Dow Jones futures and S&P 500 futures were down modestly on Thursday night, while Nasdaq futures were on the low edge. Walt Disney and Cisco systems headline earnings hours later.
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After a stay-at-home drama and technology turnaround earlier in the week and the withdrawal of “real economy” names, the stock market rally generally outpaced equity.
In the current environment, it seems like a safe haven for a wide area: US-listed China stocks.
Coronavirus is no longer an important factor for Chinese e-commerce and other Internet Pindudo (PDD), JD.com (JD) and Tencent (TCEHY) – But no Alibaba (Baba) Chinese EV stocks such as Neo (NIO), Expang (XPEV) and Li Auto Toe (LI) is also happening, as Tesla stock made resistance at its day-to-day line. Futu Holdings (FUTU) and GDS Holdings (GDS), which has earnings next week with Neo Stock and JD.com, is also doing well.
Earlier on Friday, Li Auto Toe Stock and Small China e-C mer Merce game Whipshop Report VIP earnings.
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Cisco, Disney earnings
Late Thursday, Dow Jones stocks Disney (DIS) and Cisco Systems (CSCO) reported earnings with chip-gear giant Applied Materials (AMAT) and the fashion e-commerce platform Farafech (FTCH). New IPO Paltir (PLTR) and Unity Q Software (U) also reported earnings.
Disney stock went into lower-than-expected losses and Disney reached +73.7 million customers. Cisco shares moved on to more expected results and guidance, a positive sign for enterprise IT costs. At the top of the earnings and sales of applied materials, AMAT sends the stock to a moderately higher, back to the buying area. The red-hot fur stock rose sharply. Despite strong growth and guidance, Unity Software’s software declined modestly. Palan lentier stock reversed the initial loss of the hour and fell
But one of the biggest movers after hours was Li Auto Toe Stock, which expands its already huge Thursday gains in its own earnings report.
Current coronavirus news headlines – covid vaccines in the way while new cases with record highs of cases – make it difficult to determine which stocks and sectors will lead. The near-term future looks bleak for “real economy” companies as coronavirus cases and lockdowns cool the global economy. But stay-a-home plays facing an uncertain future after the end of the coronavirus vaccination epidemic.
Tesla, JD.com, Pindudio and Palantir stock are all on the IBD leaderboard. Alibaba Stock IBD is the long-term leader. IBD50 has stock of Alibaba, Futu and Applied Materials.
Dow Jones futures today
Dow Jones futures fell 0.35% to a fair value, even as Disney and Cisco stock lifted. S&P 500 futures sank 0.3%. Nasdaq lost 100 futures fraction.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
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Corona virus news
Worldwide coronavirus cases have reached 53.08 million. The death toll of Covid-19 peaked at 1.29 million.
U.S. In coronavirus cases, 108 million people have been struck, with 248,000 dying.
U.S. Cowid’s cases peaked at 100,000 on the ninth straight day on Thursday, hitting a new daily record above 161,000. There are now more than a million cases of coronavirus in California now joining Telesas.
With the temperature dropping and Thanksgiving and other holidays approaching, cases of coronavirus are set to rise in the coming weeks. It will overload hospitals in many areas.
Yet, cities and states are not repaying the sweeping partial lockdown like many European countries. But there are steps in that direction. New York is closing restaurants, bars and gyms at 10 p.m.
Meanwhile, in the next few weeks Modern (MRNA) will likely provide interim effectiveness for its coronavirus vaccine candidate, while Pfizer (PFE) and its partners Biotech (BNTX) may file for FDA emergency approval for their coronavirus vaccine. With mass vaccinations starting in early 2021, some will be able to reach the FDA in a few more months.
Stock market rally
US stock market observed today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Advantages / disadvantages | Change% |
| Dow Jones | (0 DJIA) | 29078.59 | -319.04 | -1.09 |
| S&P 500 | (0s and p5) | 3537.00 | -35.66 | -1.00 |
| Nasdaq | (0NDQC) | Is 11709.59 | -76.84 | -0.65 |
| Russell 2000 | (IWM) | Is 169.96 | -2.67 | -1.55 |
| IBD50 | (FFTY) | 37.36 | -0.21 | -0.56 |
Last updated: 4:08 PM ET 11/12/2020 |
||||
The stock market rally on Thursday saw widespread selling. The Dow Jones Industrial Average retreated 1.1% in stock market trading on Thursday. The S&P 500 Index lost 1%. The Nasdaq combined reversed the morning’s gain to close below 0.65%.
