Stock futures pared some early gains Friday, after a disappointing final monthly payrolls report for 2020, and as investors sorted through the impact of a historically chaotic week in the nation’s capital. Tesla and Baidu were early leaders for a second day. Bitcoin seemed unstopppable as it passed $41,000. Futu Holdings paced the IBD 50 list, and Chevron topped the Dow Jones today, as oil prices bounced to their highest level in 10-months.
Dow Jones futures eased to a 0.2% gain, S&P 500 futures held at 0.3% above fair value. Nasdaq 100 futures defended a 0.5% rise on the stock market today. Small caps showed early verve, with Russell 2000 futures rising 0.5%.
ATM operator Cardtronics (CATM) led the S&P 500, up more than 12% after reports of an unsolicited takeover offer at $39 per share, signaling a possible bidding war with current suitor Apollo Global Management. Online takeout service GrubHub (GRUB) and Bitcoin play MicroStrategy (MSTR) also traded high on the index.
China-based stocks were again influential in early action. Baidu (BIDU) led the Nasdaq 100, rallying 5.2% after Mizhuo hoisted the stock’s price target to 250, from 185. Futu Holdings (FUTU) raced 4.2% higher to lead the IBD 50 list. Futu broke out past a 51.20 buy point in a cup base on Tuesday.
Tesla (TSLA) rose 3.6%, after listing, late Thursday, a Model Y Standard Range option — something CEO Elon Musk said would never be offered. The IBD Leaderboard listing is extended, sitting on a 10-day advance, up 15.6% since the start of January and 75% above a 466 buy point following a Nov. 18 breakout.
Earnings: Micron, WD-40, PriceSmart
Membership club PriceSmart (PSMT) rallied 4.8%, after reporting a 2.8% increase in net merchandise sales for December. PriceSmart shares are extended, trading at their highest levels since November 2015.
Dow Jones Today: Chevron, Apple
Chevron (CVX) climbed to the top of the Dow Jones today, up 2.1% as oil prices rallied. West Texas Intermediate advanced 1.5%, approaching $52 a barrel — its highest price since February.
Apple (AAPL) notched an early 1.2% advance. The IBD Leaderboard stock is trading in a bit of a purgatory, comfortably above a 125.49 buy point. But hung up below a 138.08 entry to what IBD MarketSmith charts as a 17-week cup base. Apple briefly topped that buy point on Dec. 29, then pulled back more than 8% — triggering the automatic sell rule.
If shares retake the buy point in strong trade the stock would be a buy. But it has so far been tentative about what might come next.
Nasdaq, Nikkei, DAX Rally On Confirmation
While the White House, Congress and authorities in Washington, D.C., are still reeling after the storming of the Capitol by a pro-Trump mob on Wednesday, Congress’ confirmation early Thursday of the incoming Biden/Harris presidency marked a notable increase in clarity for the stock market. Moreover, the confirmation, combined with the Democrat’s sweep of Senate runoff election in Georgia on Tuesday make a quick dose of additional stimulus a near certainty.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The Nasdaq led a spirited rally as U.S. markets responded on Thursday, ending with a 2.6% gain. That pushed the Nasdaq into slightly extended territory, raising a mild warning flag for investors. Overseas, most markets in Asia picked up on the U.S. cues, with Hong Kong’s Hang Seng Index rallying 1.2%, and Tokyo’s Nikkei 225 bolting ahead 2.3% to a new record high.
Europe’s markets were mixed near mid-session, with Frankfurt’s DAX up 0.7% and the CAC-40 in Paris notching a 0.4% gain. Meanwhile, London’s FTSE 100 slipped less than 0.1%.
December Payrolls Drop Sharply
Nonfarm employers cut 140,000 workers from their payrolls in December, the Labor Department reported, a surprise reversal from November’s 336,000 worker increase and far below the 50,000 new hires projected by economists. Manufacturing showed an 38,000-worker incrase, but privte payrolls overall shrank by 95,000 jobs. The unemployment rate held steady at 6.7%, better than the forecast for an uptick to 6.8%.
