As the trading week commences, Dow Jones futures, alongside S&P 500 futures and Nasdaq futures, are set to open Sunday evening. Moody’s Investors Service delivered a late Friday announcement, shifting the U.S. sovereign outlook to negative from stable, citing concerns over high budget deficits and political polarization. This move, despite maintaining the AAA rating on U.S. sovereign debt for now, raises apprehensions about the country’s economic direction.
Market Rally and Breakouts:
The stock market rebounded strongly on Friday, recovering from Thursday’s dip, with major indexes surpassing October highs. Although market breadth remains a concern, leading stocks, including Nvidia (NVDA), Broadcom (AVGO), Taiwan Semiconductor (TSM), KLA (KLAC), and Lam Research (LRCX), displayed buy signals, showcasing strength in the chip sector. Notably, Nvidia and Datadog are featured on IBD Leaderboard, while Nvidia, Datadog, and MercadoLibre (MELI) are part of the IBD 50. DDOG stock is highlighted in the IBD Big Cap 20, and MercadoLibre was recognized as Friday’s IBD Stock Of The Day.
Earnings Winners and Opportunities:
Recent earnings winners, such as MercadoLibre, Roku (ROKU), and Datadog (DDOG), may present additional buying opportunities for investors. The emphasis is on identifying stocks that are setting up for potential gains.
Moody’s Outlook and Government Shutdown Concerns:
Late Friday, Moody’s Investors Service expressed concerns about the U.S. economic outlook, citing high budget deficits and political divisions. While maintaining the AAA rating on U.S. sovereign debt, Moody’s warned about the potential impact of persistently large deficits amid rising interest rates. The 45-day government funding measure expiring on Nov. 17 adds to uncertainties, with the possibility of a government shutdown looming.
Dow Jones Futures Today:
Dow Jones futures, S&P 500 futures, and Nasdaq 100 futures open on Sunday evening. Following Moody’s negative U.S. outlook, early indications from ETFs suggest a 0.1% drop for Dow Jones, S&P 500, and Nasdaq 100. The 10-year Treasury yield experienced a slight increase to 4.65%.
It’s essential to note that overnight movements in Dow futures and other indices may not necessarily predict actual trading activities during the next regular stock market session.
