Dow Jones futures rose slightly late Thursday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a difficult session. The Dow fell modestly while the Nasdaq suffered the biggest loss since the end of October as Apple shares, Tesla (TSLA) and many other technologies tumble out of resistance areas.
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The rising yields from the treasury were the cause, although a new Covid strike in France and the fall in crude oil prices did not help. Investors should largely stay away from technological stocks while investing cautiously in other rising sectors.
FedEx (FDX) and Nike (NKE)’s headline earnings after the end.
FedEx earnings were better than expected, with profit and sales growth for a third consecutive quarter. FDX shares rose 4% in extended trading after falling 0.9% to 263.51 on Thursday.
Nike’s earnings were beating, while revenue was too low. Nike shares fell 3% overnight, indicating that a test of its 50-day range should be done on Friday. The Dow Jones giant fell 1.1% to 143.17 on Thursday. NKE stock has a buy point of 148.05.
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Meanwhile, some major technology and growth stocks resisted with the Nasdaq under pressure. Some examples include Tesla shares, PayPal (PYPL), Pinterest (PINS), Nvidia (NVDA), appeal (AAPL) and Twilio (TWLO).
Volkswagen (VWAGY), which rose sharply amid euphoria for its large EV pressure, fell by 15%. So far, the VWAGY share is 18.5% above its ten-day line.
Williams-Sonoma (WSM) broke out on Thursday, rising 18.5%. The WSM stock balanced on strong earnings and guidance, as well as a dividend increase and buyback.
PayPal and Nvidia shares are on IBD Leaderboard. AAPL shares are on SwingTrader. PayPal shares are on IBD long-term leaders. Tesla shares, PayPal and Williams-Sonoma are on the IBD 50. PINS shares are on the Big Cap 20.
Dow Jones Futures Today
Dow Jones futures rose 0.15% to fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures contracts climbed 0.2%.
Remember that overnight actions in Dow futures and elsewhere do not necessarily translate into stocks in the next regular session.
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Coronavirus News
Coronavirus cases worldwide reached 122.32 million. The deaths of Covid-19 amounted to 2.7 million.
Coronavirus cases in the US hit 30.35 million, with deaths above 552,000.
The European Medicines Agency said the AstraZeneca (AZN) coronavirus vaccine has not been linked to blood clots. This could pave the way for European countries to resume AstraZeneca jabs. Even before the suspension of the AstraZeneca vaccine, the EU had hit the UK and US hard in terms of vaccinations.
Many European countries are seeing increasing cases of Covid increasing. Paris and much of France will start a partial exclusion from Saturday and last for four weeks. Italy again imposed many restrictions on Monday. This will keep Europe’s economic recovery slow, while the US will quickly withhold coronavirus restrictions.
The FDA has not yet approved the AstraZeneca vaccine, pending the outcome of a US trial. According to Biden’s government, several million stored doses are being sent to Canada and Mexico.
Stock market rally Thursday
The stock market boom was defensive, with the Nasdaq closing indices near the lowest levels.
The Dow Jones industrial average closed 0.5% higher in the stock market. The S&P 500 index fell 1.5%. The Nasdaq Composite fell 3% in a higher volume, the worst decline since a loss of 3.7% on October 28.
The 10-year Treasury yield rose 7 basis points to 1.71%. The intraday peak of 1.754% was the highest since January 2020. With GDP growth likely to rise by 6% -8% in 2021 as the pandemic fades, while fiscal and monetary policies in turn make up the returns of the treasury rising from historical lows makes a lot of sense.
US crude oil prices fell 7.1% to $ 60 a barrel, falling for a fifth consecutive session. US crude stocks rose again last week, the Energy Information Administration reported on Wednesday. Petrol stocks rose again after refinery shutdowns hit production for weeks. Meanwhile, the European misery for the coronavirus will outweigh the demand for energy there.
Crude oil and solar supplies were hit hard on Thursday, putting the S&P 500’s biggest losers ahead.
Growth rates meet resistance
Tesla share rose 6.9% to 653.16. It resisted around the exponential moving average of 21 days, with the line of 50 days significantly above. On Wednesday, the TSLA stock reversed higher and closed just above the 21-day high.
Apple stock fell 3.4% to 120.53, which also retreated from its 21-day line. On Tuesday, Apple came above the 21-day and a steep downward trend. PYPL shares, TWLO, PINS and Nvidia fell back from their 21-day and 50-day lines and lost 5% -9% on Thursday.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) fell 2.7%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 3.7%. The iShares-enhanced Tech-Software Sector ETF (IGV) declined 3.5%. The VanEck Vectors Semiconductor ETF (SMH) fell by 4%, with Nvidia share a major component.
As a result of more speculative story stocks, ARK Innovation ETF tumbled 5.8% and ARK Genomics ETF 4.7%. Like many of the speculative growth names they own, both ARK ETFs have fallen back from their 21-day lines. Tesla shares are the largest stake in ARK Investments’ ETFs.
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Analysis of stock market marches
On Wednesday, the Nasdaq fell from intraday lows as treasury yields declined following the Federal Reserve and the remarks of Fed chief Jerome Powell.
But Thursday’s rise in the 10-year Treasury yield caused the Nasdaq to tumble below the key level below the 50-day line after three days. The Nasdaq and growth stocks can handle the rising returns of the treasury, but not the returns. Like the brave Sir Robin in Monty Python’s “Holy Grail,” the Nasdaq is quick to shout “run away” and flee to the first sign of trouble.
The Nasdaq closed below its 21-day low for the first time since March 10, hitting Wednesday’s intraday lows.
In short: the composition is essentially still in a correction. As long as the Nasdaq is below its 50-day line – as well as resistance near last week’s highs – The. This is especially true for those who are stuck below key levels, such as Tesla, Apple and Twilio, with many others in a worse condition.
But even technologies that started or flickered early entries – like Applied materials (AMAT), FMD instruments (MSKI) and a few other disk names – are at the mercy of the Nasdaq.
If you have long-term positions or pilot positions in some techniques, that’s OK, but for now, investors need to focus on what works.
Dow Jones looks strong for now
From technologies, the march on the stock market still looks healthy. The Dow Jones reached a fresh intraday, with the S&P 500 and Russell 2000 not far off. Real plays of the real economy / economy continue to break out, expand profits or at least hold.
If the Nasdaq begins to hit its recent lows, the broader market is likely to weaken, as the Dow did in early March. Indeed, on Thursday, the move by the Nasdaq, along with energy prices, caused sharp losses in the S&P 500 and eventually dragged the Dow Jones.
So do not feel that you have to be very invested. Do not chase stocks that are extended from buying zones.
Stay flexible and engaged as always.
Read the big picture every day to keep up with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter @IBD_ECarson for stock market updates and more.
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