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Dow Jones futures fell Thursday night, as did S&P 500 and Nasdaq futures, with the July jobs report looming on Friday morning. The stock rally had a strong Thursday, with the Nasdaq hitting an all-time high and the S&P 500 almost.
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Floor & Decor (FND), Cloudflare (REPORT), Carvana (CVNA) and Paylocity (PCTY) were the main profits after the close. FND and Cloudfare stock fell to record highs overnight. CVNA stock surged as Paylocity was shown above.
Growth stocks generally performed well on Thursday, although a new IPO Robinhood Markets (HOOD) fell when the free trading app announced a sale of HOOD shares a week after its IPO. HOOD stock is still up sharply this week.
Meanwhile, Apple (AAPL) and Microsoft shares tightened, consolidating after earnings and strong performance. Apple stock is arguably in the buy range now, but the iPhone maker and Microsoft (MSFT) are worth watching for future purchases.
The MSFT share is listed on IBD Leaderboard and IBD Long-Term Leaders. Floor & Decor and NET stocks are on IBD 50.
Jobs report
The Labor Department releases the July jobs report at 8:30 a.m. ET. Economists expect the non-farm payroll to increase by 900,000 with the unemployment rate falling to 5.7%. The July jobs report comes two days after the ADP jobs report estimated private employment increased by 330,000 last month, well below estimates.
A strong jobs report could encourage the Federal Reserve to start discussing cutting back on its massive asset purchases. A weak report could push the “type talk” beyond the September Fed meeting.
Dow Jones Futures Today
Futures contracts on Dow Jones fell 0.15% from fair value. S&P 500 futures fell 0.1% and Nasdaq 100 futures fell about 0.1%.
Expect the July jobs report to tip Dow Jones futures.
Keep in mind that overnight action on futures contracts on Dow and elsewhere doesn’t necessarily translate into actual trades in the next regular trading session.
Join the IBD experts as they analyze the exploitable stocks in the stock market rally on IBD Live
Thursday stock market rally
The stock rally posted solid gains, closing near session highs. The Dow Jones Industrial Average rose 0.8% in Thursday’s stock trading. The S&P 500 Index climbed 0.6%. The Nasdaq composite advanced 0.8%. The S&P 500 Small Cap Index climbed 1.8%.
Crude oil futures rose after falling sharply in the previous three days this week. The 10-year Treasury yield edged up for a third consecutive session.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.6%, while the Innovator IBD Breakout Opportunities ETF (BOUT) also rose 0.6%. The iShares Expanded Tech-Software Sector (IGV) ETF rose 0.9%, with MSFT stock being a major holding. The VanEck Vectors Semiconductor (SMH) ETF fell 0.1% as its stake AMD (AMD) retreated after jumping 30.5% in the previous six sessions.
The SPDR S&P Metals & Mining ETF (XME) fell 0.7% and the Global X US Infrastructure Development ETF (PAVE) edged up 0.4%. The US Global Jets ETF (JETS) rose 3.6%. The SPDR S&P Homebuilders ETF (XHB) rose 0.7%. The Energy Select SPDR ETF (XLE) gained 1.2% and the Financial Select SPDR ETF (XLF) gained 1.3%.
Reflecting more speculative historical stocks, ARK Innovation ETF (ARKK) rose 1.9% and ARK Genomics ETF (ARKG) rose 4.3%.
Five best Chinese stocks to watch
Robinhood Stock
HOOD stock fell 27% to 51.20, starting to close the gap after Wednesday’s huge move. Robinhood stock rose to 85 on Wednesday, closing 50% at 70.39. But everyone who bought HOOD shares on Wednesday is now down.
Robinhood announced Thursday morning that it would sell nearly 97.8 million shares on behalf of existing shareholders. This news came a week after HOOD’s IPO began trading.
While new IPOs are exciting, it’s usually best for investors to wait until the initial discovery of market prices. At some point, a new issue will settle in and form at least a short IPO base. Even then, buying an IPO stock is a high risk / high reward scenario.
HOOD stock fell on Thursday, but is expected to consolidate over several days or weeks.
Key turnover
Floor & Decor, Cloudflare, Carvana and Paylocity all top revenue views.
FND stock fell as part of the extended trade, but trading was limited. Shares of the flooring retailer rose 1.1% to 126.89 on Thursday, hitting a new high. The FND stock is well expanded from a point of purchase of 109.95 cups with handle.
NET stock fell nearly 6% overnight, with the networking and security software maker giving mixed indications. Shares were up 1.2% to 121.46, a record close. NET stock is extended from a buy point of 95.87.
Carvana shares jumped 9% at the end of the session. Shares climbed 1.8% Thursday to 337, but still within the range of a buy point of 323.49. CVNA stock could offer a profit spread buying opportunity on Friday morning.
Paylocity’s stock was shown at least slightly higher. PCTY stock rose 2.25% to 219.28 on Thursday, hitting a record high. Shares jumped 5.4% on Wednesday, as fellow human capital software maker Paycom software (PAYC) jumped on his report. But the best time to buy PCTY stock may have been when it broke 202.10 in late July from what was either an early entry or a double bottom buy point.
Time the market with IBD’s ETF market strategy
Apple broth
Apple shares edged up 0.1% to 147.06 on Thursday. Shares are extended slightly from a buy point of 137.17 on a cup base with handle within a larger consolidation. But it’s within range of this larger consolidation, with an entry of 145.19. Since hitting a record 150 on July 15, AAPL stock has moved sideways within a fairly narrow range. It’s not quite enough to be a tight pattern, but investors could use 500.10 as an alternate buying point.
Apple’s profits doubled in the last quarter as revenue increased 36%.
Microsoft actions
Microsoft stock climbed just over 1% to 289.52, a record close. Stocks are extended from a cup basis with a buy point of 263.29, according to MarketSmith analysis. Since the end of July, MSFT stock has traded tightly, but is not on track to form a tight trend so far. If the software and cloud computing giant could move sideways or drift downward for a few more weeks, it could form a new base and perhaps let the 50-day / 10-week lines catch up.
Microsoft’s profit growth has accelerated for four consecutive quarters, while sales gains have accelerated in the past three quarters.
Market rally analysis
The stock rally had a strong session. The Nasdaq hit an all-time high but is only 3.7% above its 50-day line. Action from Apple, Microsoft and other tech titans that took a hiatus for a few weeks helped the Nasdaq and the Nasdaq 100 avoid going long.
If Apple and Microsoft stocks take another run, the Nasdaq could quickly lengthen.
The S&P 500 moved closer to an all-time high with the Dow Jones not far behind. The Russell 2000 came back above its 21 day line, but remains stuck below its 50 day line. It was a positive day for the breadth of the market, but the rally remains relatively narrow, led by software and other technology.
When it comes to flagship stocks, there have been a few new buying opportunities. Square (SQ) followed and hit the top of his base. Hub Spot (HUBS) moved away from a base. Globant (GLOB) offset a consolidation. Meanwhile, many other growth names have continued to advance.
Among several winners, there were a few big losers, including Etsy (ETSY), DXC technology (DXC) and Turn (RVLV). This once again shows the importance of having a strategy to deal with profits.
Read The Big Picture every day to stay in tune with the market direction and major stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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