Dow Jones futures and S&P 500 futures rose Thursday night while Nasdaq futures jumped on strong earnings from Apple (AAPL) and FANG stocks Amazon.com (AMZN), Facebook (FB) and Google parent Alphabet (GOOGL) after a mixed but bullish session for the coronavirus stock market rally.
The stock market rally had a mixed Thursday but closed near session highs. The major indexes rebounded from intraday lows with the Nasdaq moving higher. Even better, leading stocks outperformed, with several breaking out or clearing other buy points.
In overnight trading, Apple stock, Amazon stock and Facebook stock rose solidly after big earnings beats, with Facebook and Amazon both nearly doubling earnings. Google stock climbed slightly after hours despite beating headline views. These four stocks have a combined valuation of nearly $5 trillion, so the coronavirus market rally may take its cue from their action at Friday’s open.
AAPL stock, AMZN stock and FB stock arguably could be actionable Friday morning.
Vertex stock edged higher after strong earnings and guidance. Atlassian stock fell as the collaboration software maker guided lower for current-quarter earnings.
Dow Jones Futures Today
Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures climbed 0.8%. Nasdaq 100 futures spiked 2%, boosted by AAPL stock and the internet giant trio.
The official China manufacturing index rose 0.2 point in July to 51.1, signaling slightly faster growth and beating views for 50.8.
Remember that overnight action in Dow futures, AMZN stock and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. DJIA futures predicted Thursday’s weak open but not the market bounce.
Coronavirus cases worldwide are at 17.45 million. Covid-19 deaths have topped 675,000.
Coronavirus cases in the U.S. have reached 4.63 million, with deaths at 155,000. New Covid-19 cases appear to have peaked in the U.S., with Sunbelt hot spots coming off highs. But coronavirus deaths, which lag new infections, are still elevated.
Coronavirus Stock Market Rally Action Thursday
U.S. Stock Market Today Overview
Last Update: 4:04 PM ET 7/30/2020
The coronavirus stock market rally opened with the major indexes falling significantly in the first hour of trading, but then showing notable improvement.
After opening solidly lower amid weak economic data, the major indexes rebounded somewhat, especially the Nasdaq. The Dow Jones Industrial Average fell 0.85% in Thursday’s stock market trading. But the Dow closed above its 200-day after rebounding from its 50-day line. The S&P 500 index slid 0.4% but bounced off its 21-day moving average. The Nasdaq composite rose 0.4% after finding support at its 21-day line again.
Energy, gold and bank stocks struggled as crude oil futures, gold prices and Treasury yields fell. That weighed on the DJIA and S&P 500.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.55%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.15%. ServiceNow (NOW) stock fell after earnings, but many cloud software leaders had big gains, including Cloudflare (NET) and Teladoc (TDOC). The VanEck Vectors Semiconductor ETF (SMH) popped 0.9% as Qualcomm (QCOM) and Qorvo (QRVO) broke out on earnings, with solid gains for AMD (AMD) and Skyworks (SWKS).
Apple earnings rose 18% to $2.58 with revenue up 11% to $59.69 billion. Wall Street forecast Apple earnings of $2.04 a share on revenue of $52.25 billion. Apple iPhone revenue of $26.24 billion was well above estimates.
The tech titan said this fall’s iPhone launch will likely come “a few weeks later” than usual, but didn’t signal a major delay.
The consumer electronics giant also announced a 4-for-1 stock split. AAPL stock is a member of the Dow Jones, which is price-weighted.
Apple stock popped 6.4% overnight, signaling a record high. AAPL stock climbed 1.2% to 384.76 on Thursday, moving up from its 21-day line after rebounding from its 10-week line last week.
The relative strength line for Apple stock has fallen slightly over the past two weeks, but that’s after a long uptrend before and during the coronavirus market rally. The RS line, the blue line in the charts provided, reflects a stock’s performance vs. the S&P 500 index.
Amazon earnings leapt 97% to $10.30 a share. Revenue grew 40% to $88.91 billion. Analysts expected Amazon earnings of $1.48 a share on revenue of $81.4 billion.
E-commerce and cloud-computing demand is booming during the coronavirus crisis, offsetting heavy Covid-19 expenses. Amazon Web Services revenue rose 29% to $10.81 billion, slightly below views. While AWS is still the industry leader, Microsoft and Google are delivering faster cloud-computing growth.
For the third quarter, Amazon sees revenue of $87 billion to $93 billion, above forecasts.
Amazon stock rallied 5% overnight. AMZN stock edged up 0.6% to 3,051.88 Thursday, continuing to consolidate at its 21-day line after a strong run.
Facebook earnings surged 98% to $1.80 a share, helped somewhat by easier comparisons. Revenue climbed 11% to $18.69 billion. Analysts forecast Facebook earnings of $1.44 with revenue of $17.29 billion.
Monthly active users reached 2.7 billion, topping estimates.
Despite a highly publicized ad boycott, Facebook sees 10% ad revenue growth in Q3, about the same as in Q2.
Facebook stock leapt 6.5% in extended trade, signaling a test of its all-time high. FB stock eked out a 0.5% gain at 234.50 on Thursday, just reclaiming its 50-day line.
The RS line has been trending lower over the past two months.
Google earnings fell 29% to $10.13 a share as revenue dipped 2% to $38.297 billion. Analysts expected Google earnings of $8.22 a share on revenue of $37.34 billion. YouTube advertising revenue missed views, but cloud computing revenue jumped 43%.
Parent Alphabet’s board also OK’d a new $28 billion buyback of Google stock.
Google stock rose a fraction overnight. GOOGL stock rose 1% to 1,538.37 on Thursday, holding support at its 21-day line, not far from record highs.
Vertex earnings surged 107% to $2.61 a share with revenue up 62% to $1.52 billion. Analysts expected Vertex earnings of $2.09 per share on $1.39 billion in sales.
The biotech also raised guidance.
Vertex stock rose a fraction in extended trade. VRTX stock closed up 0.2% to 279.40. The RS line for Vertex stock has trended lower since mid-May and especially late June.
Atlassian earnings rose 25% to 25 cents a share in fiscal Q4. Revenue climbed 29% to $430.5 million. Analysts expected Atlassian earnings of 21 cents a share on revenue of $410.7 million.
Customer growth fell sharply vs. a year earlier, For the current September quarter, Atlassian guided EPS slightly lower.
Atlassian stock tumbled 7% overnight, signaling a sharp drop below its 50-day moving average. TEAM stock edged up 0.3% to 187.66 on Thursday.
Walk-Run Stock Market Rally
The coronavirus stock market rally is showing great action. The major averages are moving sideways after a steep ascent for several months. That is healthy and normal.
At its then-record July 13 peak, the Nasdaq composite was hitting or topping short-term and long-term channel lines. At its intraday peak that day, the Nasdaq was 12.3% above its 50-day moving average. Now it’s just 5.4% above that level. Of course, with megacaps Apple, Amazon, Facebook and Google rallying overnight, the Nasdaq could widen its lead over the 50-day Friday.
Meanwhile, leading stocks are making strong moves. Some of that is due to earnings, but there’s no doubt that growth names are outperforming.
With the Nasdaq walking the major indexes higher and leading stocks running, it’s a great environment for growth investors.
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