Dow Jones Futures: Stocks Fall, Google, CRM Flash Buy Signals, Meta to Launch Twitter Rival Threads
Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. The stock rally fell slightly on Wednesday, amid rising government interest rates and a stronger dollar. Meta is about to launch its Twitter rival.
X
The major indices only went down. It was another quiet session on the major indexes, with Fed minutes having little impact. META repository, Google parent Alphabet (GOOGL) and Salesforce.com (CRM) generally offset weak breadth.
Meta platforms (META) will launch Instagram’s Twitter rival Wednesday night, joining Facebook and other social sites with more than 3 billion daily users. The Threads app debuts amid ongoing troubles for Twitter, now owned by Tesla (TSLA) CEO Elon Musk.
GOOGL stock and Salesforce flashed buy signals on Wednesday.
Meanwhile, Free market (MELI) is on the verge of an early entry.
The META share is on the IBD Leaderboard. Google stock is on SwingTrader. Google was Wednesday’s IBD Stock Of The Day.
The video embedded in this article discussed Wednesday’s market action and analyzed Google, Monday.com (MNDY) and Flow serve (FLS).
Dow Jones Futures today
Dow Jones futures were just below fair value. S&P 500 futures and Nasdaq 100 futures edged lower.
At 8:15 a.m. ET Thursday, investors will get the ADP Employment report for June. At 08:30 the Ministry of Labor will release weekly unemployment claims, with the ISM service index for June due at 10 a.m. ET. On Friday morning, the Labor Department will reveal its June jobs report.
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 on Wednesday
The stock rally saw some small declines in the major indexes, with small companies losing a bit more.
The Fed published minutes from the meeting on 13-14. June, but they offered few surprises. While holding off on rate hikes at that meeting, Fed officials favored more tightening. It’s something Fed chief Jerome Powell and other politicians have emphasized ever since.
The Dow Jones Industrial Average fell 0.4 percent in Wednesday’s trading. The S&P 500 index and the Nasdaq Composite lost 0.2%. The small-cap Russell 2000 fell 1.3%, ending a six-session winning streak.
US crude oil prices rose 2.9% to $71.79 a barrel. Saudi Arabia signaled it will do whatever it takes to raise prices. It comes after it announced on Monday that it would extend a voluntary production cut by another month, through August.
The 10-year Treasury yield jumped 9 basis points to 3.94%, a four-month high.
Amid rising US Treasury yields and weak economic data in Europe and Asia, the US dollar rose modestly, right around key levels.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.8%. The iShares Expanded Tech-Software Sector ETF ( IGV ) closed fractionally higher with the CRM stock a key component. The VanEck Vectors Semiconductor ETF ( SMH ) fell 1.9%.
ARK Innovation ETF ( ARKK ) reflected more speculative story stocks, falling 0.35% and ARK Genomics ETF ( ARKG ) fell 0.65%. TSLA stock is the No. 1 holding across Ark Invest’s ETFs.
The SPDR S&P Metals & Mining ETF ( XME ) fell 1.8%. The US Global Jets ETF (JETS) rose 0.3%. The SPDR S&P Homebuilders ETF ( XHB ) fell nearly 1%. The Energy Select SPDR ETF (XLE) fell 0.55% and the Health Care Select Sector SPDR Fund (XLV) closed just below break-even.
The Industrial Select Sector SPDR Fund ( XLI ) fell 0.5%.
The Financial Select SPDR ETF ( XLF ) lost 0.2%. The SPDR S&P Regional Banking ETF (KRE) gave up 1.3%.
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What are Meta Threads?
Meta’s new text-based threads are touted as a place where you can “follow and connect directly with your favorite creators and others who love the same things,” according to an App Store description. The Threads app shares many features with Twitter. It appears to allow users to “like” a post, reply or repost it.
Meta Platforms will launch its text-based Threads app at 7 p.m. PT Wednesday, moved up 12 hours from a planned debut at 7 a.m. PT Thursday. It has been on pre-order in the Apple App Store for a few days.
Meta CEO Mark Zuckerberg has previously used Instagram to crack down on rival social sites. Launched in 2016, Instagram Stories takes on Snapchat, owned by Snap (SNAP). Instagram Reels, unveiled in 2020, is an attempt to go after TikTok.
Other would-be Twitter rivals, such as Mastodon and Bluesky, have gained users but have yet to become major threats. The Threads app, which is expected to launch with a number of celebrities and other high-profile users, may be able to attract mass users quickly.
It will join an ecosystem of more than three billion daily users of at least one of Meta’s apps – Facebook, Instagram and WhatsApp. Threads will reportedly let people use their Instagram username to follow their current Instagram accounts on Threads.
Since Musk acquired Twitter for $44 billion last year, the social site has alienated advertisers and many users over a series of issues. For the past week, Twitter has imposed limits on how many tweets users can read. This “speed cap,” which is supposed to crack down on unauthorized data scraping and bots, affects unverified users more.
Meta Stock
META shares fell 2.9% to 294.37, hitting a 17-month high. It is well extended from any possible point of purchase.
Google shares
Google shares rose 1.5% to 121.75, rebounding from its 10-week moving average and breaking a downtrend in a brief consolidation. The shares also cleared the 21-day line. Investors can use the 21-day line, or the June 30 high of 121.08, as a specific entry. Volume was well below average on Wednesday.
GOOGL stock is on track to make a new base after this week.
Salesforce makes
CRM shares rose 1% to 213.82. Like Google, Salesforce bounced off its 10-week line and broke a brief downtrend. The stock has 225 buy points from a flat base, amid several weeks of tight weekly bars, according to MarketSmith analysis.
MercadoLibre shares
MELI shares jumped 4.5% to 1,247.36. Volume was above average and picked up as MercadoLibre stock moved higher. Shares in the Latin American e-commerce and payments giant cleared their 21-day moving average for the first time in a month, breaking a brief downtrend. But MELI stock stopped just below the 50-day line. A clear move during the 50-day would offer an early entry. MercadoLibre stock is working on a buy point of 1,365.64.
Remember that the MELI share has had a number of falls in above-average volume in recent weeks.
Market rally analysis
The major indices fell slightly on Wednesday after small increases on Monday. Meta platforms, Salesforce, Google shares and some other megacaps muted broader losses elsewhere.
Declines significantly outpaced gains on Wednesday, but many losers showed little damage. Generac (GNRC) and Aehr test systems (AEHR) was an exception, tumbling 8% and 11% in heavy volume.
The Invesco S&P 500 Equal Weight ETF ( RSP ) fell 0.4%, retreating from its best levels in more than four months.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.3% against a flat Nasdaq 100.
Steelmakers, base metal miners and casinos had a tough day. Some software leaders lost ground, but many recovered from lows during the day. Medical product companies had another tough session.
Travel games generally did well, or at least held up. So did industry.
After the market rally rebounded last week, stocks are faltering on pre-pullbacks. A longer break or a slight decline over several days or weeks can be constructive for the stock market rise. The Nasdaq composite closed 7% above its 50-day moving average, with the Nasdaq 100 7.9% above that key level. They are not extreme levels, but they are not far from being.
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What to do now
The market rally is going to do what it’s going to do. But investors may want to be wary of adding much exposure in the short term, given the high chances of sideways action or a renewed pullback.
In any case, not many stocks flashed buy signals on Wednesday, except for Google and CRM shares.
Many stocks are hovering around buy zones in a number of sectors, although many pulled back on Wednesday.
Work with these watchlists.
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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