Dow Jones futures rose modestly on Monday night, along with S&P 500 futures and Nasdaq futures. Coronavirus stock market recovery rebounded on Monday led by DJIA giants Boeing (BA) and Apple (AAPL) Tesla shares rose above 1,000 again when CEO Elon Musk hinted Tesla (TSLA) could break even in the second quarter. After the close, Micron shares, Lululemon shares, and Wells Fargo shares moved on the news.
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Micron technology (MU) reported better-than-expected earnings, Lululemon Athletica (LULU) bought the home fitness company Mirror. Wells Fargo (WFC) cut its dividend as other large banks kept their payments stable after annual stress tests.
Micron shares rose overnight, while other moves related to memory chips and shares of equipment manufacturers with chips Applied materials (AMAT) also got up. The Lululemon stock appeared, while the home exercise specialist Platoon (PTON) fell. Wells Fargo shares fell a fraction of the somewhat expected dividend cut.
Apple stock and Tesla (TSLA) are on the IBD classification table. Lululemon’s shares are on SwingTrader.
Dow Jones Futures Today
Dow Jones futures were up 0.15% against fair value. S&P 500 futures advanced 0.3%. Nasdaq 100 futures were up 0.4%. Remember that overnight action on Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.
Join the IBD experts as they discuss actionable actions in the recovery of the coronavirus stock market on IBD Live.
Coronavirus news
Coronavirus cases worldwide have now reached 10.40 million. Covid-19 deaths are above 507,000.
Coronavirus cases in the US have reached 2.68 million, with deaths exceeding 128,000.
Covid-19 cases have skyrocketed in Arizona, Texas, Florida, and many other southern states. Hospitalizations have also increased at hot spots.
Late Monday, Arizona ordered the closure of all bars, clubs and gyms. Previously, New Jersey halted reopens and postponed dinner indoors indefinitely. New Jersey cases have dropped dramatically since the April spikes, but officials may be concerned about a relapse amid evidence that meals indoors are linked to further outbreaks of coronavirus.
So far, coronavirus deaths have not recovered. But the pause and reversals to facilitate the closure of coronaviruses, along with greater social distancing, will have an impact on the incipient economic recovery.
On Monday night, Fed Chief Jerome Powell emphasized the economic importance of keeping the coronavirus under control.
Coronavirus Stock Market Rally
The rebound in the coronavirus stock market opened in a mixed fashion, but picked up momentum in the explosion of pending home sales data, with DJIA and other major indices finding or claiming key support.
Summary of the US Stock Market Today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | gain loss | % Change |
| Dow Jones | (0DJIA) | 25,481.53 | +465.98 | +1.86 |
| S and P500 | (S and P500) | 3,041.18 | +32.13 | +1.07 |
| Nasdaq | (0NDQC) | 9838.58 | +81.36 | +0.83 |
| Russell 2000 | (IWM) | 140.59 | +3.92 | +2.87 |
| IBD 50 | (FFTY) | 33.61 | -0.09 | -0.27 |
Last Updated: 5:30 PM ET 06/29/2020 |
||||
The Dow Jones Industrial Average rose 2.3% on the stock market on Monday. Apple shares, the biggest weight in the price-weighted DJIA, rose 2.3% to 361.78, not far from record highs. Boeing’s shares soared 14% when the Boeing 737 Max completed its first recertification flight.
The S&P 500 Index advanced 1.5% and the Nasdaq Composite 1.2%.
The DJIA recovered from its 50-day moving average, but is still well below its 200-day line. The S&P 500 fell back above its 200-day line. Nasdaq, which fell sharply in the first operations, recovered above its 21 days.
