Dow Jones futures rose slightly on Thursday afternoon, as did S&P 500 futures and Nasdaq futures, as US markets were closed for the Thanksgiving holiday. Apple, Microsoft and Tesla are in the news.
The stock market rally was positive for the second straight session on Wednesday. Fed officials see slower rate hikes coming “soon,” according to Fed minutes from the November meeting released Wednesday afternoon.
The Nasdaq led, buoying by rebounding 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 helpful.
Investors should be wary of adding exposure due to key technical resistance and significant economic reports ahead.
But, Dexcom (DXCM), United Health (UNH), Neurocrine Biosciences (NBIX), Medpace Holdings (MEDP) and Medical Shockwave (SWAV) five healthcare stocks showing interesting action.
DXCM and Neuroscience Biologics are on the IBD Leaderboard, and MEDP is on the Leaderboard watch list. NBIX and Medpace stock is on the IBD 50.
Tesla FSD Beta Released
Tesla CEO Elon Musk tweeted on Thursday that a Full Self-Driving Beta is now available to any FSD owners in North America who request it.
That could allow Tesla to recognize 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 Department of Justice is said to be conducting a criminal investigation into Tesla’s self-driving claims.
Tesla stock jumped 7.8% to 183.20 on Wednesday, rebounding from Tuesday’s bear market lows when Citigroup upgraded the EV giant from sell to hold. TSLA stock is still down 19.5% so far this month and will roughly halve in 2022.
Dow Stock Deal News
In Dow Jones stock news, Apple (AAPL) is reportedly interested in buying the UK soccer giant Manchester United (MANU). The Federal Trade Commission may try to block the Microsoft (MSFT) deal to buy Activision Blizzard (ATVI) nearly $69 billion.
Dow Jones futures today
Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures advanced 0.2% and Nasdaq 100 futures advanced 0.4%.
Mainland China reported more than 31,000 Covid cases, including those without symptoms, topping mid-April levels during the Shanghai lockdown. covid infections with symptoms are still below the April peak.
US stock exchanges will be closed on Thursday for the Thanksgiving holiday. On Friday, US exchanges will close early at 1 pm ET. But other exchanges around the world are usually open on Thursdays and Fridays.
Remember that overnight activity in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
There were some wobbles at the stock market rally on Wednesday, but gains extended, led by techs.
Initial jobless claims rose by three months and ongoing claims achieved an eight-month best. S&P Global purchasing managers’ indexes for US manufacturing and services both showed contraction.
The Fed’s minutes reinforced expectations for a 50 basis point rate hike at the December 14 meeting. Markets still favor another half point move in February, but there is a good chance of a quarter point rise.
The Dow Jones Industrial Average rose 0.3% in stock market trading on Wednesday. The S&P 500 index climbed 0.6%, led by TSLA stock. The Nasdaq composite rose 1%. The small-cap Russell 2000 rose 0.1%.
US crude oil prices fell 3.7% to $77.94 a barrel. Natural gas futures jumped 7.2%.
The 10-year Treasury yield fell 5 basis points to 3.71%. The two-year Treasury yield, which was closer to the Fed’s rate hike expectation, fell below 4.5%.
The US dollar fell significantly for the second straight session, back near recent lows.
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The iShares Advanced Technology Software Sector ETF ( IGV ) rose 1.5%. VanEck Vectors Semiconductor ETF (SMH) gained 0.9%.
The SPDR S&P Metals & Mining ETF (XME) edged up 0.3%. US Global Jets ETF (JETS) was 0.1% higher. SPDR S&P Homebuilders ETF (XHB) rose 0.5%. The Energy Select SPDR ETF (XLE) fell 1.1%. The Health Care Selective SPDR Fund (XLV) rose 0.4%. Dow Jones giant UNH stock is the top holding in XLV.
Reflecting a more speculative story stocks, ARK Innovation ETF (ARKK) rose 2.9% and ARK Genomics ETF (ARKG) rose 0.9%. TSLA stock is a large holding across Ark Invest’s ETFs.
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Stocks to Watch
Dexcom stock advanced 1.7% to 112.92, finding support at its 21-day moving average. DXCM stock is stalling this month after missing out on earnings on October 28th. Dexcom stock could be said to have a long handle with a 123.46 buy point from a seven-month consolidation. Investors could buy DXCM stock from an early entry off the 21-day line, perhaps using Tuesday’s high of 113.88 as a separate buy point.
Medpace stock fell 1.3% to 218.81 on Wednesday. Shares are consolidating near record highs since skyrocketing 38% on October 25 after earnings. Since then, MEDP stock has been creating a messy handle on a deep cup basis throughout the year. While shares have had some big intraday swings, MEDP stock is currently on track to form a solid three-week pattern by Friday’s close. Investors could use the November 15 close of 226.57 as an early entry, above most of the recent trade.
NBIX stock sank 1.5% to 118.97. Shares are consolidating near multi-year highs, a stretch from the October breakout. Despite falling to the 50-day line last week, Neurocrine stock has a solid three-week pattern that is on track for a fourth week. Technically, there is a buy point of 126.09, although investors could wait for some quieter action.
Shockwave stock rose 4.7% to 264.06 on Wednesday, back above its 21-day line but hitting resistance at the 50-day line. After a failed breakout in late October and a sharp selloff that followed through earnings, SWAV stock has been bouncing back over the past week. A new base will take more time, but aggressive investors could use a strong move above the 50-day as an early entry.
UNH stock climbed 1.3% to 529.71, retreating above its 50-day and 21-day lines after briefly cutting its 200-day line last week. UnitedHealth stock has been a Long-Term IBD Leader and still has many attributes. Investors could use a bounce from the 50 day line as an early entry or as a Long Term Leader entry. UNH stock needs to form a new base after it quickly failed to break out of a cup-to-handle base last month.
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Market Rally Analysis
A stock market rally added to Tuesday’s gains. The S&P 500 reached its intraday high of November 15 and closed within 1% of its 200-day line.
The Russell 2000 came up to its 200-day line.
The Nasdaq posted a rebound on Tuesday from its 21-day moving average, although it remains below its November 15 short-term high and well below its 200-day.
The Dow Jones came within 20 points of its August 16 intraday high.
The S&P 500 moving decisively above its 200-day line — which comes around the year-long downtrend — is a huge test for the market’s major move.
A flurry of economic data could swing Fed rate expectations and thus the stock market. On Wednesday, November 30, the October JOLTS report will show job openings, and Fed chief Jerome Powell will speak later in the day. On Thursday, the PCE price index, the Fed’s preferred inflation gauge, will be released, along with jobless claims and the ISM manufacturing index. The November job report is due Friday, November 2.
Ideally, the market would move sideways for a few days, allowing at least the 21-day line to come up, going into those economic reports.
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What To Do Now
The market rally has shown some nice gains this week, with more stocks flashing buy signals over the past few days. Investors may have added slightly more exposure as a result.
But they may want to be cautious about making significant new purchases with the S&P 500 hovering below its 200-day line and so many key economic factors for next week’s Fed.
Also consider taking some partial profits in fast-rising stocks. Stocks are making short-term gains amid uptrends and sector rotation.
However, investors should be working hard on their investment shopping lists, looking for actionable setups and names across different 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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