Dow Jones Futures: Stock Market Rise on Omicron Covid News; Micron, AMD, Tesla, Expedia Lead
Dow Jones futures changed little overnight, along with S&P 500 futures and Nasdaq futures. The tiring stock market rise received a boost from Micron technology (MU), some Covid headlines from President Joe Biden and more. Travel names such as Hilton Worldwide (HLT) and Expedia (EXPE) led.
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The Micron share broke out on strong earnings guidance, and gave a boost to several memory-related companies, with Seagate technology (STX) and KLA Corp. (KLAC) also flashing buy signals.
Tesla shares, Nvidia (NVDA) and Advanced micro devices (AMD) recovered from key levels, but will this bounce stay? The Microsoft stock took back its 50-day line while Google was the parent Alphabet (GOOGL) almost did it as both megacaps work on fresh shallow bases.
The market upturn is still under pressure, which makes new purchases risky.
Nevertheless, the action of travel stocks suggests that investors are currently less afraid of the omicron effect. HLT stock, Hyatt (H), Expedia and without a doubt Marriott (MAR) flashed with early buy signals in the middle of strong high volume upswings. All four stocks broke over 50-day lines
Tesla (TSLA), Microsoft (MSFT), Google, AMD and Nvidia shares are on the IBD Leaderboard. The EXPE share is on SwingTrader. Microsoft and Google stocks are on IBD Long-Term Leaders. Micron was the IBD Stock Of The Day.
The video embedded in this article discussed the market rally and analyzed the MU stock, Hilton and Lam Research (LRCX).
Dow Jones Futures today
Dow Jones futures rose 0.1% relative to fair value. S&P 500 futures were flat and Nasdaq 100 futures fell 0.1%.
Keep in mind that overnight trading in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular trading session.
Join IBD experts as they analyze powerful stocks in the stock market rally on IBD Live
Coronavirus cases
Coronavirus cases worldwide reached 276.56 million. Covid-19 deaths topped 5.38 million.
Coronavirus cases in the United States have reached 52.25 million, with deaths above 830,000.
Covid cases are increasing rapidly in the United States and around the world, reflecting the more contagious omicron variant and more people who are in for the winter in the northern hemisphere. Deaths have remained relatively low due to vaccinations, previous infections and omicron, which apparently has often resulted in milder cases than previous variants. Hospitalizations and deaths may pick up somewhat in a delayed response to an increasing number of cases.
Coronavirus news
President Biden urged Americans to get vaccinated, including booster shots – a day after former President Trump told his supporters he had been given a booster shot. Biden also announced that the United States would send free Covid test kits to any household that wanted it, just two weeks after the White House press secretary mocked the idea. Covid tests at home have been expensive and in short supply, and the FDA has only approved a few tests.
The president will also refer military medical personnel to hospitals to alleviate any staff shortages.
In particular, British Prime Minister Boris Johnson said there was not enough evidence to justify tougher Covid measures, at least before Christmas. In recent days, British officials had warned of hundreds of thousands of daily cases and emphasized that it had not been proven that omicron cases were typically mild compared to other Covid variants.
The FDA is expected to approve Merck (MRK) and Pfizer (PFE) Covid antiviral pills this week. Pfizer antiviral in particular has shown strong success in reducing hospitalizations and deaths.
New York City is offering $ 100 to residents to get a booster shot by December 31st.
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Stock market rally
The stock market rise had a solid upswing. The Dow Jones Industrial Average rose 1.6% in Tuesday’s stock trading, with Nike (NKE) jumps on better earnings than expected. The S&P 500 index rose 1.8 percent. The Nasdaq composition rose 2.4 percent. Small-cap Russell 2000 rose 2.95%.
The 10-year government interest rate rose 7 basis points to 1.49%. The US crude oil price rose 3.7% to 71.12 dollars per barrel, and recovered from Monday’s loss.
AMD and Nvidia shares rose back from their 50-day lines, rising 6.2% and 4.9% respectively. These may be early registrations, but they made even better moves on December 15 that did not last. MSFT and Google stock rose 2.3% and 1.3% respectively. The Tesla stock, which rounded a 38% rally with Monday’s fall before the 900.50 cup buying point, rose 4.3% to 938.53 on Tuesday.
The MU share rose almost 11% to 90.68 after earnings and guidance. Micron blew past a buying point of 89.15 cups with handles, according to MarketSmith analysis. Seagate climbed 3.9% and KLA 6.2%.
ETFs
Among the best ETFs, Innovator IBD 50 ETF (FFTY) rose 3.4%, while Innovator IBD Breakout Opportunities ETF (BOUT) rose 1.4%. iShares Expanded Tech-Software Sector ETF (IGV) rose 2.8%. The Microsoft stock is a large IGV holding. VanEck Vectors Semiconductor ETF (SMH) rose 3.6%. AMD shares and Nvidia are important SMH components.
SPDR S&P Metals & Mining ETF (XME) increased 4% and Global X US Infrastructure Development ETF (PAVE) increased 2.2%. US Global Jets ETF (JETS) rose 5.25%. SPDR S&P Homebuilders ETF (XHB) rose 2.6%. Energy Select SPDR ETF (XLE) climbed 2.85% and Financial Select SPDR ETF (XLF) 2.1%. The Health Care Select Sector SPDR Fund (XLV), which has performed better in recent weeks, rose 0.4%.
ARK Innovation ETF (ARKK) reflected more speculative history stocks, returning 3.8% and ARK Genomics ETF (ARKG) 3.3%. The Tesla share is still number 1 across ARK Invest’s ETFs.
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Market Rally Analysis
The stock market rise got a much-needed bounce again, but is still weak.
Monday’s action pushed the market into “uptrend under pressure.” Nasdaq fell below its lowest levels in early December, ending the composite rally. The market power trend also ended, with Nasdaq’s 21-day line falling below the 50-day line. The S&P 500 index did not fall to its lowest levels in early December, so the rise remains intact.
On Tuesday, the Nasdaq and Dow Jones returned to their 50-day lines, while the S&P 500 regained that level. Russell 2000 is still noticeable below its 50-day and 200-day lines.
Winners easily beat losers on Tuesday, but the up / down line has been sad for several months. New downturns trumped new heights again.
Nasdaq is in the middle of a new rally attempt. The market does not need a Nasdaq follow-up day, because it is officially in a confirmed rally thanks to the S&P 500. But a Nasdaq FTD will definitely be a positive signal.
Travel stocks like Hilton and Expedia leading Tuesday’s price are a positive sign of how the market is reacting to omicron Covid news, although new headlines can certainly change that.
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What to do now
Big one-day gains are common in bad markets. Nasdaq increased by 2.15% on November 15 at the announcement of the Fed meeting, and then gave everything back the next day. Aggressively rushing into stocks after a good day is a recipe for significant losses. See if the stock market rally can build real speed. For now, investors should be extremely careful about adding new exposure.
This is an important time to build your watch lists. Look for stocks with strong relative strengths. Leading truck companies such as JB Hunt (JBHT) dropped their 50-day lines before Tuesday’s bounce, but their RS lines are close to all-time highs. Nvidia shares and AMD may just be a bad day from a big sell signal, but their RS lines look strong. The same goes for Microsoft and Google stocks, which will have new flat bases after this week. RS line for Fortinet (FTNT) is just below peaks when the long-term leader flirts with an early entry with a new base about to form.
All of these groups and stocks may continue to collapse if market heads fall again. Relative winners in bad markets are usually still absolute losers. Therefore, it is generally better to wait for further strength before committing serious capital to the markets.
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