Dow Jones futures rose Tuesday morning, along with S&P 500 futures and Nasdaq futures amid the latest stimulus deal moves and coronavirus vaccine news as well as an Apple iPhone production report. The stock market rally had a mixed session Monday as U.S. coronavirus vaccine immunizations began. The Nasdaq led while many growth names cleared buy points, including AMD stock, PayPal (PYPL), Peloton Interactive (PTON), Innovative Industrial Properties (IIPR) and Penn National Gaming (PENN).
On the downside? Coronavirus vaccine stocks Pfizer (PFE) and BioNTech (BNTX) sold off Monday while Moderna (MRNA) also fell. Chinese internet giants JD.com (JD), Pinduoduo (PDD), Tencent (TCEHY) and BABA stock showed weakness as regulators levied small fines vs. Alibaba (BABA) and a Tencent unit. Finally, just-debuted IPO stocks Airbnb (ABNB), DoorDash (DASH) and C3.ai (AI) fell sharply.
Advanced Micro Devices (AMD), AppleAAPL, PayPal and IIPR stock are on IBD Leaderboard. Peloton stock, PayPal and Penn National Gaming are on SwingTrader. PayPal stock is on IBD Long-Term Leaders. AMD stock, PayPal and Innovative Industrial Properties are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures rose 0.6% vs. fair value. S&P 500 futures advanced 0.7%. Nasdaq 100 futures climbed 0.65%.
Apple, Chipmakers Lift Futures
Apple (AAPL) plans to make up to 96 mil iPhones in the first half of 2021, a 30% year-over-year increase, Nikkei reported. Apple stock, a Dow Jones, S&P 500 and Nasdaq component, rose 2% before the open. Some Apple iPhone chipmakers also showed slim gains before the open.
Taiwan Semiconductor Manufacturing (TSM) will see 20% increase in 5-nanometer chips in the first half of 2021, DigiTimes reported.
Several other chip stocks rose early Tuesday, including AMD and Lam Research (LRCX), as Goldman Sachs issued a slew of price target hikes.
Stimulus Deal Proposal
A bipartisan group of senators late Monday revised their stimulus deal proposal by breaking it in two. One bill would have $748 billion for generally popular ideas, including $300 a week in jobless benefits and another $300 billion for business loans. Another $160 billion bill would include the decisive issues of business liability protection and money for state and local governments.
President Donald Trump said he Monday wants checks to every American as part of a stimulus deal. That would likely be popular, but would raise the stimulus deal price tag.
China retail sales rose 5% in November vs. a year earlier, up from October’s 4.3% but slightly below views. Industrial production climbed 7%, in line with views and just above October’s 6.9%.
The Federal Reserve begins its final policy meeting of the year today, with an announcement due Wednesday afternoon.
FDA staff backed giving emergency approval to the Moderna coronavirus vaccine in documents released Tuesday morning. They showed the Moderna vaccine to be safe and effective. On Thursday, an FDA advisory panel will consider the Moderna vaccine, with an FDA emergency use authorization seen right after that.
Pfizer coronavirus vaccine immunization jabs began Monday. That followed the FDA’s late Friday move to give emergency approval to the Pfizer and BioNTech vaccine late Friday.
The Moderna vaccine will have more doses available in the initial first few days than the Pfizer vaccine, and will be spread widely into rural areas.
For these Covid vaccine stocks, Pfizer stock fell 4.6% on Monday. BioNTech stock tumbled 15%. Moderna stock dipped 1.2% after initially rising modestly.
Coronavirus cases worldwide reached 73.32 million. Covid-19 deaths topped 1.63 million.
Coronavirus cases in the U.S. have hit 16.94 million, with deaths above 308,000.
New York City Mayor Bill De Blasio warned Friday that the city could go into a “full shutdown” soon as coronavirus cases soar there. Much of California is under increasing restrictions, with Los Angeles among the toughest. Germany will begin a hard lockdown starting Wednesday.
Stock Market Rally
U.S. Stock Market Today Overview
Last Update: 4:14 PM ET 12/14/2020
The stock market rally had a mixed session. The Dow Jones and S&P 500 led gains before and just after the open, but soon the Nasdaq and tech leaders took over. The Nasdaq pared gains into the close, as fears of coronavirus restrictions weighed on Covid vaccine stock market enthusiasm.
