Dow Jones futures will begin trading on Sunday night, along with S&P 500 futures and Nasdaq futures. Warren Buffett issued his annual shareholder letter on Saturday. berkshire hathaway (BRKB) revenue.
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This week's stock market rally was fueled by: Nvidia (NVDA) Earnings and guidance to advance the role of AI. The S&P 500 and Dow Jones are at new all-time highs, and the Nasdaq Composite is nearing it. Nvidia itself has soared and reached new milestones.
Advanced Micro Devices (AMD), lenner (Len), Manhattan Associates (man), microsoft (MSFT) and Mongo DB (MDB) is a set or potentially viable stock. AMD stock, MongoDB, and Microsoft are major players in AI.
Still, investors should be cautious about new purchases, especially in AI stocks right now. Even if there is a lull on Friday, the market's rally is poised to extend further. Many of the hot stocks, including Nvidia, have seen significant growth. A prolonged hiatus or decline in the stock market could be constructive.
Nvidia stock is listed on the IBD Leaderboard. Microsoft stock is listed on SwingTrader and IBD Long-Term Leaders. Nvidia, Microsoft, and MongoDB are included in IBD 50. Nvidia, MongoDB, AMD, and Manhattan Associates stocks are included in the IBD Big Cap 20.
The video embedded in this article describes the big market week and includes analysis of Lennar, Manhattan Associates, and AMD stocks.
warren buffett letter
In Warren Buffett's annual letter to shareholders, the billionaire believes there are few opportunities to deploy capital domestically or internationally, and no opportunities for “remarkable performance.” said.
Berkshire's cash holdings rose from $157 billion in the third quarter to a new record $167.6 billion in the fourth quarter as Buffett failed to find any big investment opportunities.
Berkshire Hathaway's earnings
Berkshire Hathaway's operating income rose 28% year over year to $8.48 billion. Fourth-quarter operating earnings per Class A share increased 30% to $5,881, beating the FactSet consensus of $5,717.
Berkshire repurchased $2.2 billion worth of stock in the fourth quarter and $9.2 billion worth of stock for the year.
Berkshire Hathaway Class B stock rose 2.8% to 417.22 last week, hitting a new all-time high and marking its sixth consecutive week of gains.
Dow Jones futures today
Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, open at 6pm ET on Sunday.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
stock market rise
Stock market gains extended the decline into the beginning of the week, but Nvidia rebounded.
In stock market trading last week, the Dow Jones Industrial Average rose 1.3% and the S&P 500 rose 1.7%, both hitting new record highs. The Nasdaq Composite Index rose 1.4%, hitting a two-year high, but closed Friday just below the 16,000 level. It is also just below its late 2021 peak.
The small-cap Russell 2000 fell 0.8%, but remains within its range from late last year.
All of these indexes have recovered from near their 21-day exponential moving averages.
Invesco S&P 500 Equal Weight ETF (RSP) rose 1.2%, hitting a record high. The First Trust Nasdaq 100 Equal Weight Index ETF (QQEW) rose 0.7%, just hitting new highs.
These highlight that market leadership is relatively widespread and extends even under the name of AI and technology.
However, the Nasdaq is 4.9% above its 50-day line and the S&P 500 is 5% above its 50-day line. It's on the verge of being extended again. It is true that the index could grow further, but the risk of a pullback will increase.
The market rally was reluctant to take a long pause and only briefly tested the 21-day line. However, if the Nasdaq rebounds quickly, the gains will increase again within a day or two.
So it's no surprise that bullish sentiment is on the rise. The bull-versus-bear indicator was at a multi-year high even before hitting new highs this week and remains just below extreme levels.
For the week, the 10-year Treasury yield fell 4 basis points to 4.26%, down 7 basis points from a three-month high on Friday.
U.S. crude oil futures fell 2.5% for the week to $76.49 a barrel, following Friday's 2.7% decline.
ETF
Among growth ETFs, the iShares Expanded Technology Software Sector ETF (IGV) fell 1%, but pared its weekly losses after plunging on Wednesday. palo alto networks (PANW). MSFT stock is a major component of IGV, and Manhattan Associates is also included in the ETF. The VanEck Vector Semiconductor ETF (SMH) rose 3.4% to a record high. Nvidia and AMD are huge SMH holdings.
