Dow Jones futures tilted lower overnight, along with S&P 500 futures and Nasdaq futures. All eyes turn to the March jobs report Friday morning, but U.S. stock markets will be closed.
XThe stock market rally closed out a deceptively tough week. The major indexes were mixed for the week. All are looking relatively normal or healthy, especially with Thursday's rebound off lows.
But many leading stocks suffered sharp losses, though they generally found support on Thursday. Some suffered minor damage while others may need some more repair work. Tesla (TSLA) is somewhere in the middle following big weekly losses.
Google parent Alphabet (GOOGL) staged a breakout Thursday, while China e-commerce giant Alibaba (BABA) flashed an aggressive entry.
Google stock is on the IBD Long-Term Leaders.
The video embedded in the article discussed the weekly market action and analyzed Google, BABA stock and Intuitive Surgical (ISRG).
Samsung Electronics said it will cut memory-chip production to a "meaningful level" after reporting Q1 operating profit plunged more than 95% vs. a year earlier, far below views. The move could be good news for other memory-chip makers, including Micron Technology (MU).
Jobs Report
The Labor Department will release the March jobs report at 8:30 a.m. ET. Economists expect to see nonfarm payrolls up 238,000, down from February's 311,000 but still relatively high. The jobless rate should hold at 3.6%. Hourly earnings rose 0.3% vs. February with the annual gain cooling to 4.3%.
The jobs report follows several other indications that labor markets and the overall economy are slowing. Initial jobless claims for the week that ended April 1 came in at 228,000, far above views for 201,000. Claims for the prior week were revised up by 48,000 to 246,000, amid big seasonal adjustment revisions.
Job openings fell in February to their lowest in nearly two years, though they remain relatively high. Private payroll growth slowed far more than expected, to 145,000 in March, ADP estimated.
Meanwhile, the ISM manufacturing index pointed to a deeper contraction while the ISM services index signaled much-slower growth, with various sub-gauges reinforcing the weaker economy narrative.
After months of cheering any signs of economic weakness, investors in recent days suddenly are worried about recession risks. Banking woes will almost certainly slow lending, providing a further brake on the economy.
Dow Jones Futures Today
Dow Jones futures fell 0.15% vs. fair value. S&P 500 futures and Nasdaq 100 futures dipped 0.1%.
U.S. stock markets will be closed on Friday in observance of Good Friday.
Dow Jones futures will only trade until 9:15 a.m. ET, not providing much opportunity for U.S. investors to react to the jobs report before Monday. But European markets will trade until noon ET.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally had a mixed week for the major indexes and volatile action in leadings stocks.
The Dow Jones Industrial Average closed just above break-even in Thursday's stock market trading. The S&P 500 index climbed 0.4%. The Nasdaq composite rose 0.8%. The small-cap Russell 2000 edged up 0.1%.
For the holiday-shortened week, the Dow Jones rose 0.6% while the S&P 500 dipped 0.1%. The Nasdaq fell 1.1% and the Russell 2000 slumped 2.5%.
U.S. crude oil prices jumped 6.65% to $80.92 a barrel during the week, with most of those gains coming Monday after the surprise OPEC+ production cut. Crude futures have surged 20.9% over the past three weeks.
The 10-year Treasury yield tumbled 22 basis points for the week to 3.28%, hitting seven-month lows.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) tumbled 3.5% for the week, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 2.8%. The iShares Expanded Tech-Software Sector ETF (IGV) fell 1.6%, with Microsoft stock a major component. The VanEck Vectors Semiconductor ETF (SMH) slumped 4.1%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) shed 4.4% this week and ARK Genomics ETF (ARKG) 1.2%, though both bounced on Thursday. Tesla stock is a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF (XME) retreated 3.4% this week and the Global X U.S. Infrastructure Development ETF (PAVE) tumbled 5.7%. U.S. Global Jets ETF (JETS) shed 2.7%. SPDR S&P Homebuilders ETF (XHB) gave up 4.8%.
The Energy Select SPDR ETF (XLE) rose 2.6% and the Health Care Select Sector SPDR Fund (XLV) rallied 3.1%.
