance to make much headway.
U.S. crude oil prices fell 0.7% to $72.19 a barrel.
The 10-year Treasury yield jumped 8.5 basis points to 3.99%, once again flirting with the 4% level.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF dipped 0.25%. The VanEck Vectors Semiconductor ETF sank 0.6%, even with Nvidia stock as its No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF climbed 0.8% and ARK Genomics ETF rose 1.1%. COIN stock is the No. 1 holding across Ark Invest's ETFs, while Tesla is still a major component. On Wednesday, Cathie Wood's Ark bought some TSLA stock while dumping some Coinbase shares.
SPDR S&P Metals & Mining ETF edged up 0.2% and the Global X U.S. Infrastructure Development ETF dipped 0.2%. U.S. Global Jets ETF bounced just over 2%. SPDR S&P Homebuilders ETF stepped down 0.2%. The Energy Select SPDR ETF retreated 1.75%.
the Health Care Select Sector SPDR Fund climbed 0.5%. LLY stock is s key holding.
The Industrial Select Sector SPDR Fund nudged 0.1% higher.
The Financial Select SPDR ETF was up 0.4%.
Tesla Vs. BYD: TSLA Finds Support As Rival Wins EV Crown
Novo Nordisk, Eli Lilly
Novo Nordisk stock popped 3.9% to 107.63, powering past a 105.69 flat-base buy point, according to MarketSmith analysis. The relative strength line for NVO stock has rebounded since mid-December back toward highs. Novo Nordisk announced two deals Thursday to bolster its obesity-drug franchise.
Eli Lilly stock fell 0.5% on Thursday to 614.50 after briefly topping a 629.97 flat-base buy point. LLY stock topped resistance near 600 on Wednesday and breaking above the 50-day line on Tuesday.
Eli Lilly announced a direct-to-consumer online site.
Spotify, MercadoLibre
Spotify stock gained 2.5% on Thursday to 192.58, rebounding from near the 10-week line, retaking the 21-day and breaking a short downtrend. All that offered an early entry in what could be an emerging flat base above a prior cup-with-handle base. Spotify peaked at 202.88 on Dec. 6, within the 20%-25% profit-taking zone.
MELI stock rose 1.3% to 1,519.38, bouncing from the 50-day line. Investors could have used that as an aggressive entry, or wait for shares to clear their 21-day line. MercadoLibre is on track to forge a flat base after Friday's close with a 1,660 official buy point. That would be part of a base-on-base pattern.
Nvidia Stock
Nvidia edged up 0.9% to 479.98, rebounding to just above a rising 10-week line but hitting resistance at the 21-day. Shares are working on a 505.48 flat base buy point forged around the top of a double-bottom base. A move above 500 could offer an early entry into NVDA stock.
Tesla Stock
TSLA stock dipped 0.2% to 237.93, essentially on the 10-week line, after Wednesday's 4% slump. Tesla set record deliveries in Q4. But analysts are focusing on Q4 earnings and the profit outlook for 2024, after a year of Tesla price cuts and an increasingly lackluster climate for EV sales generally.
Thursday night, Tesla reduced the estimated range on its Model Y Long Range and Performance variants by about 6%. The Long Range is down to 310 miles from 330, and the Model Y Performance to 285 miles from 303. The RWD variant remains 260 miles.
Tesla has consistently fared poorly in real-world range tests.
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Market Rally Analysis
If you're an aggressive trader, you could have nibbled at some leading stocks making bullish moves.
But the market fading into the close wasn't a great sign, weighing on morning winners like LLY stock. If the market pullback continues, more promising new buys will turn into quick losers.
Still, investors should be building up their watchlists. If the market does rev higher in the next several days, you want to be ready.
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