The SPDR S&P Metals Mining ETF (XME) fell nearly 1% last week. The Global XUS Infrastructure Development ETF (PAVE) rose 1.9% to a new all-time high, extending its winning streak to seven weeks. The U.S. Global Jets ETF (JETS) rose 0.75%. The SPDR S&P Home Builders ETF (XHB) surged 3% to an all-time high while holding his LEN stock. Energy Select SPDR ETF (XLE) rose 0.5%.
Healthcare Select Sector SPDR Fund (XLV) rose 1.5% and Industrial Select Sector SPDR Fund (XLI) rose 1.9%, both hitting record highs.
The Financial Select SPDR ETF (XLF) rose 1.6% to a two-year high. Berkshire Hathaway is XLF's top holding.
Reflecting the more speculative story stocks, the ARK Innovation ETF (ARKK) fell 3.8% and the ARK Genomics ETF (ARKG) fell 4% last week.
Timing the Market with IBD's ETF Market Strategy
nvidia stock
Nvidia stock jumped 8.5% to 788.17. It all came as the stock soared 16.4% on Thursday after another spike in quarterly profits and guidance, lifting it from its 21-day line to a new all-time high.
Nvidia is arguably the top performing stock on the S&P 500 this year after taking the top spot in 2023. The company ended this week with a valuation of $1.946 trillion, and at one point on Friday it exceeded $2 trillion. The company is currently the third most valuable company in the United States. It's increasingly likely that Nvidia stock will exceed its market cap. apple (AAPL) ($2,818 billion) and even Microsoft ($3,049 billion).
However, NVDA stock is currently 33% above its 50-day moving average. It may take some time before AI leaders offer purchasing opportunities.
Up-and-coming stock
AMD stock rose 1.5% to 176.52 after an eventful week. The stock had fallen below its 10-week line after several weeks of trading, but it soared nearly 11% on Thursday following Nvidia's results, before receding slightly on Friday. In fact, AMD stock is up 1.52% this week with a buy point of 183.83, slightly too high for a tight three weeks. Investors may want to wait another week for a sideways base to form. If that happens, it will take a little more time for the 10-week line to catch up.
One question for investors is why buy AMD or other AI stocks instead of waiting for an opportunity to buy or add to Nvidia, the clear AI leader?
Microsoft stock rose 1.55% to 410.34 last week, rebounding from its 10-week line and regaining its 21-day line, providing another entry point for the AI and cloud giant.
MongoDB stock fell below the 422.84 buy point on Wednesday, but found support at the 10-week line and rebounded on Thursday and Friday to regain the buy zone. Still, the stock price fell 2.9% to 451.32.
Lennar stock rebounded from its 50-day line, rising 3.2% to 155.08, just below the sideways buy point of 156.01.
Manhattan Associates' stock price has been steady this month, emerging from a flat base on January 31st following the company's earnings results. The supply chain management software maker tested the 21-day line on Wednesday but has since rebounded, ending the week up 2.1% at 248.90. The stock cleared a short downtrend line and presented an aggressive entry. Investors could also wait for a move above the 251-252 area, clearing the February trading range.
what to do now
It is impressive that the market continues to rise. But it limits new purchasing opportunities. The Nasdaq and S&P 500 are already up some, so that might be for the best.
Investors probably want to be cautious about new purchases, especially in high-beta AI plays. Some are founding non-tech companies like Lennar, while others are consumer, energy, and biotech companies. These could help diversify AI and technology-focused portfolios and reduce vulnerability to large selloffs.
Cast a wide net to find broader leadership and look for viable names and structures. If you choose to increase your exposure, you'll want to have the best names on your watchlist so you're ready to jump on them when a buying signal is given.
But you don't have to feel like you have to move a lot. Gaining exposure and riding the current trends is a healthy play.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
Follow Ed Carson on thread @edcarson1971 and on X/Twitter. @IBD_ECarson For the latest stock market updates and more, contact Bluesky at @edcarson.bsky.social.
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