Dow Jones futures and S&P 500 futures jumped Monday morning, while Nasdaq futures turned lower, as Moderna (MRNA) said its coronavirus vaccine is 94.5% effective. Meanwhile, JD.com earnings beat views.
XThe stock market rally is near highs but with leadership in flux amid soaring Covid vaccine progress and soaring coronavirus cases. Investors are moving into post-pandemic real economy stocks once again. Stay-at-home and other coronavirus plays sold off sharply last week on upbeat vaccine news.
Moderna Coronavirus Vaccine
The Moderna coronavirus vaccine data comes from the biotech's interim analysis of its final-stage trial. It comes one week after Pfizer (PFE) and BioNTech (BNTX) announced that their Covid vaccine is over 90% effective. Crucially, the Moderna coronavirus vaccine can be stored at normal refrigeration temperatures for weeks, while the Pfizer/BioNTech vaccine must be kept at ultra-low temperatures, complicating storage and distribution.
In the coming days, Pfizer and BioNTech will report on safety data, quickly followed by Moderna. In the next few weeks, both coronavirus vaccines may go to the FDA for emergency approval. In a best-case scenario, both Covid vaccines are approved with millions of Americans vaccinated by year-end.
Moderna stock leapt 14% before the open in huge volume. Shares shot up 23% last week, surging through the buy zone. on expectations that the Moderna vaccine would be as effective as Pfizer's.
BioNTech stock fell 7% before the open. Shares soared 15% last week on its vaccine news, breaking out and moving past the 5% chase zone.
Pfizer stock slid 2%. Shares rose 6% last week, but never closed above a buy point after briefly breaking out.
Coronavirus cases continue to soar in the U.S. But Pfizer (PFE) and BioNTech (BNTX) last week announced strong results for their coronavirus vaccine. Expectations are high that Moderna (MRNA) will report similar performance for its Covid vaccine, perhaps as early as Monday. Both coronavirus vaccines use mRNA technology.
Key Earnings Reports
JD.com (JD) reported better-than-expected third-quarter earnings before the open, while revenue was in line. Shares fell in premarket trading. The Chinese e-commerce giant closed near record highs Friday after a wild week.
Nio (NIO) and Nvidia (NVDA) also are earnings to watch this week. Nio earnings are late Tuesday. Nio stock and Chinese electric car rivals Xpeng Motors (XPEV) and Li Auto (LI) greatly extended even after a negative reversal Friday, even as Tesla (TSLA) slumps. Nvidia earnings are late Wednesday as data-center chip stocks struggled last week amid the coronavirus vaccine news.
Apple, Microsoft Holding Up
While many tech leaders sold off, Apple stock, the biggest of them all, edged higher. Also, the Apple (AAPL) ecosystem did relatively well, with Taiwan Semiconductor (TSM) rallying to new highs and iPhone chip suppliers Qualcomm (QCOM) and Qorvo (QRVO) holding steady after big gains.
Microsoft (MSFT), another Dow Jones tech titan like Apple, has formed a new handle.
JD.com stock, Tesla stock, Microsoft and Taiwan Semiconductor are on IBD Leaderboard. Taiwan Semiconductor stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. TSM and Nvidia stock are on the IBD 50.
5 Stocks Near Buy Points In Volatile Market
Dow Jones Futures Today
Dow Jones futures rose 1.7% vs. fair value, with Boeing (BA), Caterpillar (CAT), Disney (DIS) and Walmart (WMT) among the leaders. S&P 500 futures climbed 1.1%. But Nasdaq 100 futures turned a modest gain into a 0.3% loss. Late Sunday, Nasdaq futures were outpacing Dow Jones futures.
Dow futures, and individual stock action, suggest last week's move into travel and other post-pandemic, real-economy stocks will continue, with investors staying away from stay-at-home stocks.
Dow Jones giant Home Depot (HD) will buy HD Supply (HDS), its former unit, for $8 billion, or $56 a share. Home Depot archrival Lowe's (LOW) had been in the running for the industrial supplies distributor until recently.
China industrial production rose 6.9% in October vs. a year earlier, steady with September better than expected. Retail sales climbed 4.3%, up from September but missing views. Japan's economy rebounded at a faster-than-expected 21.4% annualized in the third quarter.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
That's been true over the past week, as Dow Jones futures — and Nasdaq futures — struggle to price in the combination of soaring Covid cases and just-around-the-corner coronavirus vaccines.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus Cases
Coronavirus cases worldwide reached 54.94 million. Covid-19 deaths topped 1.32 million.
Coronavirus cases in the U.S. have hit 11.36 million, with deaths above 251,000. New coronavirus cases hit a record 183,527 on Friday. Daily Covid cases in the U.S. have topped 100,000 every day since Nov. 3, Election Day.
Tesla CEO Elon Musk said over the weekend that "likely" has a "moderate case of Covid."
The U.S. is on a pace for one million new coronavirus cases per week, with that likely to rise in the coming days. Hospitalizations are at record levels and rising fast, with hospitals in many communities overwhelmed. Coronavirus deaths are rising, but still well below their spring peaks.