Even as Covid-19 cases continue to rise, coronavirus replications were withdrawn, including Zoom Video (ZM) Teladoc Health (TDOC), Quickly (FSLY), DocuSign (DOCU) and Peloton shares. All except the Teladoc stock were well extended. Several other coronavirus-compatible software names were also removed, but overall they showed no major damage to the chart.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied to close out. The expanded iShares Tech-Software Sector ETF (IGV) was down 0.3%, after rising slightly last week. The VanEck Vectors Semiconductor (SMH) ETF was up 1%. Micron’s shares are part of the SMH ETF.
Micron Earnings
Micron earnings fell 22% to 82 cents a share. Third quarter tax revenue increased 14% to $ 5.44 billion. Analysts had expected Micron earnings of 77 cents on revenue of $ 5.31 billion.
The memory chip giant also gave a bullish guidance for the current quarter.
Micron shares rose 5.7% to 50.94 overnight. MU’s shares rose 1.4% on Monday, rebounding from its 50-day line and closing just above its 200-day line. A buy point of 50.24 cups with a handle for Micron shares is still technically valid, but investors may want to focus on 54.92 as a better entry.
However, the relative strength line for Micron stocks has been lowered since the beginning of January and has generally decreased for the past two years. That reflects poor performance for MU’s shares against the S&P 500. The RS line is the blue line in the boxes provided.
Micron results also raised memory games Digital West (WDC) and Seagate technology (STX) Giant equipment chip Applied materials (AMAT), which has a lot of exposure to the memory market, also rose as it traded around a buy zone.
Lululemon buys game mirror to exercise at home
Late Monday, Lululemon said he will buy Mirror for $ 500 million. Mirror offers weekly live classes and thousands of on-demand workouts. It also provides one-on-one personal training.
Lululemon and his giant companion of athleisure clothes Nike (NKE) have been expanding home exercise offerings during the coronavirus pandemic. They are taking on the pure game of Peloton.
Lululemon’s stock recovered 3.7% overnight. LULU shares rose 1.7% on Monday to 294.35. The shares have been consolidated for a few weeks since they ran from their March low to their June 10 high. But Lululemon’s actions need more time before they have a proper basis, and perhaps for the 10-week moving average to catch up.
Meanwhile, Peloton shares fell 1.7% overnight. PTON shares fell 2.1% on Monday, but after hitting a record on Friday.
Fitness Survival: These Big Names Compete To Win The Fitness Race At Home
Tesla earnings in Q2?
CEO Elon Musk, in another “leaked” email to staff, said “reaching break-even point looks very tight,” but it is possible for the second quarter. That suggests a balance quarter or real Tesla earnings are likely, if Musk’s latest suggestions are a guide.
Tesla’s production and delivery figures for the second quarter are due in early July, probably later this week. Tesla deliveries will hit 90,000-100,000, RBC Capital forecast on Monday. Many Wall Street analysts have established deliveries of around 70,000, but the independent analysis tends to be around 85,000 or so.
In addition to Tesla deliveries, powered by Model Y and the Shanghai plant, Elon Musk has plenty of levers if he wants to make a profit in the second quarter. These include recognition of zero emission credits and full-service driving income. Another quarter of Tesla’s earnings could drive Standard & Poor’s to add TSLA shares to the S&P 500 index.
Tesla shares, which were already rising before Tesla’s earnings news, rose 5.2% on Monday to 1,009.35. TSLA shares recovered once again from their 21-day moving average. Tesla’s shares have been consolidated since it hit a record 1,027.48 on June 10. It is too short to provide a legitimate point of purchase. On the upside, the RS line for Tesla stock is at a record.
Stock market rally conclusions
The recovery in the coronavirus stock market found support at key levels. But that does not mean that the Nasdaq will run at record levels again. The recovery in the coronavirus stock market had accelerated at an unsustainable rate. Lateral market action would be normal and healthy. It would allow leading stocks like Tesla and Lululemon to form new bases and moving averages to catch up.
But the stock market recovery is going to do what it is going to do. That could be a quick return to all-time highs or a strong pullback. Stay committed, stay flexible.
Read The Big Picture every day to stay in sync with market direction and major stocks and sectors.
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