Dow Jones Futures Jump 225 Points Ahead Of Fed Chief Powell Comments In Surging Stock Market Rally – Investor’s Business Daily
Dow Jones futures rallied more than 225 points before trimming gains early Wednesday, along with S&P 500 futures and Nasdaq futures, after Tuesday’s coronavirus stock market rally surged higher following President Trump’s reported $1 trillion infrastructure proposal, strong retail sales and bullish Covid-19 drug news. Top growth stock Advanced Micro Devices headlines these six top stocks in or near buy zones.
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The coronavirus stock market rally continued Tuesday with a sharp rise, as the Dow Jones Industrial Average surged 526 points. Advanced Micro Devices (AMD), Alibaba (BABA), Domino’s Pizza (DPZ), Lam Research (LRCX), Netflix (NFLX) and Qorvo (QRVO) are in or near new buy zones. Dow Jones stock leaders Apple (AAPL) and Microsoft (MSFT) are approaching record highs.
Dow Jones Futures Today: Fed Chief Powell
The Dow Jones futures moved up 0.6% vs. fair value, while S&P 500 futures gained 0.55%. Nasdaq 100 futures rose 0.8% vs. fair value. Remember that overnight action in Dow Jones futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
On Tuesday, the Nasdaq composite rallied 1.75%. The S&P 500 moved up 1.9%, while the Dow Jones industrials surged over 2%.
Federal Reserve Chairman Jerome Powell will testify before the House Financial Services Committee Wednesday. On Tuesday — in testimony prepared for the Senate Banking Committee — Fed chief Powell said the Federal Reserve would vary corporate bond buying based on market conditions and that it didn’t want to run through the bond market “like an elephant.”
He also commented that economic activity is still “far below” their pre-pandemic levels.
According to a Bloomberg report, the Trump Administration is preparing a nearly $1 trillion infrastructure proposal to help the U.S. economy recover from the coronavirus outbreak. The report said a preliminary version being prepared by the Department of Transportation would reserve most of the money for traditional infrastructure work, like roads and bridges, but would also set aside funds for 5G wireless infrastructure and rural broadband.
Meanwhile, May retail sales rebounded 17.7%, handily surpassing expectations for a 7.5% bounce. The figure prompted President Trump to tweet, “Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected. Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!”
Among exchange traded funds, Innovator IBD 50 (FFTY) gained 1.6% Tuesday. The ETF of top growth stocks is about 10% off its 52-week high.
The Nasdaq 100-linked Invesco QQQ Trust (QQQ) ETF moved up 1.7% to close at 242.85. Meanwhile, the SPDR S&P 500 ETF (SPY) moved up 1.9% to 312.96.
Within the coronavirus stock market rally, the tech-heavy Nasdaq is off its record highs, but traded up 10.3% for the year through Tuesday’s close. Meanwhile, the S&P 500 and Dow Jones Industrial Average are down 3.3% and 7.9%, year to date, through the June 16 close.
Coronavirus Drug News
On Tuesday, the race for a coronavirus treatment received a dose of good news after trial results from University of Oxford showed dexamethasone reduced deaths rates for severely ill Covid-19 patients. Dexamethasone is a cheap, low-dose steroid treatment used to reduce inflammation in other diseases.
The coronavirus outbreak continues to spread across the U.S. According to the Worldometer data tracker, the cumulative number of confirmed U.S. cases approached 2.2 million Tuesday.
Confirmed Covid-19 cases worldwide climbed above 8.2 million, with more than 443,000 virus-related deaths, and Mexico becoming a new hot spot. On June 13, Mexican authorities confirmed new coronavirus cases reached their highest daily count at more than 5,200 cases.
Coronavirus Stock Market Rally
According to IBD’s The Big Picture, the stock market uptrend remains strong after hitting lows nearly three months ago on March 23. The major stock indexes confirmed a new uptrend on April 2.
Per Tuesday’s The Big Picture, “With just two distribution days in the S&P 500 and Nasdaq, the market has a bit less weight on its shoulders. Thursday’s sell-off still stands out as a schism in the index charts, so don’t drop your guard just yet.”
