Mixed action among stock futures covered a fair amount of ground on Thursday, as markets awaited weekly unemployment and June PMI data, and looked toward an oil production decision from OPEC. Tesla gained as EV makers began turning in June delivery stats. Walgreens provided the early updraft on the Dow Jones today, after a strong fiscal Q3 report.
Dow Jones futures chiseled out a 0.3% advance, while S&P 500 futures traded 0.2% above fair value. Nasdaq 100 futures shed early losses and edged into positive territory, with Micron Technology (MU), ASML Holding (ASML) and Applied Materials (AMAT) trading at the bottom of the list.
Walgreens Boots Alliance (WBA) led the S&P 500 and the Nasdaq 100. Oil stocks commanded seven of the 10 top early gains on the S&P 500 as oil prices scaled to a new 32-month high while OPEC and its partners prepared to meet. The Energy Select Sector SPDR Fund (XLE) ran up 1.7% in premarket trade.
Chemicals maker Celanese (CE) also traded high on the S&P 500, up 1.6% after agreeing to pay $1.15 billion to purchase Exxon Mobil‘s (XOM) unit that makes a rubberlike material brand-named Santoprene.
Among Thursday’s stocks to watch, Acuity Brands (AYI) gained 0.5% after reporting above-forecast fiscal third-quarter results. The stock ended Wednesday 2% below a 190.81 buy point in a cup-with-handle base.
Granite Construction (GVA) has pulled back for a quick test of support below a flat base buy point at 42.52. SLM (SLM), the mortgage originator formerly known as Sallie Mae, rose 1%. It is low in a buy range after clearing a 20.92 flat base buy point on Wednesday.
Dow Jones Today: Walgreens, Apple
Walgreens blasted 2.9% higher to lead the Dow Jones today. An 82% earnings surge and a 12 rise in revenue blew past analyst expectations. Management lifted its full-year earnings outlook to well above consensus expectations.
Walgreen stock has been the Dow’s third best performer for the year through Wednesday, up nearly 32% and hot on the heels of American Express (AXP) and Goldman Sachs (GS). Walgreens stock carries a weak Composite Rating of 50. It finished Wednesday about 9% below a 57.15 buy point in what IBD MarketSmith analysis charts as a 13-week flat base.
Apple (AAPL) remains on breakout watch, after peeking briefly above a 137.17 buy point on Wednesday. Trading volume is the key to watch here, with the stock rising in very weak trade in recent sessions. Breakouts typically require volume rising at least 40% above its 50-day average. Volume can sometimes even kick in several days after a stock passes a buy point, giving a late confirmation to the breakout.
In Motion: Tesla, Moderna, Smith & Wesson
Tesla (TSLA) topped the IBD Leaderboard lineup early Thursday with a 0.5% gain. Investors are waiting on the EV makers June delivery and production report, expected within the next day or so. China-based EV makers Nio (NIO) and Xpeng (XPEV) reported June numbers early Thursday.
Tesla retook its 50-day moving average and broke above a downward sloping trend line last week. That provided a potential entry for aggressive investors.
Vaccine maker Moderna (MRNA) added 0.7% in early trade. The IBD 50 stock is looking to add a fourth straight advance, clocking a 6.8% advance for the week through Wednesday.
Also on the IBD 50 list, firearms maker Smith & Wesson (SWBI) jumped 2.5% in premarket action. The stock ended Wednesday up almost 54% since clearing a cup-with-handle base buy point at 22.60 on June 18.
Jobs Data, Manufacturing PMIs
The ramp up to Friday’s June payrolls report continues, with the release of weekly unemployment data from the Labor Department at 8:30 a.m. ET. On Wednesday, the first data point in the June jobs picture — the ADP National Employment report — showed employers adding 692,000 workers during the month. That was down sharply from hiring in May, but still well above the 550,000 hirings projected by economists.
Research Markit delivers its June manufacturing purchasing managers index at 9:45 a.m.ET. The Institute For Supply Management’s Manufacturing PMI is due out at 10 a.m. ET, alongside May construction spending numbers from the Commerce Department.
Vital Signs: Oil, Bitcoin, Bond Yields
Oil prices are front and center on Thursday’s radar, with the Organization of Petroleum Exporting Countries and partners led by Russia set to meet to discuss production strategy. U.S. benchmark West Texas Intermediate traded up almost 2% early, above $74.80 a barrel.
Bitcoin continued lower, down 4% to below $33,700, according to CoinDesk. The 10-year Treasury bond yield regained some ground, trading at 1.47%, after taking a 2.5% dive to settle just above 1.44% on Wednesday.
Nasdaq, S&P 500 and Dow Jones Today
The S&P 500 is centerstage Thursday as it looks to extend its rally to a sixth day and hold its record-high levels above 4,300. The benchmark has gained in seven of the past eight sessions, rising more than 3% from a mid-June low.
Wednesday’s session marked the end of the second quarter. It also marked the S&P 500’s largest five-quarter percentage gain since the second quarter of 1936, according to Dow Jones data. It’s the index’s longest winning streak since the fourth quarter of 2017.
The S&P 500 and the Dow Jones today have now advanced in 20 of the past 23 quarters. The Nasdaq has gained in 17 of the past 23 quarters.
More importantly for growth stock investors, June was a turnabout month, with growth stocks regaining their mojo. Wednesday’s Big Picture article pointed out that the iShares Russell 1000 Growth ETF (IWF) rose 6% for the month and 11.7% in Q2. The Nasdaq gained 5.5% in June and 9.5% for the quarter.
That helped investors rotating back into stocks after the market status returned to Confirmed Uptrend on June 22 make more progress. Whether that progress continues hinges on a complex list of variables, including commodities prices, interest rates, federal stimulus action and Covid-19 variants.
But the market’s June performance, and its “confirmed uptrend” status, give investors the green light to continue a cautious return to leading stocks breaking out past buy points. Continue to be wary for stock price breakdowns. Keep sell rules close at hand, and limit losses by judiciously adhering to the automatic sell rule.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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