Dow Jones futures rose a little late on Thursday, along with S&P 500 futures and Nasdaq futures. The recovery in the coronavirus stock market faded at the close on Thursday, although the main indexes had a strong week. Tesla (TSLA) soared in the second quarter delivery figures, while Akamai Technologies (AKAM) Teladoc Health (TDOC), Taiwan Semiconductor (TSM) and Atlassian (TEAM) all purchase points cleared. After closing Regeneron Pharmaceuticals (REGN) fell into weak results for possible coronavirus treatment.
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Tesla’s shares held most of Thursday’s earnings, crowning a great week for itself and other electric vehicle plays like Boy (NIO) Looking ahead, Tesla’s second-quarter earnings results could spur the S&P 500 index to add TSLA shares. Beyond that, Tesla faces no production restrictions, but doubts remain about future demand.
Teladoc’s shares gained two buy points on Thursday, while Akamai’s shares reached a new high. Taiwan Semiconductor shares also exploded beyond a clear point of purchase. Atlassian’s shares cleared an early entry, just below an official buy point for a completely new flat base.
On the downside, Regeneron and partner Sanofi (SNY) fell on Thursday night. Both REGN and SNY shares closed near the buying points.
Tesla Shares, TEAM Shares and TDOC Shares are on the IBD Leaderboard. TSM’s shares are in IBD 50, along with many other semiconductor companies.
Dow Jones Futures Today
Dow Jones futures were up 0.1% vs. fair value. S&P 500 futures advanced 0.15%. Nasdaq 100 futures were up 0.2%. DJIA futures are trading until 1 p.m. ET on Friday, then trading resumes at 6 p.m. ET on Sunday. Dow Jones futures trading may be relatively muted with US stock exchanges closed on Friday, in compliance with the July 4 holiday. But the stock markets in Asia, Europe and elsewhere are open.
Remember that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular session of the stock market.
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Coronavirus news
Coronavirus cases worldwide have reached 10.98 million. Covid-19 deaths have reached 523,000.
Coronavirus cases in the US have exceeded 2.84 million, with deaths exceeding 131,000. New cases of coronavirus in the US topped 57,000 on Thursday, clearing Wednesday’s record high of 51,097.
Florida on Thursday reported more than 10,000 new cases of coronavirus, and California topped 9,000. Texas issued a statewide order requiring facial coatings.
Hospitalizations have increased in many solar belts and southern states. So far, coronavirus deaths have remained low. Recent coronavirus cases have become much younger than a few months ago, while the level of care has improved.
Regeneron and French drug giant Sanofi said a Kevzara phase 3 trial failed to meet the targets in coronavirus patients requiring ventilation. Regeneron shares fell 2% and Sanofi shares 3% in extended trading. REGN’s shares had closed slightly below an almost ascending base entry. SNY’s shares were just below the consolidation purchase point.
Coronavirus Stock Market Rally
The rebound in the coronavirus stock market got off to a strong start on Thursday, with the Nasdaq reaching a record high. But the main indices faded at the close. The Dow Jones Industrial Average closed 0.4% higher in the stock market on Thursday after hitting resistance once again on its 200-day moving average. The S&P 500 Index was up 0.45% and the Nasdaq Composite 0.5%.
But the Dow Jones and other indices still had a strong week. The DJIA rose 3.25%, the S&P 500 4% and the Nasdaq 4.6%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.3% on Thursday but 3.6% during the week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 0.2% on Thursday, down 3.7% during the week. The VanEck Vectors Semiconductor (SMH) ETF was up 1.5% on Thursday and 3.8% during the week. Taiwan Semiconductor is a major holding in SMH.
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Akamai Stock in a purchase zone
Akamai’s shares rose 6.4% to 113.12 on Thursday, beating a 108.35 buy point, according to MarketSmith analysis. AKAM is within the 5% chase zone. The relative line of force for Akamai stocks is still a bit far from its March peak. The RS line, which tracks the performance of a stock against the S&P 500 index, is the blue line in the charts provided.
Taiwan Semiconductor Stocks Run Out
TSM shares rose 3.2% to 58.62, releasing a purchase point of 58.14 cups with mango. However, the RS line for Taiwan’s semiconductor stock is not yet at high levels. Taiwan Semi has not been a big winner in recent years, and has lagged behind several other major chip stocks.
Teladoc Stock
Teladoc shares rose 5.05% to 208.89, only clearing a 208.73 buy point above a high level from a recent consolidation. TDOC stocks also passed a very short trend line offering an early entry of around 200. The RS line for Teladoc stocks is near a record high after a major race to start the year.
Atlassian Stock
Atlassian shares rose 2.4% to 190.08 on Thursday, a record close. TEAM shares are just below a flat base buy point of 191.82. But investors could have bought Atlassian shares when they hit around 188, clearing a near-term high as well as a downtrend line. In recent weeks, TEAM stocks have found support in their 10-week line.
Tesla Stock
Tesla shares rose 8.4% to 1,208.66, reaching another record. Before Thursday, Tesla reported that it delivered 90,650 electric vehicles in the second quarter. That exceeded recent estimates of around 88,000. Deliveries of Model 3 and Y were 80,050, while deliveries of Model S and X were 10,600. Total production from the Fremont and Shanghai plants was 82,272.
TSLA shares had already soared earlier in the week as leaked emails from Elon Musk to staff indicated that Tesla was close to breakeven in the second quarter. If Tesla’s earnings are positive for the second quarter, that could boost TSLA’s entry into the S&P 500 index. Musk will likely be able to recognize enough emission credits and “Full Self-Driving” revenue for that to happen.
With investor prices on solid deliveries and more, Tesla shares soared 26% during the week.
It was a great week for EV related plays. Nio’s shares rose 36% to a 16-month high, including a 19% increase Thursday. The Chinese luxury electric SUV maker reported record second-quarter deliveries early Thursday. Group of workhorses (WKHS), which is developing electric trucks, shot up 111% last week after a 103% advance in the previous week. Blink charge (BLNK) jumped 75%.
On Thursday night, TSLA shares rose a fraction. Nio’s shares recovered 3%.
What’s next for Tesla?
Over the next few weeks, investors will await Tesla earnings and possible S&P 500 admission news for TSLA shares. As for the business, Tesla should be producing record quantities, with no coronavirus shutdowns affecting factories in Fremont or Shanghai. Tesla will begin answering key questions about current demand for Model Y, Europe, and China.
After the initial burst of Tesla Model Y orders, the new EV will show sustained demand, especially given widespread reports of poor build quality. If demand declines, Tesla could presumably introduce a lower-cost variant for Model Y, lower prices, or start Y shipments to Europe.
Tesla’s EV market share in Europe seemed to have peaked before the coronavirus crisis. There may be some accumulated demand in the third quarter, while European subsidies are increasing. But several more rivals EV and hybrids are being launched.
As for China, Tesla presumably had strong sales in June for its new China-made 3 LR model, especially with subsidies cut in July. What is the sustained demand for Model 3 in China? EV competition is also picking up there.
Follow Ed Carson on Twitter at @IBD_ECarson for updates on the stock market and more.
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