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Futures Rise With Inflation Data Due; When To Start Buying

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Dow Jones futures rose modestly in premarket trade, along with S&P 500 futures and Nasdaq futures, with Treasury yields falling. But the Fed’s favorite inflation report, the PCE price index, is on tap before Friday’s open.




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Nike (NKE) and Carnival (CCL) headline key earnings, with NKE stock surging before premarket trade.

The stock market rally attempt advanced for a second straight session on Wednesday, as Treasury yields reversed lower.

If the PCE inflation rates come in tame, and the market responds well again on Friday, aggressive investors could start nibbling, though waiting for a follow-through day makes a lot of sense too. That’s especially true with a likely government shutdown looming on Sunday.

A FTD to confirm the new uptrend could come as soon as next week.

Tesla (TSLA) is moving back toward a key level, with big news just ahead. Meta Platforms (META), Uber Technologies (UBER) and Arista Networks (ANET) are right on the cusp of buy points.

Nvidia (NVDA) has a little more distance to be actionable, but as the stock and company of 2023, its performance is likely critical for any renewed market rally.

Meta stock, Nvidia and Uber are on IBD Leaderboard. ANET stock is on the IBD 50. Nvidia stock is on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures rose 0.4% vs. fair value, with NKE stock providing a boost. S&P 500 futures climbed 0.4%. Nasdaq 100 futures advanced 0.6%.

The 10-year Treasury yield declined a few basis points to 4.56%, but off overnight lows.

Crude oil futures rose more than 1%.

Dow futures, oil prices and Treasury yields are sure to swing on the PCE inflation data.

Remember that premarket action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

PCE Inflation

The Commerce Department will release the August PCE price index at 8:30 a.m. ET. Economists expect the overall index to rise 0.5% vs. July, fueled by higher gasoline prices. The annual PCE inflation rate is forecast to climb to 3.5% vs. July’s 3.3%. But the core PCE price index is seen up 0.2% once again, with core inflation cooling to 3.9% from July’s 4.2%.

Earnings

NKE stock jumped nearly 10% early Friday after Nike earnings unexpectedly edged higher, though sales growth just trailed views. Nike stock edged up 0.2% to 89.63 on Thursday after hitting an 11-month low intraday.

Carnival (CCL) is up more than 2% even before releasing fiscal Q3 results. Analysts expect the first quarterly profit since the pandemic. CCL stock has been a big S&P 500 winner in 2023, but has been sliding since early July. Shares rose 3.3% on Thursday.


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Stock Market Rally

The Dow Jones Industrial Average rose 0.35% in Thursday’s stock market trading. The S&P 500 index advanced 0.6%. The Nasdaq composite and small-cap Russell 2000 climbed 0.8%

Crude oil prices declined 2.1% to $91.71 a barrel.

The 10-year Treasury yield fell 3 basis points to 4.6% after hitting a fresh 15-year high of 4.69% intraday.


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Stocks To Watch

TSLA stock on Thursday climbed 2.4% to 246.38. Shares are working back toward a 278.98 cup-with-handle buy point. The first big test is the 50-day line. A decisive retaking of that level could offer an early entry.

However, Tesla is expected to report third-quarter deliveries before the open on Monday, Oct. 2. They’re expected to fall vs. Q2’s record 466,140. Bulls are already looking ahead to hints fourth-quarter deliveries, which should be stronger, and renewed buzz of a Cybertruck event soon.

The Equal Employment Opportunity Commission sued Tesla, alleging widespread racist actions toward black workers and retaliating against those who spoke out.

Tesla stock rose just over 1% early Friday, nearing a test of the 50-day.

Meta stock rose 2.1% to 303.96 on Thursday, moving back above the 50-day after Wednesday’s intraday shakeout. Investors could use Thursday’s high of 306.33 as an aggressive entry just above the 50-day, with 312.87 as another early entry. The relative strength line is right at 52-week highs already, a bullish sign for Meta stock.

Shares rose 1% to about 307 early Friday.

Nvidia stock climbed 1.5% on Thursday to 430.89, moving toward its 50-day. Clearing that decisively could offer an aggressive entry for the AI chip leader as it works on a new base. NVDA stock rose just over 1% in premarket trade, still modestly below the 50-day.

ANET stock was up 1.6% Thursday to 184.43, bouncing from the 50-day to just above the 21-day and near a downward-sloping trendline. Volume was light, but Wednesday’s gain came in the heaviest trade this month. A little more strength would offer an early entry for Arista stock. Shares rose a fraction in the premarket.

Uber stock gained 2.2% to 46.14 on Thursday, above the 50-day and testing a short, steep trendline. The ride-hailing and food-delivery giant has a 49.49 buy point from a flat base, according to MarketSmith. But Thursday’s high of 46.58 could offer an early entry.

Uber stock climbed 1% early Friday.

What To Do Now

This is still a market correction until there’s a follow-through day. If the market rally has a positive reaction to the PCE inflation report, and not just a solid open, then investors could choose to nibble at some stocks early in the day. But any such positions should be small, with investors ready to get out just as quickly.

Waiting for an actual follow-through day, and how a possible government shutdown takes effect, also makes a lot of sense.

Either way, investors should be working hard on getting watchlists up to the date.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on X/Twitter at @IBD_ECarson and Threads at @edcarson1971 for stock market updates and more.

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