Dow Jones futures were up slightly on Thursday night, along with S&P 500 futures and Nasdaq futures after U.S. markets were closed for the Thanksgiving holiday. Apple, Microsoft and Tesla are in the news.
The recovery of the stock market was positive for the second session in a row on Wednesday. Fed officials see a slower rate hike coming “soon,” according to the Fed’s November meeting minutes released Wednesday afternoon.
The Nasdaq led, supported by a rebound Tesla (TSLA). All major indexes are solidly up so far in this holiday-shortened week. However, a longer holiday to revive the market could be constructive.
Investors should be cautious about adding exposure given the key technical resistance and significant economic news ahead.
However Dexcom (DXCM), UnitedHealth (UNH), Neurocrine Biosciences (NBIX), Medpace Holdings (MEDP) a Shockwave Medical ( SWAV ) are five healthcare stocks showing interesting action.
DXCM and Neurocrine Biosciences shares are on the IBD ranking, MEDP shares on the watch list. NBIX and Medpace shares are on the IBD 50.
Beta version of Tesla FSD
Tesla CEO Elon Musk tweeted Thursday that the fully self-driving Beta version is now available to all FSD owners in North America who request it.
This 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 Justice Department is reportedly conducting a criminal investigation into Tesla’s self-driving claims.
Tesla shares jumped 7.8% to 183.20 on Wednesday, rebounding from Tuesday’s bear market lows as Citigroup upgraded the EV giant from sell to hold. TSLA shares are still down 19.5% so far this month, and will roughly halve in 2022.
Dow Stock News
In Dow Jones news, Apple ( AAPL ) is reportedly interested in buying the British soccer giant Manchester United (MANU). The Federal Trade Commission may try to block it Microsoft (MSFT) purchase agreement Activision Blizzard (ATVI) for almost 69 billion dollars.
Dow Jones Futures Today
Dow Jones futures are up a fraction of fair value. S&P 500 futures rose 0.15% and Nasdaq 100 futures rose 0.3%.
The yield on 10-year government bonds fell by 4 basis points to 3.67%.
Mainland China has reported more than 31,000 Covid cases, including those without symptoms, surpassing levels seen in mid-April during Shanghai’s lockdown. Covid infections with symptoms are still below the April highs.
US stock markets were closed on Thursday for the Thanksgiving holiday. On Friday, US markets will close early at 1:00 PM ET. But other exchanges around the world are open normally on Thursday and Friday.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading on the next regular exchange.
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Stock market rally
The stock market recovery had some swings on Wednesday, but extended gains, led by technicians.
Initial jobless claims rose to a three-month high, while continuing claims hit an eight-month high. The S&P Global purchasing managers’ index for US manufacturing and services signaled a decline.
The Fed’s minutes reinforced expectations of a 50 basis point rate hike at its December 14 meeting. Markets still favor another half-point move in February, but there’s a decent chance of a quarter-point increase.
The Dow Jones industrial index rose by 0.3% in Wednesday trading. The S&P 500 rose 0.6%, led by TSLA shares. The Nasdaq Composite Index fell 1%. The small-cap Russell 2000 strengthened by 0.1%.
U.S. crude oil prices fell 3.7% to $77.94 a barrel. Natural gas futures jumped 7.2%.
The yield on 10-year government bonds fell by 5 basis points to 3.71%. The two-year Treasury yield, more closely tied to the prospect of a Fed rate hike, fell below 4.5%.
The US dollar fell sharply for the second session in a row, returning near recent lows.
Why this IBD tool makes it easy to find the best stocks
The iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.5%. VanEck Vectors Semiconductor ETF (SMH) gained 0.9%.
The SPDR S&P Metals & Mining ETF (XME) gained 0.3%. The US Global Jets ETF (JETS) surged 0.1%. The SPDR S&P Homebuilders ETF ( XHB ) rose 0.5%. The Energy Select SPDR ETF (XLE) fell 1.1%. The Select Sector Healthcare SPDR Fund ( XLV ) rose 0.4%. Dow Jones giant UNH shares are the top holding in XLV.