The Dow Jones Industrial Average fell 0.6% in Monday’s stock market trading. The S&P 500 index lost 0.4%. The Nasdaq composite climbed 0.5%, but closed near session lows.
Growth stocks also came off highs, but generally fared well. Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.8%. The Innovator IBD Breakout Opportunities ETF (BOUT) climbed 1.6% to a fresh high after jumping 5% last week. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.6%. The VanEck Vectors Semiconductor ETF (SMH) rallied 1%, rebounding from solid losses last week. AMD stock is a notable holding.
New IPOs Tumble
Airbnb stock fell 6.6% in Monday’s trading, while DoorDash stock was down 8.6%. Anyone who bought either of these much-hyped IPO stocks last week is now sitting on a substantial loss. AI stock sank 14%, though it’s not at a post-IPO low.
While all three IPOs priced high and then surged in last week’s debuts, investors should wait several days or weeks until they set up in at least an IPO base. Sometimes that initial base will follow a strong run from the opening day’s price. But often IPOs will consolidate or plunge. Some may not form proper bases for months or years, such as Facebook (FB) and Snap (SNAP).
PayPal stock popped 3.1% to 220.79 after hitting 223.16 intraday. That reclaimed a 215.93 entry from a short consolidation. PYPL stock is still in range from that point. But the more-actionable resistance area is probably the early December high handle, which offered a buy point of 220.67. Investors could have started a position around 219.
The relative strength line for PYPL stock is not quite at a new high, but did top where it was in the high handle. The RS line, which tracks a stock’s performance vs. the S&P 500 index, is the blue line in the charts provided.
PayPal stock was Monday’s IBD Stock Of The Day.
Innovative Industrial Properties stock, a profitable marijuana REIT, jumped 4.7% to 168.62, hitting a new high. That cleared a three-weeks-tight pattern — almost a flat base — with a 165.09 buy point. Aggressive investors could have bought IIPR stock last week from a downward-sloping trend line or at 160.25. Volume was more than double normal trade.
The RS line for IIPR stock is at a new high.
After the close, Innovative Industrial Properties raised its quarterly dividend by 6% to $1.24 a share. It also announced an expansion of its New York real estate partnership with PharmaCann. IIPR rose modestly overnight.
Unlike AMD stock, PayPal, IIPR or Penn Gaming, Peloton stock isn’t hitting or flirting with a new high. On Monday PTON stock rose 4.1% to 121.91, breaking a downtrend while also rebounding from its 50-day line. It’s a place where investors could start buying Peloton stock, with the goal of filling it as it clears resistance above 132.89 or the official buy point of 139.85.
It may seem odd to be buying a strong coronavirus stock as the Covid vaccine rolls out. But for now, coronavirus restrictions are intensifying, while the workout-at-home trend is likely to continue for some time.
AMD stock rose 3.4% to 94.78, a new closing high. Last week the chipmaker found support just above its 88.92 double-bottom buy point as well as its 21-day exponential moving average. With Monday’s move, AMD stock is back near the top of a high handle. The official alternate entry would be 96.47, just above the Dec. 2 peak. But investors could have bought AMD stock as it broke a short trend line in that handle. Another early entry is at 95.10.
After the close, Goldman Sachs raised its AMD stock price target to 110 from 96. Shares rose 1% early Tuesday.
AMD stock was Monday’s IBD 50 Stock To Watch.
Penn National Stock
Penn National stock rallied 6.2% to 79.01, reclaiming a 76.72 buy point in heavy volume, according to MarketSmith analysis. PENN stock hit a record 84.49 intraday, but closed well off that level. The casino operator, which bought Barstool Sports as it expands into online sports betting, is expected to report strong revenue growth and a return to profits in 2021, especially as the economy fully recovers.
Stock Market Rally Lesson
The late afternoon selling wasn’t a great sign. But overall the market rally is looking solid. The major indexes are all above their 21-day lines while leading stocks are healthy. The overall stock market will likely continue to rise and fall on coronavirus vaccine and shutdown news for the next several weeks. It’s unclear which will have the upper hand. Meanwhile, the leading stocks could be in flux. Will coronavirus plays like Peloton stock thrive or will they be left behind? As Monday’s action showed, stock market rally leaders could hail from a variety of sectors, from AMD stock to Penn National Gaming.
As always, don’t try to predict where the stock market rally will go next. Be alert, be flexible and be decisive.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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