Dow Jones futures were up slightly on Thursday afternoon, along with S&P 500 futures and Nasdaq futures, with U.S. markets closed for the Thanksgiving holiday. Apple, Microsoft and Tesla are in the news.
The stock market rally was positive for the second session in a row on Wednesday. Fed officials see a slower rate hike “soon,” according to the Fed’s November meeting minutes released Wednesday afternoon.
Nasdaq led, buoyed by rebound Tesla (TSLA). All the major indexes are up solidly so far this holiday-shortened week. But a longer holiday for the market rally could be constructive.
Investors should be cautious about adding exposure given the key technical resistance and notable economic news ahead.
However, Dexcom (DXCM), UnitedHealth (UNH), Neurocrine Biosciences (NBIX), Medpace Holdings (MEDP) a Shockwave Medical (SWAV) are five healthcare stocks showing interesting action.
DXCM and Neurocrine Biosciences are on IBD’s list, MEDP’s on Watchlist. NBIX and Medpace shares are on the IBD 50.
Beta Tesla FSD
Tesla CEO Elon Musk tweeted Thursday that the Full Self-Driving Beta is now available to all FSD owners in North America who request it.
This could allow Tesla to report more deferred revenue from FSD.
Despite its name, Full Self-Driving does not offer full self-driving, but is a Level 2 driver assistance system. The National Highway Traffic Safety Administration is investigating the safety of Autopilot and FSD. The Justice Department is reportedly conducting a criminal investigation into Tesla’s self-driving claims.
Tesla shares jumped 7.8% to 183.20 on Wednesday, rebounding from Tuesday’s bear market lows as Citigroup upgraded the EV giant from sell to hold. Shares of TSLA are still down 19.5% so far this month, and will roughly halve in 2022.
Dow Stock News
In Dow Jones stock news, Apple ( AAPL ) is reportedly interested in buying the British soccer giant Manchester United (MANU). The Federal Trade Commission may try to block it Microsoft (MSFT) buy Activision Blizzard (ATVI) for nearly $69 billion.
Dow Jones Futures Today
Dow Jones futures rose 0.1% versus fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures advanced 0.4%.
Mainland China has reported more than 31,000 Covid cases, including those without symptoms, surpassing levels seen in mid-April during Shanghai’s lockdown. Symptomatic covid infections are still below April highs.
US stock markets will be closed on Thursday for the Thanksgiving holiday. On Friday, US markets will close early at 1:00 PM ET. But other exchanges around the world are open as normal on Thursdays and Fridays.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading on the next regular exchange.
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Stock market rally
The stock market rally faltered on Wednesday but extended gains led by technicals.
Initial jobless claims rose to a three-month high, while continuing claims hit an eight-month high. The S&P Global purchasing managers’ index for US manufacturing and services signaled a decline.
The Fed’s note boosted expectations of a 50 basis point rate hike at its Dec. 14 meeting. Markets still favor another half-point move in February, but there is a decent chance of a quarter-point increase.
The Dow Jones Industrial Average rose 0.3% in Wednesday trading. The S&P 500 rose 0.6%, led by shares of TSLA. The Nasdaq Composite fell 1%. The small-cap Russell 2000 gained 0.1%.
U.S. crude oil prices fell 3.7% to $77.94 a barrel. Natural gas futures jumped 7.2%.
The yield on the 10-year government bond fell 5 basis points to 3.71%. The two-year Treasury yield, more closely tied to the prospect of a Fed rate hike, fell below 4.5%.
The US dollar fell sharply for the second session in a row, returning near recent lows.
Why this IBD tool makes it easy to find the best stocks
The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.5%. The VanEck Vectors Semiconductor ETF ( SMH ) gained 0.9%.
The SPDR S&P Metals & Mining ETF (XME) gained 0.3%. The US Global Jets ETF ( JETS ) jumped 0.1% higher. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.5%. The Energy Select SPDR ETF ( XLE ) fell 1.1%. The SPDR fund in the selected healthcare sector ( XLV ) rose 0.4%. Dow Jones giant UNH is the top holding in XLV.