ADP’s precursor report, the National Employment report on Wednesday, also sharply undercut expectations. It showed employers dropping 123,000 workers during December. Economists had anticipated a gain of 130,0000 paychecks.
Bitcoin Clears $41,000, Marathon Spikes
Bitcoin swept another 7.2% higher, obliterating record after record as it climbed past $41,322 early Thursday, according to CoinDesk. The cryptocurrency is now up more than 40% since Dec. 31.
Among bitcoin-related stocks, Marathon Patent Group (MARA) spiked 15.7%, after ending Thursday with a gain of 114% so far in January. MicroStrategy (MSTR) rose 6%, aiming to push its January advance to more than 40%.
Covid Vaccine Update: BioNTech, CureVac
As of Thursday, the Centers for Disease Control reported that 27.6% of the almost 24.42 million doses of vaccine so far distributed had been administered. The Federal Pharmacy Partnership for Long-Term Care Program, operated jointly with CVS Health (CVS) and Walgreens Boots Alliance (WBA), had vaccinated just over 603,000 persons, about 16% of the 3.77 million doses distributed to this point through the program. That means a total of just over 6.52 million Americans have received vaccines.
Texas has so far reported the highest number of first shot inoculations in the country, at 545,658. California has administered single doses to 528,173 persons.
Among vaccine makers, Germany’s BioNTech (BNTX) shot 4% higher after a Pfizer (PFE) study showed the BioNTech/Pfizer vaccine to be effective against the new, fast-moving variant of coronavirus that has spread from the U.K. to Europe and the U.S. In addition, the European Commission reportedly ordered the purchase of 200 million additional doses of the Pfizer/BioNTech vaccine, with an option for another 100 million doses for use in EU countries.
BioNTech stock had rebounded 14.9% for the week through Thursday, taking back a portion of a steep three-week dive. Pfizer shares moved up 0.4% in premarket action.
CureVac (CVAC) vaulted 6.7% higher, still gaining on Thursday’s announcement of a Covid-19 vaccine development partnership with Bayer (BAYRY). CuveVac shares were up 24.8% for the week through Thursday. The stock was extended after a rebound from support at its 10-week moving average.
Dow Jones Today: The Big Bank Theory
Banks have had a strong week, as bonds lost ground and the 10-year yield recovered to 1.08% — its highest level since March. But prospects are decidedly mixed for banks after Democrats won Georgia’s two Senate seats. That gave the party control of the Senate and the House, opening the door to potential banking reform regulation within the next two years.
Nevertheless, Goldman Sachs spiked more than 10% for the week through Thursday, pointing the stock toward its 10th consecutive weekly advance and lifting shares more than 29% above a 225.34 buy point after a mid-November breakout.
Peer JPMorgan climbed 6.9% through Thursday, advancing rapidly toward a 141.20 buy point in a year-long base pattern. The long consolidation has left the stock with a depressed relative strength rating of 63. But its relative strength line has climbed sharply over the past three weeks, and is knocking off 52-week highs.
Alternative Energy: Renesola Spikes, Sunrun Extends Breakout
The rally among alternative energy stocks showed some signs of cooling, although China’s ReneSola (SOL) spiked more than 10% after announcing the sale of a 12.3 megawatt project in Hungary. The stock posted a gain of more than 57% for the week through Thursday.
Fuel cell leader Plug Power (PLUG) climbed 3.8%, tacking toward a fourth straight advance after chalking up a 39.5% gain for the week through Thursday. Among other alternative energy plays, Clean Energy (CLNE) jumped 5.9%, Bloom Energy (BE) rallied 3.3% and SolarEdge (SEDG) gained 1.2%.
San Francisco-based Sunrun (RUN) gained 1.2% in premarket trade. The stock was extended at the closing bell on Thursday, after scoring a breakout Wednesday past a 74.24 buy point in a 13-week cup-with-handle base.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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