Dow Jones Futures Predict Mixed Stock Market Rally; Tesla Eyes Key Resistance; SEC Probe Slams Three Chinese Stocks
Dow Jones futures, along with the S&P 500 futures and Nasdaq futures, signaled a mixed open early Friday. Since the Nasdaq and S&P 500 nearly hit record highs, the coronavirus stock-market rally had a mixed session Thursday. Tesla shares and Amazon.com (AMZN) have defied all-time closing and Apple (AAPL) has closed in on a market cap landmark.
After the close, iQiyi (IQ) Chinese streaming service tumbled after an SEC accounting investigation was revealed. The news has also reached the majority owner of iQiyi stock, Baidu (BIDU). GSX stock sold off, too. Also accused of accounting fraud was chinese online education provider GSX Techedu (GSX).
Chip-equipment giant Applied Materials (AMAT) also posted earnings and guidance which were better than anticipated late Thursday. Early Friday AMAT stock rose 4 per cent.
This more than balanced the 2.15 per cent decline in Applied Materials Thursday when several other stocks of semiconductors declined after a solid Wednesday. A big reason: Intraday Micron Technology (MU) released an earnings notice. On Thursday, MU stock, already a lagard, dropped 4.8 per cent.
Stocks in the leaderboard stop at main levels
Amazon stock, Apple and Tesla (TSLA) are on the leaderboard of IBD. Apple stock can be found on SwingTrader.
Tesla accelerated the stock split rally on Wednesday, but encountered resistance just above its closing record high. TSLA stock jumped into overnight trade as two more bears threw in the towel, indicating a probability above key rates.
Amazon stock reversed lower just short of closing peaks and a purchasing environment that can be actioned. Apple hit a record peak and had almost surpassed a market value of $2 trillion.
Dow Jones Futures
Futures in Dow Jones fell by 0.3 per cent below fair value. S&P 500 futures were below break-even 0.1 per cent. Nasdaq 100 futures, supported by Tesla and AMAT, rose 0.25 percent. Note that overnight activity in Dow futures and elsewhere in the next daily stock market does not automatically turn into real trading
The Senate has gone into recess with no new stimulus package until Labor Day. On the ongoing economic recovery that might weigh that.
In July vs. a year ago, China's retail sales dropped unexpectedly 1.1 per cent, creating concerns about the rebound in the No. 2 world economy. Less than planned Industrial production grew. The Department of Commerce will announce US retail sales at 8:30 a.m. Mt: Mt.
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The Reports of Coronavirus
Worldwide, coronavirus cases stand at 21.10 million. Covid-19 deaths outnumber 758,000.
In the U.S., cases of coronavirus have reached 5.41 million, with deaths peaking at 170,000.
Coronavirus Heat Map: Covid Cases, Falling Deaths, Yet Does This
Coronavirus Rally on the Market
The coronavirus stock market rally began high once again with Tesla and Apple leading. But on Micron 's warning the bulls lost momentum.
While, in Thursday's stock market session, Dow Jones Industrial Average dropped 0.3 per cent. The S&P 500 index dropped 0.2 percent, only below its all-time high pre-pandemic. The Nasdaq composite, which dropped from Monday 's high around 1 point and turned negative briefly, settled for a gain of 0.3 per cent.
Apple stock grew on Thursday from 1.8 per cent to 460.04, supporting Dow, S&P and Nasdaq.
The Innovator IBD 50 ETF (FFTY) rose 0.4 per cent among the best ETFs. The ETF (IGV) Sector of iShares Expanded Tech Technology jumped 1.3 percent. About 1 percent fell in the VanEck Vectors Semiconductor ETF (SMH), indicating declines in Micron, AMAT stock and more.
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Business Wizard Mark Minervini says Amazon Supply Leads 8 Winners Setting Up Purchase Points
Production in Tesla
After rising intraday to 1651.18, Tesla stock popped 4.3 per cent to 1,621, just above its closing record. Shares on the five-for-one Tesla stock split shot up 13 per cent on Wednesday. That gave some violent entries but here the stock is being expanded.
Look for a move beyond the 1.650-1.660 range as a potential area of resistance.
The all-time intraday record from July 13 is 1794.99, but it turned dramatically lower when the Nasdaq unexpectedly tumbled lower.
Shares rose 3 per cent to 1,670 in premarket trading as Morgan Stanley raised Tesla shares to equal weight from underweight and Bank of America to underperformance neutral. Morgan Stanley increased the target price to 1.360. BofA's price target hiked from 800 to 1,750.
Amazon distribution
Amazon stock increased intraday to 3,217.52 but reversed to end fractionally lower at 3,161.02. That was just below its closing record of 3,225 on 6 Aug. Moving above the intraday high of 3247.47 that day will present a purchase opportunity
In the last several weeks, AMZN stock has reached resistance about that point many times. The one exception — as in Tesla shares — was a jump of July 13 to 3344.29.
China Feeling Anxiety
Baidu streaming video unit iQiyi announced that an accounting investigation was initiated by the SEC following an April study by Wolfpack Research, a short-selling company.
IQ stock ran 11 per cent overnight. Baidu declined 5 per cent. In bases both iQiyi and Baidu stock had been set up but neither was a leader.
IQiyi posted poor revenue from Q2 and had low guidance on Q3. Baidu also posted late Thursday to mixed quarterly results.
Meanwhile, in extended trading, GSX stock sunk by 7 per cent. Citron Research accused GSX Techedu of fraud at large.
Accounting questions about the U.S.-listed Chinese companies were a major problem many years ago, but this year came roaring back as Luckin Coffee exposed systematic sales fraud.
Congress is calling for legislation that would require international corporations to handle U.S. accounting, which Beijing has blocked. That could push off U.S. Chinese stocks.