Dow Jones Futures Drop: Google, CRM Flash Buy Signals, Meta Launches Twitter Rivals, Instagram Threads

Dow Jones futures fell slightly overnight, as did S&P 500 futures and Nasdaq futures. The stock market rally eased slightly on Wednesday on rising Treasury yields and a stronger dollar. Meta launched its Twitter rival on Wednesday night.




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The major indices are down a bit. It was another quiet session across the major indices with little impact from the Fed minutes. META stock, parent company of Google alphabet (GOOGL) and Salesforce.com (CRM) offset the generally weak breadth.

metaplatforms (META) launched Instagram’s Twitter rival on Wednesday night, joining Facebook and other social sites with over 3 billion daily users. The Instagram Threads app debuts amid ongoing troubles for Twitter, now owned by Tesla (TSLA) CEO Elon Musk. Meta shares were higher in extended trading.

GOOGL stocks and Salesforce issued buy signals on Wednesday. In the meantime, MercadoLibre (MELI) is about to make an early entry.

META stock is on the IBD Leaderboard. Google stocks are on SwingTrader. Google was the IBD stock of the day on Wednesday.

The video embedded in this article discussed Wednesday’s market action and analyzed Google, Monday.com (MNDY) and Flowserve (FLS).

Dow Jones futures today

Dow Jones futures were down 0.3% from fair value. S&P 500 futures fell 0.3% and Nasdaq 100 futures fell 0.35%.

The 10-year government bond yield rose to 3.95%.

Hong Kong’s Hang Seng tumbled 3% on the day on concerns among real estate developers.

Investors will receive the June ADP jobs report on Thursday at 8:15 am ET. At 8:30 a.m., the Department of Labor releases the weekly jobless claims. The ISM Services Index for June is released at 10:00 am ET. On Friday morning, the Labor Department will release its jobs report for June.

Keep in mind that nightly action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular trading session.


Join IBD experts as they analyze actionable stocks from the stock market rally on IBD Live


What are Meta’s Instagram 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 a description on the App Store. The Threads app shares many features with Twitter. It allows users to like, reply to, or repost a post. The search options are limited.

Meta Platforms launched its text-based Threads app Wednesday at 7:00 p.m. PT, 12 hours ahead of its scheduled debut Thursday at 7:00 a.m. PT.

Meta CEO Mark Zuckerberg launched Instagram Stories in 2016 to take on Snapchat, which is owned by snap (SNAP). Instagram Reels, introduced in 2020, aligns with TikTok.

Other potential Twitter competitors like Mastodon and Bluesky have gained users but have not yet become a major threat. The Threads app, which is rolling out to a number of celebrities and other high-profile users, could potentially attract mass users quickly.

It will join an ecosystem with more than three billion daily users of at least one of the meta apps – Facebook, Instagram and WhatsApp.

Since Musk acquired Twitter for $44 billion last year, the social site has angered advertisers and many users for a variety of reasons. Last week, Twitter introduced limits on how many tweets users can read. Unverified users are more affected by this “rate limiting” policy, which is said to prevent unauthorized data scraping and bots.

meta share

META stock rose 2.9% to 294.37, hitting a 17-month high. It is well expanded from every possible purchase point. Meta Platforms is up 1% in after-hours trading.

Stock market rally on Wednesday

The stock market rally saw slight declines in the major indices, with small caps losing a bit more. The minutes of the Fed meeting of 13-14. June offered few surprises. While Fed officials paused rate hikes at this meeting, they advocated more tightening. That’s something Fed Chair Jerome Powell and other policymakers have since emphasized.

The Dow Jones Industrial Average fell 0.4% in trading on Wednesday. The S&P 500 Index and Nasdaq Composite lost 0.2%. The small-cap Russell 2000 index fell 1.3%, ending a six-session winning streak.

US crude prices rose 2.9% to $71.79 a barrel. Saudi Arabia has signaled it will do whatever is necessary to support prices. This comes after the company announced on Monday that it would extend a voluntary production cut by another month through August.

The 10-year government bond yield rose 9 basis points to 3.94%, a four-month high.

On the back of rising US Treasury yields and weak economic data in Europe and Asia, the US dollar edged higher and neared key levels.

ETFs

Among growth ETFs, the innovator IBD 50 ETF (FFTY) fell 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) closed slightly higher with CRM stocks playing a key role. The VanEck Vectors Semiconductor ETF (SMH) fell 1.9%.

ARK Innovation ETF (ARKK) slipped 0.35% and ARK Genomics ETF (ARKG) fell 0.65%, reflecting more speculative story stocks. TSLA stock is Ark Invest’s #1 ETF.

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 almost 1%. The Energy Select SPDR ETF (XLE) slipped 0.55% and the Health Care Select Sector SPDR Fund (XLV) closed just below breakeven.

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) fell 1.3%.


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Google stock

Google shares rose 1.5% to 121.75, recovering from the 10-week moving average and breaking a downtrend in a brief consolidation. The shares also broke the 21-day moving average. Investors could use the 21-day moving average or 121.08 30th June high as a concrete entry point. GOOGL stock is on track to have a new base after this week.

Salesforce stock

CRM stock rose 1% to 213.82. Similar to Google, Salesforce descended from its 10-week moving average and broke a brief downtrend. According to MarketSmith analysis, the stock has a buy point of 225 on a flat basis amid several weeks of tight weekly closes.

MercadoLibre stock

The MELI share rose by 4.5% to 1,247.36. Volume was above average and increased as MercadoLibre stock rallied. Shares of the Latin American e-commerce and payments giant cleared its 21-day moving average for the first time in a month, breaking a brief downtrend. However, the MELI share remained just below the 50-day line. A clear move above the 50-day level would allow for an early entry. MercadoLibre stock is trading at a buy point of 1,365.64.

Keep in mind that MELI stock has suffered multiple falls with above-average volume over the past few weeks.

Analysis of the market rally

Major indices fell slightly on Wednesday after modest gains on Monday. Meta Platforms, Salesforce, Google stocks and a few other mega-caps cushioned broader losses elsewhere.

The relegated teams significantly outperformed the promoted on Wednesday, but many losers showed little damage. Generic (GNRC) and Aehr test systems (AEHR) were an exception, falling 8% and 11% respectively on strong volume.

The Invesco S&P 500 Equal Weight ETF (RSP) fell 0.4%, falling from its best level in more than four months.

The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) fell 0.3% versus a flat Nasdaq 100.

Steelmakers, base metal miners and casinos have had a rough day. Some leading software providers lost ground, but many managed to surpass their intraday lows. Medical device companies experienced another difficult session.

Travel games generally did well, or at least held up. This also applied to industry.

After the market rally revived last week, stocks are hesitant to pull back. A longer pause or slight drop over several days or weeks could be constructive for the stock market rally. The Nasdaq Composite closed 7% above its 50-day moving average, while the Nasdaq 100 was 7.9% above that key level. These aren’t extreme values, but they’re not far off either.


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What now

The market rally will do what it will do. However, given the high probability of sideways movement or renewed decline, investors may want to be cautious about adding larger exposure in the short-term.

Anyway, apart from Google and CRM stocks, there weren’t too many stocks giving buy signals on Wednesday.

Numerous stocks in various sectors are floating in the buy zone, although many fell on Wednesday.

Work on those watch lists.

Read The Big Picture daily to stay up to date on market direction and the leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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