In addition to the coronavirus headlines, a provocative deal seems far away, with House Speaker Nancy Nello Pelosi still demanding a larger relief package of 2 2 trillion or more while Senate Majority Leader Mitch McConnell favors a much lower spending bill.
While the travel, banking and energy sectors led Thursday’s losses, growth in stocks has also slowed.
Among the best ETFs, the innovator IBD50 ETF (FFTY) sank 0.6%. Ethereum Extended Tech-Software Software Sector ETF (IGV) fell 0.2%. Vanek Vectors Semiconductor ETF (SMH) decreased 1.1%. SMH ETFs in Applied Materials and other chip-equipment stocks rose overnight.
A notable exception: CranShare CSI China Internet ETF (KWEB) rallied 1.7%. Alibaba is a key component of ETFs, but JD.com and big winner PDD Stock are also key holdings.
Multiple coronavirus vaccines are expected to be approved in the next two months, with one case pending. Zoom video (ZM), Peloton (Peton), Shopife (Shop) and that too Amazon.com (AMZN) could see weak growth down the road.
But with cases of coronavirus on a partial lockdown and hospitalized galaxies and European countries, it’s hard to feel confident even about buying “real economy” names.
China Safe Heaven?
The idea that China stocks are a safe haven is probably a warning in itself. Although investors have many reasons to always be wary of Chinese stocks, they also offer tremendous benefits.
Accounting difficulties are still worrisome. Regulators can decide to break up a company or sector. The draft rules for clipping monopolistic behavior via the big internet hit Alibaba, JD and Tencent earlier in the week, while Baba continued the stock struggle. It came a week after regulators suspended Ant Group’s IPO, in which Alibaba seized a third stake.
JD Stock and Tencent – which has a large JD stake – argue in the area of buying, although both charts have some possible issues. Whipshop stocks moved towards earnings by the point. PDD stock is very wide after a 20% spike on its earnings. Alibaba stock looks damaged.
China EV Stocks
Chinese electric-car manufacturers face a more welcome regulatory environment and are growing rapidly from all low levels. But Neo, Expang and Li Auto Toe stocks are ahead of any imaginable buy point, with Tesla stocks looking cheaper. Expang stock rose 33% in its first earnings report. Li Auto Toe rose 27% and Neo 12%. All three hit record highs, heading for an even bigger weekly gain. All three stocks were active overnight before the stock rose more than 10% before Friday morning earnings. Neo stock is on tap next week.
In contrast, Tesla stock fell 1.3%, continuing to find resistance at the 50-day moving average, which is flat. Shares are down 4.5% for the week, growth is not terrible for stocks. But TSLA stock is slowly retreating while China EV rivals like Li Auto To Skyrocket.
EV startups face stiff competition from one another and from Tesla Volkswagen (VWAGY) and many other traditional automakers are set to flood the Chinese market in 2021.
If and when China electric-car stocks are extended or reversed for an extended period, investors will rush back into Tesla stocks. Or will the electric-car giant sell with its China competitors?
Meanwhile, Hong Kong’s brokerage Futu Holdings is close to the buy point while data center operator GDS is only in the buy range. Both reported earnings next week.
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What to do now
As the coronavirus stock market peaked in early September, key indices and leading stocks faced many downtrends and some uptrends, but nothing happened for long.
Big, easy money is made during a strong stock market rally that lasts for several months. The growth of the choppy markets is the worst for investors. On good days, you will be tempted to buy new ones, but they risk going south quickly.
If you’ve got a big winner, like Farfetch or Neo, there’s no need to take action. But you can sell other stocks because they reduce the profit or increase the loss. With less good looking setups after the latest whipso market action, it should reduce your exposure through your frustration.
Read the big picture every day to stay in tune 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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