Mirroring the more speculative story stocks, the ARK Innovation ETF ( ARKK ) jumped 2.9% and the ARK Genomics ETF ( ARKG ) jumped 0.9%. TSLA stock is the lead holding in Ark Invest’s ETF.
Top five Chinese stocks to watch
Actions to watch
Shares of Dexcom advanced 1.7% to 112.92, finding support at the 21-day moving average. DXCM shares have been on hold this month following an Oct. 28 earnings miss. Dexcom stock is likely long-handled with a 123.46 buy point from a seven-month consolidation. Investors could buy DXCM shares from the early entry from the 21-day line, perhaps using Tuesday’s high of 113.88 as a specific buy point.
Medpace shares fell 1.3% to 218.81 on Wednesday. The stock is consolidating near record highs as it surged 38% on Oct. 25 after taking earnings. Since then, MEDP events have been forging a chaotic handle on the deep, year-round cup stand. While shares have seen large intraday swings, MEDP shares are currently on track to form a three-week tight pattern by Friday’s close. Investors could use the November 15 close at 226.57 as an early entry, above most of the recent trading.
Shares of NBIX fell 1.5% to 118.97. Stocks are consolidating near multi-year highs, extended from the October breakout. Despite breaking past the 50-day mark last week, Neurocrine shares have a three-week tight pattern that is on track to enter a fourth week. Technically, this has a buy point at 126.09, although investors may want to wait for calmer action.
Shares of Shockwave jumped 4.7% to 264.06 on Wednesday, back above its 21-day mark but hitting resistance at the 50-day mark. SWAV stock has bounced back over the past week after a failed selloff in late October and a sharp selloff that continued through gains. The new base will take more time, but aggressive investors could use a strong move above the 50-day mark as an early entry.
Shares of UNH rose 1.3% to 529.71, bouncing above the 50-day and 21-day lines after briefly undercutting the 200-day mark last week. UnitedHealth stock used to be a long-time IBD leader and still shares many of the same characteristics. Investors could use the bounce off the 50-day line as either an early entry or a long-term leader entry. UNH stock needs to make a new base after it quickly failed to break out of the cup-with-handle base last month.
Tesla vs. BYD: Which EV Giant is better to buy?
Market rally analysis
The recovery of the stock market was added to Tuesday’s gains. The S&P 500 just broke its intraday high of Nov. 15 and closed within 1% of its 200-day line.
The Russell 2000 came up to its 200-day line.
The Nasdaq added to Tuesday’s bounce from its 21-day moving average, though it is still below its short-term high of Nov. 15 and well below the 200-day.
The Dow Jones is within 20 points of its August 16 intraday high.
The S&P 500 moving decisively above its 200-day line — which roughly coincides with the year-long trend line of declining highs — is a huge test for the market’s recovery.
The amount of economic data could change expectations of the Fed and thus the stock market. On Wednesday, November 30, the October JOLTS report will show job vacancies, with Fed Chair Jerome Powell speaking later in the day. PCE, the Fed’s favorite gauge of inflation, will be released on Thursday, along with jobless claims and the ISM manufacturing index. The November job overview is due to be released on Friday, November 2.
Ideally, the market would move sideways for a few days, let it catch up to at least the 21-day mark, and head into these economic reports.
Time The Market with IBD ETF Market Strategy
The market rally has shown some nice gains this week, with more stocks flashing buy signals in recent days. Investors may have added a little more exposure as a result.
However, they may want to be cautious about making significant new purchases with the S&P 500 trading below its 200-day low and next week being so economically critical for the Fed.
Also consider partial profits in fast-growing stocks. Stocks made short-term gains amid a choppy uptrend and sector rotation.
Still, investors should work diligently on their investment shopping lists, looking for setups and usable names across 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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