Dow Jones futures were down slightly on Friday morning, while S&P 500 futures and Nasdaq futures saw modest gains. Earnings from companies like Coinbase, Roku, DraftKings, and Applied Materials made waves overnight.
The stock market showed strength despite declines in tech giants like Nvidia and Google parent Alphabet. Small cap stocks performed well, indicating strong market breadth. However, with bullish sentiment high and indexes slightly overextended, investors should approach new purchases with caution.
Coinbase, DoorDash, Trade Desk, Roku, Applied Materials, and DraftKings reported earnings on Thursday, with Coinbase, Roku, and DraftKings being significant holdings at Cathie Wood’s Ark Invest. Nvidia is featured on IBD Leaderboard, while DraftKings stock is on the Leaderboard watchlist, and the IBD 50 includes Nvidia, DraftKings, and DoorDash stock.
Dow Jones futures were down slightly, while S&P 500 futures and Nasdaq 100 futures were up. The 10-year Treasury yield saw a slight increase, while crude oil prices fell. The market anticipates the release of the January producer price index.
Coinbase’s earnings exceeded expectations, leading to a premarket surge in COIN stock. Roku also reported strong revenue and guidance, despite an in-line loss. DraftKings earnings were better than expected, and the company announced the acquisition of Jackpocket. Applied Materials beat earnings projections and provided an optimistic outlook. Trade Desk’s earnings were mixed, but the guidance was positive. DoorDash reported a wider-than-expected loss but saw tripled adjusted EBITDA and strong revenue.
The stock market rallied on Thursday, with notable gains in Meta Platforms and Tesla but declines in Google and Nvidia. The Dow Jones Industrial Average, S&P 500, and Nasdaq composite all saw gains. The Russell 2000 surged nearly back to yearly highs.
While the market rally persists, caution is advised due to extended indexes and stretched leading stocks. Nvidia’s upcoming earnings could have a significant impact on the market. Investors should evaluate portfolio concentration and consider taking profits in certain sectors or themes like AI. It is essential to continue monitoring the market direction and leading stocks through tools like iShares Expanded Tech-Software Sector ETF, VanEck Vectors Semiconductor ETF, ARK Innovation ETF, and ARK Genomics ETF.
In conclusion, while there are limited buying opportunities outside of earnings movers, staying vigilant and diversifying portfolios can help mitigate risks during times of extreme bullish sentiment. Keep monitoring market trends and leading stocks to make informed investment decisions.
