Dow Jones Futures: Market Rally Rebounds Into Jobs Report; Google, Alibaba Flash Buy Signals

Dow Jones futures edged lower overnight, along with S&P 500 futures and Nasdaq futures. All eyes will be on the March jobs report on Friday morning, but the US stock markets will be closed.

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The stock market rally ended a deceptively tough week. The main indices were mixed for the week. All look relatively normal or healthy, especially with Thursday’s pullback from lows.

But many leading stocks suffered heavy losses, although 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 after big weekly losses.

Google Parent Alphabet (GOOGL) staged a breakout Thursday, while China’s e-commerce giant Ali Baba (BABA) flashed an aggressive post.

Google stock is on the IBD Long-Term Leaders.

The video embedded in the article discussed the weekly market action and analyzed Google, BABA shares and Intuitive surgical (ISRG).

Job report

The Labor Department will release the jobs report for March at 8:30 a.m. ET. Economists expect to see non-agricultural payrolls up 238,000, down from February’s 311,000, but still relatively high. Unemployment must remain at 3.6%. Hourly earnings rose 0.3% compared to 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 ended April 1 came in at 228,000, well above the number of views for 201,000. Claims for the previous week were revised up by 48,000 to 246,000, amid large seasonal adjustments.

The number of vacancies fell in February to the lowest in almost two years, although they are still relatively high. Private wage 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.

After months of cheering on any signs of economic weakness, investors in recent days are suddenly worried about recession risks. Bank problems will almost certainly slow down lending, putting a further brake on the economy.

Dow Jones Futures today

Dow Jones futures fell 0.2% relative to fair value. S&P 500 futures and Nasdaq 100 futures fell 0.1%.

The US stock markets will be closed on Friday for Good Friday.

Dow Jones futures will trade only until 9:15 a.m. ET, leaving little opportunity for U.S. investors to react to the jobs report until Monday. But European markets will trade until noon ET.

Keep in mind that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock market rally

The stock rally had a mixed week for the major indices and volatile action in leading shares.

The Dow Jones Industrial Average closed just above break-even in Thursday’s trading. The S&P 500 index rose 0.4 percent. The Nasdaq composite rose 0.8 percent. The small-cap Russell 2000 rose 0.1%.

For the holiday-shortened week, the Dow Jones rose 0.6% while 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 on the week, with most of those gains coming on Monday after the surprise OPEC+ production cut. Crude oil futures have risen 20.9% over the past three weeks.

The 10-year Treasury yield fell 22 basis points for the week to 3.28%, hitting a seven-month low.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 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 shares a key component. The VanEck Vectors Semiconductor ETF ( SMH ) fell 4.1%.

Reflecting more speculative storied stocks, the ARK Innovation ETF ( ARKK ) fell 4.4% this week and the ARK Genomics ETF ( ARKG ) 1.2%, though both retreated on Thursday. Tesla stock is a large holding across Ark Invest’s ETFs.

The SPDR S&P Metals & Mining ETF ( XME ) retreated 3.4% this week and the Global X US Infrastructure Development ETF ( PAVE ) fell 5.7%. The US Global Jets ETF (JETS) fell 2.7 percent. The SPDR S&P Homebuilders ETF (XHB) returned 4.8%.

The Energy Select SPDR ETF (XLE) rose 2.6% and the Health Care Select Sector SPDR Fund (XLV) rose 3.1%.

Bank stocks retreated on Thursday, but had a tough week. The Financial Select SPDR ETF ( XLF ) fell 0.5% for the week. The SPDR S&P Regional Banking ETF ( KRE ) fell 2.8%, recovering Thursday from a two-year closing low. JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) all report on April 14, along with super regionals PNC Financial (PNC) and fought First Republic (FRC).

Top five Chinese stocks to watch now

Google shares

Google rose 3.8% Thursday to 108.42 on above-average volume. Shares cleared a cup-with-handle buy point of 106.69, according to MarketSmith analysis, hitting their best level since September. GOOGL stock is a long-term leader, but looks a bit extended from key moving averages to initiate a position as an LTL.

Google’s CEO said the company will soon add a chat AI to its search engine Microsoft (MSFT) added ChatGPT to its Bing search engine and other products.

Alibaba shares

Alibaba shares rose 4.25% on Thursday to 102.74, breaking the downtrend to a handle, giving an early entry to 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 correct. Still, 105.15 is another possible entry.

BABA shares rose last week after Alibaba announced plans to split into six different entities with their own CEOs and the possibility of filing for IPOs.

Tesla shares

Tesla shares fell 10.8% to 185.06 for the week after record Q1 deliveries that missed views. Shares dipped below a 200.76 cup buy point with handle and 50-day moving average.

The base had formed below the 200-day line, which is not good. The 200.76 buy point is no longer valid, but TSLA stock is working on a new handle, already found on a weekly chart, with an entry at 207.89. Of course, the 200-day line is still slightly above that. Ideally, stocks will consolidate for a longer period, so that the 200-day trend is approaching the official buy point.

Tesla earnings for the first quarter are due on April 19.

Market rally analysis

The share rise had a normal and healthy decline in the major indices during the week.

The Nasdaq lost some ground, but regained the 12,000 level on Thursday. The S&P 500 just edged lower while the Dow Jones edged higher, driven by energy and medical names.

Megacaps did well. Google shares had a solid week and Meta platforms (META) continued to rise. apple (AAPL) and Microsoft shares were little changed, on the edge of buy zones. Meanwhile, Exxon Mobil (XOM), Merck (MRK) and UnitedHealth (UNH) had big weekly gains.

But there were many big losers during the week. Construction and industrials-related groups fell on Tuesday, while growth stocks sold off on Wednesday. Many suffered significant damage, while others were able to move back into position relatively quickly. Thursday’s bounces, often from key levels, were definitely encouraging.

Defensive growth and defensive names had a strong week, with medicines, consumer goods and utilities showing strength.

Will these areas continue to do well if a “risk-on” mentality returns?

The stock market is not quite sure what to do with weaker economic data. In recent days, investors have suddenly become more afraid 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 it was “obvious” that the market had a healthy break this week — or that it was “obvious” that leading stocks were flashing big warning signs.

But investors do not have hindsight – or foresight. All you can do is pay attention to what the market is doing now. And right now, the market recovery has given some mixed signals.

Investors may be slightly to moderately exposed to the market, depending on how their positions perform.

If you increased your holdings of growth stocks significantly early in the week, Wednesday’s losses would have been painful. This is especially true if you were heavily concentrated in hard-hit stocks.

Building up exposure gradually in several different managers will limit your downside, while providing plenty of opportunities for big wins.

Investors may have reduced exposure this week simply from exiting losing positions or taking profits.

If you were shaken out of some stocks, that’s OK, even if they soon bounce back.

Buy and sell rules are not designed to work every time, but to give you the best chance 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 watch lists over the weekend.

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

Follow Ed Carson on Twitter at @IBD_ECarson for stock exchange updates and more.

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