Several states and cities are stepping up restrictions, while other signs point to more social distancing. All of that could slow the economic recovery.
Stock Market Today: Do This Before Monday's Open
Stock Market Rally Last Week
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 29479.61 | +399.44 | +1.37 |
| S&P 500 | (0S&P5) | 3585.19 | +48.18 | +1.36 |
| Nasdaq | (0NDQC ) | 11829.29 | +119.70 | +1.02 |
| Russell 2000 | (IWM) | 173.44 | +3.46 | +2.04 |
| IBD 50 | (FFTY) | 37.61 | +0.25 | +0.67 |
Last Update: 4:04 PM ET 11/13/2020 |
||||
The stock market rally had a solid week, if you look at the major indexes.
The Dow Jones Industrial Average leapt 4.1% in last week's stock market trading. The S&P 500 index rose 2.2%. Both hit all-time highs Monday, but set record closes on Friday. The Nasdaq composite hit a record high Monday, but reversed lower on Monday and kept falling Tuesday. But the tech-heavy index bounced back to lose just 0.55% for the week.
Growth stocks had a tough week, especially coronavirus plays. Zoom Video (ZM) tumbled 20%, Peloton (PTON) 19%, Shopify (SHOP) 12%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) sank 4.8%. The iShares Expanded Tech-Software Sector ETF (IGV) lost 4%, with Microsoft stock a top holding. The VanEck Vectors Semiconductor ETF (SMH) only dipped 0.4%, despite hefty losses for Nvidia stock, AMD (AMD) and Monolithic Power Systems (MPWR). TSM stock and many chip-gear makers rallied, while Qualcomm just edged lower.
JD.com Earnings
JD.com earnings leapt 72% to 50 cents a share. Revenue climbed 36% to $25.66 billion. It was the second straight quarter of accelerating profit and sales growth. But while JD.com earnings per share topped views by 9 cents, revenue was just in line.
JD.com fell 1.5% before Monday's open.
JD.com stock closed Friday just below record highs, but that's after plunging below its buy point early last week before staging a recovery.
Chinese e-commerce plays are looking strong, boosted by Pinduoduo (PDD), Tencent (TCEHY) and Vipshop (VIPS) earnings last week. That's despite Beijing issuing draft rules targeting monopolistic behavior by big internet platforms. The notable exception is Alibaba (BABA), which appears to be the focus of the Chinese government's ire.
Apple Stock
Apple stock rose 0.5% last week to 119.26, but still remains relatively low in its base. The official buy point is 138.08, though investors could use 125.49 as an early entry. With the 5G iPhone cycle just underway, that could be a tailwind for Apple sales in the coming year, as well as iPhone chip plays such as Qualcomm, Qorvo and TSM stock.
Microsoft Stock
Microsoft stock punched above a 225.31 entry point on Monday morning, but reversed lower, closing just below its 50-day line Tuesday. Shares pared losses somewhat, to close off 3.3% at 216.51. MSFT stock now has a proper handle at 228.22, just above Monday's high.
Tesla Stock
Tesla stock popped Monday morning, but reversed lower, hitting resistance at its 50-day line and sinking 5% to 408.50. A 466 handle buy point remains.
Assuming Elon Musk recovers quickly from his apparent coronavirus illness, that should negligible impact on Tesla stock. But it's unclear what will be a catalyst for the big 2020 winner. Tesla stock is slumping even as China EV stocks skyrocket in recent weeks. If Nio, Xpeng and Li Auto roll over, will investors rush back into Tesla stock or exit?
Nio Stock
Meanwhile, Nio stock rose 7% last week, Li Auto 18% and Xpeng 21%. That's even after all three China EV stocks reversed lower Friday, perhaps sparked by a Citron Research sell rating on Nio stock. Xpeng and Li Auto reported strong sales, improving gross margins and bullish guidance last week. Investors will looking for more of the same from Nio, which has higher sales than the two 2020 IPOs do.
Even with Friday's 7.7% decline, Nio stock closed 65% above its 10-week line. Investors may want to take some profits in Nio stock ahead of earnings to lock in big gains.
Nvidia Stock
Nvidia stock, which broke out on Nov. 6, tumbled 8.7% last week, though it did manage to close above its 50-day line. Investors may want to treat 587.76, just above the Nov. 9 intraday peak, as the new buy point. While Nvidia earnings were strong before the coronavirus and growth should continue after the pandemic, investors may believe data-center chipmakers got an extra boost from the stay-at-home trend. AMD stock fell 5.2%, also just above its 50-day line. MPWR stock plunged 14% last week after soaring nearly 12% in the prior week.
What To Do Now
Investors should reevaluate the current holdings. Depending on the stocks they owned going into last week, they could have have a good, middling or rough week. You might have cut some stocks loose as they trigger sell rules. But you might need to do more, as the Moderna coronavirus vaccine news spurs further rotation.
Do a through review of your watchlists. There likely will be a fair amount of turnover. Focus on stocks with strong relative strength and cast a wide net.
This earlier Stock Market Today weekend article analyzed the stock market rally's recent action, including sector rotation and the paucity of stocks in or close to buy zones.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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