Dow Jones Futures Rise: Warren Buffett Stock Has New Buy Point; Nvidia leads revenue movers

Dow Jones futures rose slightly overnight, along with S&P 500 futures and Nasdaq futures. Nvidia (NVDA), Salesforce.com (CRM) and Snowflake (SNOW) led a busy night of earnings. —

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Share price gains rose slightly, although the major indexes again hit resistance at their 21-day moving averages. Investors do not want to commit heavily before Friday’s speech from Fed chief Jerome Powell.

Meanwhile, apple (AAPL), the top investment holding of Warren Buffett’s Berkshire Hathaway (BRKB), increased on Wednesday. AAPL stock now has a valid handle on a daily chart. Tesla ( TSLA ) is testing key levels as a 3-for-1 TSLA stock split takes place overnight.

Key income

NVDA shares, Salesforce and Snowflake provide insight into key technology sectors. Nvidia earnings provide insight into semiconductors, particularly the data center and gaming sectors. Salesforce revenue will signal demand for business software. So will research firm Snowflake, while the SNOW stock reaction gives an indication of investor demand for highly valued former technology leaders.

Nvidia revenue was roughly in line with reduced guidance as gaming revenue fell by a third, but data center revenue rose 61%. The chip giant guided lower on Q3 earnings. NVDA stock fell more than 4% in overnight trading. Nvidia shares rose 0.2% in Wednesday’s regular session to 172.22.

Salesforce revenue topped views, but the software giant guided low for the current quarter. Despite a new $10 billion buyback program, CRM shares fell sharply in extended action. Salesforce.com shares rose 2.3% to 180.01 on Wednesday.

Snowflake reported a bigger-than-expected loss for the second quarter, but beat its 83% revenue gain. SNOW shares rose overnight. Snowflake shares fell 4.2% to 160.28 on Wednesday, bouncing off the 50-day line after retreating in recent weeks.

Meanwhile, Splunk (SPLK), Box (BOX) and Autodesk (ADSK) added to a busy software lineup after the shutdown, with storage giant NetApp (NTAP) and household goods and furniture retailer Williams-Sonoma (WSM) also reports. Autodesk and NetApp rose overnight on the results, while Williams-Sonoma rose higher. Splunk and Box fell.

early Thursday, Dollar General (DG) and Dollar tree (DLTR) is on tap, with dollar store chains possibly in consumers’ favorite spot right now. The DG share and Dollar Tree are both around buy points.

Dow Jones Futures today

Dow Jones futures rose 0.2% relative to fair value, with CRM shares pulling blue chips. S&P 500 futures rose 0.3% and Nasdaq 100 futures rose 0.35%.

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

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Stock market rally

Share gains saw small to modest gains on Thursday, but the major indexes hit resistance again.

The Dow Jones Industrial Average rose 0.2% in Wednesday’s trading. The S&P 500 index rose 0.3 percent. The Nasdaq composite rose 0.4 percent. The small-cap Russell 2000 climbed 0.8%.

US crude oil prices rose 1.2% to $94.89 a barrel. The United States rejected Iran’s terms for a revived nuclear deal, meaning there is still no deal that would release Iranian crude onto world markets.

The prices of natural gas rose 1.5 per cent. Natgas futures fell 5% on Tuesday, retreating from 14-year highs.

The 10-year Treasury yield rose 5 basis points to 3.11%, the highest since June 29. It is up 24 basis points over four sessions. Markets are leaning towards a third straight rate hike of 75 basis points on 21 September. Fed chief Powell will of course speak on Friday, and a host of economic data will be released before the next interest rate decision.

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ETFs

Among the top ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 1.4%, while the Innovator IBD Breakout Opportunities ETF ( BOUT ) gained 0.4%. The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 0.6%. CRM warehouse is an important IGV component. VanEck Vectors Semiconductor ETF ( SMH ) was down 0.1%. Nvidia stock is a great SMH holding.

The SPDR S&P Metals & Mining ETF ( XME ) rose 2.1% and the Global X US Infrastructure Development ETF ( PAVE ) rose 0.6%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.75%. The Energy Select SPDR ETF (XLE) picked up 1.2%. Health Care Select Sector SPDR Fund (XLV) rose 0.1%

ARK Innovation ETF (ARKK) reflects more speculative stock stocks, returning 2.6% and ARK Genomics ETF (ARKG) 3.5%. Tesla stock is a large holding across Ark Invest’s ETFs.

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Apple stock

Apple shares rose 0.2% to 167.53, finding support from the 21-day line. The Dow Jones tech titan now has a buy point at 176.25 on a daily chart, with this entry already on a weekly chart. Apple officially sent out invitations for an event on September 7, with the iPhone 14 expected to be unveiled.

The relative strength line has reached new highs, reflecting AAPL stock’s outperformance compared to the S&P 500 index.

Berkshire Hathaway bought 3.9 million more shares in Q2 for a total of nearly 895 million shares.

That stake in the iPhone maker was worth $122.3 billion as of June 30, but Apple stock has risen significantly since then. AAPL shares made up 41% of Berkshire’s portfolio at the end of Q2.

Tesla shares

Tesla shares rose 0.2% to 891.29, but retreated after reclaiming the 200-day moving average intraday. TSLA stock has an aggressive entry at 944.10, just above near-term highs. The EV giant is some way off the official buy point of 1,208.10.

A 3-for-1 stock split is taking place overnight, so prices and buy points will adjust by Thursday’s open.

Market Rally Analysis

After dipping below the 21-day moving average on Monday, the major indexes are now hitting resistance at the short-term level. The small-cap Russell 2000 moved back above its 21-day line.

While the major indexes may swing Thursday on Nvidia, Salesforce, Snowflake and other big earners, the market rally appears to be waiting for Fed Chair Powell’s speech.

Stocks that have broken out or rebounded on bullish signals in recent days continue to trade well. But many are extended.

Meanwhile, the recent decline in the market is allowing many stocks, such as Apple, to make handholds.

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What to do now

There are stocks that have flashed buy signals in recent days, especially in the energy and electricity supplier area. However, the market upturn is in a retreat, and hits short-term resistance. Powell’s speech is likely to be a market catalyst. So investors should be cautious about adding much exposure until then.

But be ready. If the market rebounds higher following Fed Chair Powell’s comments, a number of buying opportunities could come to life. So an updated watchlist will be key. If the market falls, investors should be prepared to taper off.

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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