Stocks to watch include the top stocks on IBD Long-Term Leaders. The IBD Long-Term Leaders list focuses on companies with stable earnings growth and price performance.
Coronavirus Stock Market ETF Strategy And How To Invest In The New Uptrend
Stocks In Or Near Buy Zones
In the coronavirus stock market rally, six top stocks in or near buy zones include AMD, Alibaba, Domino’s Pizza, Lam Research, Netflix, and Qorvo.
AMD Stock
Tuesday’s IBD 50 Stocks To Watch pick, Advanced Micro Devices remains about 7% below a recent 58.73 buy point in a cup with handle after a June 10 breakout failed, according to MarketSmith chart analysis. Meanwhile, the stock also triggered the 7%-8% loss-cutting rule from a 57.08 early entry point.
But the stock is still holding above the 50-day moving average line, a key support level. If the stock continues to rebound, look for a powerful price move past 59.10, which could loom as a new buy point. Shares slid 0.4% Tuesday.
AMD stock ranks No. 6 in the IBD 50. (The IBD 50 is a list of leading growth stocks with strong relative price strength and top-notch fundamentals.)
According to the IBD Stock Checkup, AMD stock has a highest-possible 99 IBD Composite Rating, placing it in the upper echelon of growth stocks. 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.
Alibaba Stock
Chinese e-commerce giant Alibaba, after Tuesday’s 2.6% advance, is back in buy range above a 221.26 buy point in a cup with handle from a breakout on June 10. The 5% buy zone runs up to 232.32.
A previous breakout above a 216.20 entry failed when the stock fell more than 7% below the entry, triggering the 7%-8% loss-cutting sell rule.
Domino’s Pizza
IBD Leaderboard stock Domino’s Pizza continues to hold just above its 50-day moving average line. The stock tested the key support level on Friday and again Monday after a short-lived breakout attempt above a 387.95 buy point in a flat base, according to MarketSmith chart analysis. Shares fell 0.7% Tuesday.
According to IBD Leaderboard commentary, “Domino’s is below the buy point of a flat base but there’s no sell signal. It was cut from three-quarters to a half position on June 5.”
Domino’s stock was featured in this week’s Stocks Near A Buy Zone column.
Lam Research Stock
Lam Research stock is nearing a breakout past a 310.10 entry in a cup with handle. Shares jumped nearly 5% Tuesday after Morgan Stanley upgraded the stock from equal-weight to overweight with a 334 price target. Shares ended just below the entry.
Bullishly, the stock’s RS line is nearing new highs, indicating the stock could be a potential winner in the current stock market rally.
Netflix Stock
Netflix advanced 2.5%, as it continues to rebound from the 50-day moving average line. The FANG stock is also an IBD Leaderboard stock.
On Friday, the FANG stock leader slid 1.8% to close below its 50-day moving average for the first time since an April 13 breakout above a 383.11 handle buy point. However, strong selling was absent, indicating the support level is still in play.
Qorvo Stock
Qorvo, another Leaderboard stock, is back above its 108.88 buy point in a cup with handle after a strong breakout on June 2. Shares jumped 2.6% and are at the middle of the 5% buy zone that runs up to 114.32.
Morgan Stanley upgraded the chip leader from equal-weight to overweight with a 130 price target.
Top Growth Stocks To Buy And Watch
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple stock moved up 2.65% Tuesday, as it once again approaches its all-time highs.
Shares are well-extended past a handle’s 319.79 buy point, which offered an add-on entry. The entry was an opportunity for investors to add to their positions. Meanwhile, shares are at the 20%-25% profit-taking zone from a cup-with-handle’s 288.35 buy point.
Dow Jones software leader Microsoft is back in the 5% buy zone from a cup-with-handle’s 187.61 buy point amid Tuesday’s 2.5% gain.
The blue-chip giant is an IBD Leaderboard stock idea and an IBD Long-Term Leader.
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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