Stocks rounded up earlier losses, and the Dow showed early resilience as earnings news sparked some dramatic early moves. PayPal jumped on management’s comments. Vocera has instituted a possible setback of support. Canada’s GreenPower has sparked an EV deal with a Warren Buffett company. Disney shares faded on Dow Jones today, despite reports that the subscriber base for its Disney + service is approaching the 100 million mark.
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The Dow briefly rose higher and then slipped to 0.1%. The S&P 500 fell less than 0.1%. The Nasdaq Composite compared its decline in today’s opening to 0.2% on the stock market, as FANG shares generally traded lower DexCom (DXCM) fell to the bottom of the Nasdaq 100 after a earnings miss.
Illumina (ILMN) rose to the top of the Nasdaq 100, more than 10% higher after beating Q4 earnings and earnings late Thursday. IBD Leaderboard stock PayPal Holdings (PYPL) climbed 3% as at least nine analysts raised price targets after positive comments from management on Thursday.
Play mobile communication Vocator (VCRA) showed a strong decline of 10-week support, up 10% after the fourth-quarter report late Thursday. Biotechnology Immunogenic (IMGN) beat earnings 17% higher.
New IPO Bumblebee (BMBL) rose 5.7% after rising more than 63% in its first trading day on Thursday. Aurora Cannabis (ACB) fell 5.1%, despite the fact that results were reported above the forecast fiscal second quarter late Thursday.
Dow Jones Today: Disney Earnings
Walt Disney (DIS) made its profit in the forward market and fell 1.5% on the Dow Jones today, after a solid fiscal performance in the first quarter. Disney + subscribers climbed to 94.9 million from January 2, up 9% from $ 86.8 million on December 2 and 258% year-over-year. The monthly fee for U.S. subscribers will rise from $ 1 to $ 7.99 per month in March.
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Streaming video helped offset the loss from theme parks and movie theaters saved by the coronavirus pandemic. Disney’s revenue has now declined for three consecutive quarters. Earnings have now declined for nine consecutive quarters, and in two consecutive years.
Meanwhile, Disney shares cleared a buyout of 183.50 on a flat basis on Monday. Shares still ended Thursday in a buyout range of 192.68.
Earnings News: Hubspot, GreenPower
HubSpot (HUBS) climbed 17% higher and left a buying range after hitting a high on Monday. The CRM software developer reported revenue and revenue from the fourth quarter well above analyst expectations and increased its lead in the first quarter. If the pre-marketing movement holds in public, the stock will expand above its buying range and will hold the eight-week rule.
Raymond James and Mizuho upgraded the stock. Piper Sandler raised its price target to 600 from 488. HubSpot was in the New Highs segment of IBD on Monday.
British Columbia-based GreenPower Motor (GP) scored 6.4% in early action. The manufacturer of electric buses for merchant fleets reported the fiscal results of the third quarter and also announced an agreement to sell 150 taxis and chassis to Forest River RV, a Warren Buffett unit. Berkshire Hathaway (BRKB).
The units, which will be delivered in the first quarter, will form the basis for a range of Forest River electric shuttles and commercial vehicles, the companies said.
GreenPower shares rose 44% on Thursday from the close of their first day of public trading in August.
Other equity-earning shares are included 2U (TWO), Cognex (CGNX), Vocera en J2 Global (JCOM). American ash and manufacturing (AXL) rose 6.6% after its report early Friday.
PayPal is available for 750 million users
PayPal held its annual investor day – of course – of course. CEO Dan Schulman said the company could have 750 million active accounts by 2025, up from 377 million at the end of the fourth quarter. Factors including down payment and payment options in the store, and cryptocurrency trading are driving increasing engagement trends and as a result, the CEO said the company is ‘starting to bend and accelerate historical engagement curves’.
The IBD 50 and Leaderboard shares rose on February 4 after its earnings report in the fourth quarter. Shares are extended, by about 32% from an outbreak in December.
Dow Jones Today: chasing small caps, growth stocks
The Dow Jones is on track today with the starting bell with 0.9% for the week and sitting on top of new highs. The S&P 500 has a profit of 0.8%. The Nasdaq rose 1.2%, despite a modest loss Thursday. The Nasdaq and S&P 500 are also at a new high.
Small capitalization and growth stocks performed better by a wide margin. Both the Russell 2000 and the Innovator IBD 50 ETF (FFTY) rose 4.2% until Thursday. The number of outbreak targets may decrease, but the eruptions themselves are generally holding up well, and the earnings season has been largely positive.
For a more detailed analysis of the current stock market and its status, study the big picture.
However, it is important to note that the Russell is now trading more than 38% above its 200-day moving average – the highest levels in the history of the index. The Russell reached a peak of 32% above its 200-day high on March 10, 2000, 15.2% above its 50-day high, just as it transmitted in the dot-com bust.
The Nasdaq was 17% above its 50-day line at that point. So while the Russell looks slightly overheated, the Nasdaq’s current 7.5% margin above its 50 days seems tame in comparison. For the Nasdaq, margins in excess of 6% above the 50-day still tend to indicate withdrawals, or at least periods of flat trading that catch up with the moving averages.
This and a number of other warning flags hanging over the ‘confirmed uptrend’ status of the market give investors good reason to remain cautious and vigilant.
Tracking the energy / transport paradigm shift
Paradigm shift is always a dangerous term. Once investors start buying a new or reconfigured horizon for the US or the world economy, the new paradigms tend to collapse or fade, and the markets return to the status quo.
However, the stock market, and the US and world economies have seen a staggering number of paradigm shifts since the turn of the century. The eminent rise of China’s economy, smartphones, shale oil and natural gas and social media are just a few examples of massive industrial / economic shifts over the past 20 years.
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Now it seems that the stock market is reflecting another, even greater revolution, as energy and transportation markets are transitioning to fossil fuels in an era. Solar, electric autonomous vehicles, storage of batteries, fuel cells, hydrogen and other technologies all reach for the first time competitive levels of cost-effectiveness and efficiency. The world’s largest investors and funds recognize this and direct a tectonic shift in world capital.
Reflecting the value of such a move is hard work and unfamiliar territory for the stock market. And at the moment, it seems to be driving the unusual, extensive charting behavior we see with Nasdaq and Russell 2000.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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