Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were up slightly after reversing from solid losses early Wednesday after President Trump threatened to veto the coronavirus stimulus deal.
On Tuesday, Dow Jones leader Apple advanced nearly 3%, while tech giants Peloton and Shopify surged to all-time highs. Tesla slid for a second straight day.
The Dow Jones Industrial Average fell 0.7%, or 200 points, while the S&P 500 slipped 0.2%. The tech-heavy Nasdaq composite moved up 0.5% and hit a record high Tuesday.
Among the Dow Jones leaders, Apple (AAPL) rallied 2.85%, while Microsoft (MSFT) rallied 0.6%. Tesla (TSLA) fell 1.5% sliding further from record highs. Meanwhile, Peloton (PTON) and Shopify (SHOP) surged 11.6% and 6.7%, respectively, to hit all-time highs.
Apple, Microsoft, Nike and Tesla are IBD Leaderboard stocks. Chegg was Friday’s IBD Stock Of The Day, while Qorvo was Tuesday’s IBD Stock Of The Day. DraftKings and Lululemon were featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Futures Today: Trump May Veto Stimulus Bill
Early Wednesday, Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were higher vs. fair value. Dow Jones futures rose 0.2%, while S&P 500 futures were up 0.2%. Nasdaq 100 futures moved up 0.1%. Remember that trading in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Late Tuesday, President Donald Trump threatened to veto the stimulus bill. In a video posted on his Twitter, President Trump called the stimulus bill “a disgrace.” He called on Congress to increase the direct payment from a “ridiculously low” $600 to $2,000 per person, or $4,000 per couple. Trump demanded Congress “to send me a suitable bill, or else the next Administration will have to deliver a Covid relief package…”
If Trump does veto the bill, Congress could override the veto with a two-thirds majority in both the House and Senate. Late Monday, the Senate voted 92-6 to approve the bill. The package passed the House earlier Monday evening in a 359-53 vote.
Amid the coronavirus stock market rally, the tech-heavy Nasdaq is up 42.7% for the year through Tuesday’s close. The S&P 500 is up 14.1%, while the DJIA is up 5.2% year to date.
U.S. Stock Market Today Overview
Last Update: 5:18 PM ET 12/22/2020
According to the Worldometer data tracker, the cumulative number of confirmed coronavirus cases in the U.S. topped 18.6 million on Tuesday. Total virus-related deaths rose past 330,000.
The cumulative total of worldwide Covid-19 cases confirmed since the start of the outbreak topped 78.2 million Tuesday, with more than 1.7 million virus-related deaths.
Coronavirus Stock Market Rally
November was a key month for the stock market. IBD’s The Big Picture flagged a new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, December sees the stock market near record highs, with the Nasdaq already setting more all-time records.
Monday’s Big Picture commented, “The stock market was not ready to give in to fear Monday, impressively digging itself out of a deep intraday hole. The bullish move keeps the market’s direction upright.”
Investors should continue to use the stock market’s strength to buy breakouts. Be patient and wait for powerful breakouts instead of chasing extended stocks. If the new breakouts work, then add more exposure. But if breakouts start to fail, then you can back away.
In particular, focus on stocks with strong relative strength. Find them by using the relative strength line. The RS line measures a stock’s price performance vs. the S&P 500. If the stock is outperforming the broader market, then the RS line angles upward. If a stock is performing worse than the broad market, then the line will point lower.
Dow Jones Stocks To Watch: Nike
Nike fell over 1% Tuesday, easing from Monday’s nearly 5% advance after the company reported strong quarterly earnings and sales results. Shares hit a new high Monday and moved above a 141.24 add-on entry on a three-weeks-tight formation.
The blue chip giant is the No. 3-performing Dow Jones stock for 2020, with a 40.6% advance through Tuesday.
Stocks In Or Near Buy Zones: Chegg, DraftKings, Lululemon, Qorvo
Friday’s IBD Stock Of The Day, Chegg, broke out above a 90.09 buy point in a cup base Monday with a 3.55% advance. Shares added 3.6% Tuesday and are at the top of the buy range. The 5% buy zone goes up to 94.59.
Last week, Lululemon broke out above a cup-with-handle’s 383.64 buy point. But shares gave up the entry on Friday. LULU stock moved down 3.6% Tuesday.
IBD Leaderboard member DraftKings gave up its 53.82 buy point in a cup with handle on Monday and fell further below the buy point Tuesday with a 1.8% fall. Shares broke out above the buy point on Dec. 16. DraftKings stock is about 2% below the entry, according to MarketSmith chart analysis.
Per Leaderboard commentary, “DraftKings is just below a cup-with-handle entry. Volume was weak as shares topped the entry. It was a deeper than normal pattern, and it’s also a riskier third- or fourth-stage base.”
Tuesday’s IBD Stock Of The Day, Qorvo, is rapidly approaching a 171 buy point in a rare ascending base. Shares rallied 1.4% Tuesday and are about 4% away from the new buy point.
According to IBD Stock Checkup, QRVO stock shows a 96 out of a perfect 99 IBD Composite Rating. The Composite Rating — an easy way to identify top growth stocks — is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths.
Peloton, Shopify Hit Record Highs
Peloton soared 11.65% to reach record highs Tuesday in the wake of Friday’s breakout above a 139.85 buy point in a cup base.
On Monday, the company said it would buy exercise equipment maker Precor for $420 million. That will help Peloton ramp output of its cycles and treadmills.
Shopify advanced 6.7% to hit an all-time high Tuesday. Shares are nearly 15% above a 1,112.51 buy point in a double bottom with handle.
IBD Leaderboard stock Tesla slid as much as 5.5% before paring losses to 1.5% Tuesday. The stock added to Monday’s 6.5% dive and is about 8% off its record high.
On Nov. 18, shares broke out above a 466 buy point in a cup with handle and are more than 35% from the buy point. On Dec. 18, Tesla stock hit a record high at 695.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved further above an aggressive entry at 125.49 amid Tuesday’s 2.85% rise. Shares are rapidly approaching the conventional buy point, which is at 138.08, according to MarketSmith chart analysis.
The blue chip giant is the No. 1-performing Dow Jones stock for 2020, with a 79.6% advance through Monday.
Software giant Microsoft moved up 0.6% Tuesday, as shares moved further above their key 50-day line. Shares are also approaching a 228.22 buy point.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones futures.
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