ARK Innovation ETF ( ARKK ) jumped 2.9% and ARK Genomics ETF ( ARKG ) jumped 0.9%, reflecting more speculative story stocks. TSLA stock is the top holding across Ark Invest’s ETFs.
Top five Chinese stocks to watch
Events to watch
Shares of Dexcom advanced 1.7% to 112.92, finding support at the 21-day moving average. Shares of DXCM have stalled this month after missing earnings on October 28. Dexcom stock is likely long-handled with a 123.46 buy point from a seven-month consolidation. Investors could buy DXCM shares from an early entry from the 21-day line, perhaps using Tuesday’s high of 113.88 as a specific buy point.
Medpace shares fell 1.3% to 218.81 on Wednesday. Shares are consolidating near record highs as they rocketed 38% on Oct. 25 after earnings. Since then, the MEDP stock has been forging a messy handle on the cup’s deep, year-round base. While the stock has seen some big intraday swings, MEDP stock is currently on track to form a three-week tight pattern heading into Friday’s close. Investors could use the November 15 close at 226.57 as an early entry, above most of the recent trading.
Shares of NBIX fell 1.5% to 118.97. Stocks are consolidating near multi-year highs, extended since the October breakout. Despite last week’s dip to the 50-day mark, Neurocrine shares are in a three-week tight pattern that is on its way to a fourth week. Technically, it has a buy point at 126.09, although investors may want to wait for some quieter action.
Shares of Shockwave jumped 4.7% to 264.06 on Wednesday, back above its 21-day mark but hitting resistance at the 50-day mark. After a failed breakout in late October and a sharp selloff that continued through gains, SWAV stock has bounced back over the past week. The new base will take more time, but aggressive investors could use a strong move above the 50-day period as an early entry.
Shares of UNH climbed 1.3% to 529.71, bouncing above its 50-day and 21-day levels after briefly undermining its 200-day level last week. UnitedHealth stock used to be a long-term IBD leader and still shares many characteristics. Investors could use the bounce off the 50-day line as either an early entry or a long-term leader’s entry. UNH stock needs to make a new base after quickly failing to break out of a mug-with-handle base last month.
Tesla vs. BYD: Which EV Giant is better to buy?
Market rally analysis
A stock market rally added to Tuesday’s gains. The S&P 500 just broke its intraday high of Nov. 15 and closed within 1% of its 200-day line.
The Russell 2000 reached its 200-day line.
The Nasdaq added to Tuesday’s bounce from its 21-day moving average, though it is still below its short-term high of Nov. 15 and well below its 200-day high.
The Dow Jones has come within 20 points of its August 16 intraday high.
The S&P 500 moving firmly above its 200-day line — which roughly coincides with the annual downtrend line — is a huge test for a market recovery.
The flood of economic data could shake expectations of the Fed and thus the stock market. On Wednesday, November 30, the October JOLTS report will show job vacancies, with Fed Chair Jerome Powell speaking later in the day. On Thursday, the PCE price index, the Fed’s favorite gauge of inflation, will be released, along with jobless claims and the ISM manufacturing index. The November jobs report is due out on Friday, November 2.
Ideally, the market would move aside for a few days and let at least the 21-day mark catch up and head into this economic news.
Time The Market with the IBD ETF Market Strategy
The market’s rally has seen nice gains this week, with more stocks flashing buy signals over the past few days. As a result, investors were able to add a little more exposure.
But they may want to be cautious about making significant new purchases with the S&P 500 trading below its 200-day mark and the economy so critical to the Fed next week.
Also consider partial profits from stocks that are growing quickly. Stocks are making short-term gains amid a choppy uptrend and sector rotation.
Still, investors should work hard on their investment shopping lists, looking for setups and names that can be applied across sectors.
Read The Big Picture every day to stay in tune with market direction and leading stocks and sectors.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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