Bank stocks bounced back Thursday, but had a rough week. The Financial Select SPDR ETF (XLF) dipped 0.5% for the week. The SPDR S&P Regional Banking ETF (KRE) slumped 2.8%, rebounding Thursday from a two-year closing low. JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) all report on April 14, along with superregional PNC Financial (PNC) and embattled First Republic (FRC).
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Google Stock
Google popped 3.8% on Thursday to 108.42 in above-average volume. Shares cleared a cup-with-handle buy point of 106.69 according to MarketSmith analysis, hitting its best level since September. GOOGL stock is a Long-Term Leader, but looks a little extended from key moving averages to start a position as an LTL.
Google's CEO said the company will add a chat AI to its search engine soon, after Microsoft (MSFT) added ChatGPT to its Bing search engine and other products.
Alibaba Stock
Alibaba stock rose 4.25% on Thursday to 102.74, breaking the downtrend of a handle, offering an early entry into the e-commerce and cloud-computing giant. The new handle is just above the 50-day line but is fractionally too low in the consolidation to be considered proper. Still, 105.15 is another possible entry.
BABA stock surged in the prior week after Alibaba announced plans to split into six different units with their own CEOs and the option of filing for IPOs.
Tesla Stock
Tesla stock tumbled 10.8% to 185.06 for the week following record Q1 deliveries that fell short of views. Shares plunged below a 200.76 cup-with-handle buy point and the 50-day moving average.
The base had formed below the 200-day line, which is not great. The 200.76 buy point is no longer valid, but TSLA stock is working on a new handle, already present on a weekly chart, with a 207.89 entry. Of course, the 200-day line is still slightly above that. Ideally, shares would consolidate for a longer period, letting the 200-day drift closer to the official buy point.
Tesla earnings for the first quarter are due April 19.
Market Rally Analysis
The stock market rally had a normal and healthy pullback on the major indexes during the week.
The Nasdaq lost some ground, but recovered the 12,000 level on Thursday. The S&P 500 just edged lower while the Dow Jones moved higher, buoyed by energy and medical names.
Megacaps fared well. Google stock had a solid week and Meta Platforms (META) kept rising. Apple (AAPL) and Microsoft stock were little changed, at the edge of buy zones. Meanwhile, Exxon Mobil (XOM), Merck (MRK) and UnitedHealth (UNH) had big weekly gains.
But there were a lot of big losers during the week. Construction and industrial-related groups tumbled Tuesday while growth stocks sold off Wednesday. Many suffered significant damage, while others could move back into position relatively soon. Thursday's rebounds, often from key levels, were definitely encouraging.
Defensive growth and defensive names had a strong week, with medicals, consumer staples and utilities showing strength.
Will those areas continue to do well if a "risk-on" mentality returns?
The stock market isn't quite sure what to make of weaker economic data. In recent days, investors have suddenly grown more fearful of a recession. Market reactions to economic data may remain in flux for some time.
Time The Market With IBD's ETF Market Strategy
What To Do Now
In a few days or weeks, investors may look back and say that it was "obvious" that the market had a healthy pause this week — or that it was "obvious" that leading stocks were flashing major warning signs.
But investors don't have hindsight — or foresight. All you can do is pay attention to what the market is doing now. And right now, the market rally has been giving some mixed signals.
Investors can be slightly to moderately exposed to the market, depending on how their positions are doing.
If you significantly ramped up your growth stock holdings early in the week, Wednesday's losses would have been painful. That's especially true if you were heavily concentrated in hard-hit stocks.
Building up exposure gradually in several diverse leaders will limit your downside while still offering plenty of opportunities for big gains.
Investors may have reduced exposure this week simply from exiting losing positions or taking profits.
If you got shaken out of some stocks, that's OK, even if they soon bounce back.
Buy and sell rules aren't designed to work every time, but to give you the best odds of success over time.
If this market rally moves higher again, many stocks will flash buy signals again, including some that staged shakeouts this week. So work on your watchlists over the weekend.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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