The Nasdaq composite paced a fourth straight weekly gain for the major equity indexes Friday as investors shrugged off a lower than expected initial print on U.S. GDP (up 2.6%, below the 2.9% Econoday forecast) and some concerns on the future of President Trump's "America First" trade policy.
Meanwhile, Bitcoin Investment Trust (GBTC) showed that it's still in deep hibernation mode. The popular Bitcoin-tracking closed end fund pulled below its key 10-week moving average for the second straight week after topping out at 3,522 last month.
While Bitcoin Investment Trust saw very dull volume, shares still dropped 2.4% to 1,645 and lost nearly 7% for the week. The weak action is not surprising given that in December Bitcoin showed the same type of climax top action witnessed during the end of the dot-com boom in late 1999.
The S&P 500 was not far behind the Nasdaq, racing almost 1.2% higher. The Dow Jones industrial average, which also counts Intel among its 30 components, rose nearly 0.9% as at least 11 of the 30 names gained 1 point or more. Volume edged slightly lower on the Nasdaq vs. Thursday and dipped on the NYSE, according to early data.
The Russell 2000 rallied 0.4%. The popular small-cap gauge is up 4.7% since Jan. 1, trailing an 8.7% gain for the big and megacap tech-driven Nasdaq.
A big post-earnings gain of nearly 11% for Intel (INTC) helped hoist the Nasdaq composite to a 1.3% gain on Friday, taking shares in the chipmaking giant on its second breakout attempt past a 47.40 buy point in a six-week cup. Notice how the cup base showed lopsided action, a flaw.
However, the big gap up on Friday, paired with a 166% increase in volume vs. the prior 50 trading sessions, completely changed the complexion of the Santa Clara, Calif., tech firm.
When the stock opened on Friday at 48.30, it traded less than 3% above the 47.40 buy point, and thus was in buy range. Don't chase a stock that has already advanced more than 5% past the proper entry point in a well-formed base.
Intel posted a second quarter in a row of accelerating profit growth. Earnings in Q4 rose 37% to $1.08 a share, up from increases of 22% and 26% in the prior two quarters. Sales picked up 4% to $17.05 billion, boosted in part by hot demand for data center chips.
As seen in IBD Stock Checkup, Intel sports an 84 Composite Rating, which combines all of IBD's key metrics on fundamentals, technical chart action, and growth of institutional sponsorship. While that's below the 90 minimum threshold you'd prefer for breakout candidates, Intel's 84 is not terrible. And due to big weekly gains, watch to see if that rating quickly improves.
At the start of the year, Intel showed a 90 Composite Rating on a scale of 1 to 99, a 91 for EPS Rating, and an 87 for Relative Price Strength over the past 12 months.
The Dow transports also joined the fairly broad advance, rising 1.1%. But at 11,125, the sector index still lost 1.6% for the week.
The Dow utility average gained 0.4%, but the rate-sensitive index is still in an intermediate correction. At 699, the Dow utilities are still 10.2% below the Nov. 15 peak of 778. The yield on the benchmark U.S. Treasury 10-year bond is at 2.66%, holding at the highest level since April 2014.
The Federal Reserve holds its first meeting on interest rates next week, but CME Group fed funds futures show an expectation of no increase in the cost of money. But at the March 21 meeting, bond traders see a nearly 80% chance that the fed funds rate will rise by at least a quarter point to a target range of 1.5%-1.75%.
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