Dow industrials led futures higher on Thursday, after Labor Department hiring data in June far exceeded expectations. Tesla also hit a heartbeat, scorching the Nasdaq 100’s head after reporting second-quarter deliveries. China’s actions flexed its muscles after strong sessions in Hong Kong and Shanghai. Shopify jumped on a target price hike, and Pfizer walked the Dow Jones today as investors continued to respond to news about the coronavirus vaccine on Wednesday.
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Dow Jones charged up to 1.3%. S&P 500 futures rebounded 1.2% above fair value, while Nasdaq 100 futures jumped 1% on the stock market today. Pfizer (PFE) rushed to the head of the Dow, up 2.4%, as optimism continued after promising results released on Wednesday of a joint coronavirus vaccine.
Tesla (TSLA) increased 8%, and United airlines (UAL) rose 2.8% on top of the Nasdaq 100. Shares of cruise lines and airlines occupied the top of the S&P 500.
China-based Anmes posted some strong initial moves after Chinese markets paved a major path in Thursday’s session, apparently buoyed by positive news from Pfizer regarding a possible coronavirus vaccine. Hong Kong’s Hang Seng Index was up 2.9%. The Shanghai compound rose 2.1%. The Hang Seng reached its highest close since March 11. Shanghai surpassed its March high to its best close in more than five months.
Alibaba Group Holdings (BABA) and NetEase (NTES) jumped more than 2% each. JD.com (JD) and Baidu (BIDU) rose more than 1%. Alibaba’s shares are trading below a buy point of 231.13 on a cup-with-mango basis.
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June hiring soars, weekly jobless claims stay constant
The shortened vacation week gave investors two pieces of information that normally move the market: the June Labor Department payroll report, as well as weekly unemployment claim numbers.
Nonfarm employers added 4.8 million workers in June, compared to 2.51 new hires in May and well above expectations for a payroll increase of $ 2.699 million. Manufacturing jobs increased by 356,000, compared to those exempted for a gain of 180,000 jobs. The unemployment rate fell from 13.3% to 11.1%, undermining the consensus target of 12.4%.
Unemployment claims for the first time reached 1,427 million for the week ending June 27. That was just above the forecast for 1.4 million claims, but continued a downward trend in weekly claims. Total uninsured reached 19.29 million, an increase of 59,000 during the previous week.
Leaderboard: Tesla, Shopify
Tesla rose 9%, pointing to another new high and a fourth consecutive advance. The company reported second-quarter deliveries of 90,650 vehicles, overwhelming estimates. Wedbush previously raised the share’s target price to 2,000, from 1,250, citing stronger-than-expected demand for the Tesla Model 3 in the summer season. Shares in the IBD leaderboard ended Wednesday 16.7% during the week, and 29% above a point of purchase after a break in early June.
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Shopify (SHOP) recovered 2.4% in the pre-marketing action. Baird raised its price target on the cloud-based e-commerce site to 1,100 from 820. The note said that channel checks showed strong growth in new merchants, gross merchandise volumes and the adoption of the Shopitfy Payments service from the company. IBD 50 shares have an annual gain of 156%.
Coronvirus Update: Global
Globally, countries confirmed nearly 220,000 new cases of coronavirus in the 24 hours through Thursday morning. The 2.1% increase increased the number of cases registered since the start of the outbreak above 10,829 million. Deaths increased by more than 4,900, an increase of 1%, bringing the total death count to 519,397. The proportion of cases registered in countries of the European Economic Area fell below 15%, with the EEA representing 34% of deaths, according to the European Center for Disease Prevention and Control. The case count in the United States on Thursday morning was almost 26% of the world total, and just over 25% of deaths.
According to Worldometer data, infections in the US continued to outpace all other countries, with another 52,156 confirmed new patients during the 24-hour period. Brazil confirmed almost 45,000 new infections. New cases in India increased by almost 20,000. South Africa reported an increase of more than 8,000 new patients. New cases from Russia increased by 6,700. Other countries reported 5,000 new cases or fewer on Thursday morning.
Coronavirus update: USA
The coronavirus in the US continued to spread at a 1.9% rate Wednesday through early Thursday. The increase in deaths was stable at around 0.5%. New York and New Jersey continued to maintain their increase in new cases at less than 0.2% each. California reported a 3.2% increase on Wednesday. New cases in Texas increased 4.9%. Florida cases increased 4.3%. Arizona’s growth rate increased to 6.2%.
States affected by case counts and declining health care capacity are adjusting their economies before the July 4 weekend. Reopening policies, particularly in bars, are seen as a source of the rebound of the virus after Memorial Day weekend in May. At least 13 states have reversed the policy, tightening restrictions on bars, restaurants, and other businesses. The governors of California, Texas and Arizona have ordered the closure of recently reopened bars, allowing only take-out service. Other states have ordered the closure of regional bases.
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Active cases continued to rise to new highs, rising more than 2% on Wednesday to a new record above 1.48 million. This gives an idea of the increased pressure on hospitals and healthcare workers. After falling at a rate of 1.5% or less for much of May and June, active cases have now risen more than 2% in five of the past seven days.
Testing continues at a high rate, with more than 620,000 tests administered on Wednesday, according to the COVID Tracking Project. Daily tests also reached record levels above 600,000 in four of the past seven days.
Aggressive Trader: Teladoc, Okta Stock
Teladoc’s shares traded 1.1% in pre-market stock. The shares reached 201.33 intraday on Wednesday, simply clearing a very short trend line. That could provide an early entry for TDOC shares. Investors could also use 208.73 as a high-handling buy point for a recent consolidation.
Okta rose 0.5% early Thursday morning. The cybersecurity leader cleared a brief consolidation on Wednesday. Too short for a proper base, but aggressive traders can use 205.81 or 206.19 as the entry point.
Dow Jones Today: a big market with two hearts
A few good things about the Dow Jones today. First, despite Wednesday’s weak performance, the index heads to Thursday’s session with a 2.9% rise during the week and a high in the trading range for the week. That’s a potentially bullish signal, if you can hold that ground until Thursday’s closing bell. A weekly chart shows Dow ping-ponging back and forth between 50 days of support on the low side and 200 days of resistance on the top. The 50 days had been rising towards the 200 days, reducing the range of the index. But now the 50 days are leveling off, which means industrialists can feel comfortable right where they are.
For a more detailed analysis of the current stock market and its status, study the big picture.
Does it matter A three-day rally left the Nasdaq gaining 4.1% for the week through Wednesday, at a new closing high and comfortably above 10,000. The S&P 500 is up 3.6% this week, and appears to have firm control at the 3,000 level as well as support at its 200-day level. Growth stocks are also declining, with the Innovator IBD 50 Fund (FFTY) now positive for the year, up 7% in June and positioned well below a point of purchase on a mango cup basis. The ETF gained 3.3% during the week through Wednesday. Investors following the confirmed bullish trend of the stock market can obviously post gains even while the Dow is lagging.
Inside the Dow Apple (AAPL) gained 14.7% in June. Microsoft (MSFT) made a profit of 11.1%. It was the third consecutive monthly advance for both actions. Nike (NKE) Visa (V) and House deposit (HD) stays close to the purchase points.
Cisco Systems (CSCO) has reached below a new point of purchase on a four-month fund basis. But the lagging, parallel action between most blue chips and small caps, as reflected in the very similar charts of the Dow and Russell 2000 industrialists, represents friction worth watching out for. It suggests that a large part of the market maintains a wait-and-see stance as the economies of the US and the world face the impact of the coronavirus pandemic.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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