Stock futures strengthened from mixed trade to slender gains Friday, ahead of a key jobs report, as the market moved to defend its gains for the week. Home Depot (HD) weighed on the Dow Jones today, trading lower after an analyst downgrade.
Dow Jones futures scratched out a 0.1% gain, while S&P 500 futures traded a fraction above fair value. Nasdaq 100 futures also traded fractionally higher on the stock market today. Small caps ran narrowly ahead of the overall action, with Russell 2000 futures rising 0.3%.
Vaccine-maker Moderna (MRNA) led the Nasdaq 100 with a 1% gain, as it aims to stem a steep two-week slide. Baidu (BIDU) and Facebook (FB) were also near the top of the list. FastenalFAST and NetEase (NTES) took the Nasdaq 100’s heaviest early losses, each down more than 1%.
Quidel (QDEL) kicked up more than 6% to lead the S&P 500. Chief Executive Douglas Bryant said late yesterday the company had produced and shipped the largest number of in the company’s history during the third quarter, and it is on track this year to meet its target capacity of 70 million rapid antigen tests per month.
Oil stocks were five the S&P 500’s 10 largest gains in early trade. Heavy truck maker OshKosh (OSK) fell 4%, to the bottom of the index, after warning that component shortages would affect its fourth-quarter results.
Dow Jones Today: Home Depot Downgraded
Chevron (CVX) rose 0.7%, Goldman Sachs (GS) added 0.3% at the top of the Dow Jones today. Home Depot dragged on the early action, down 0.7% after Loop Capital downgraded the stock to hold, from buy. The note also cut the brokerage’s price target on Home Depot stock to 325, from 370.
Economic News: Debt Hike, Payrolls
The Senate voted Thursday night to raise the debt limit into December, with Democrats agreeing to Senate Minority Leader Mitch McConnell’s offer for a short-term debt hike. To head off a government default, the House must approve the measure before President Joe Biden signs it.
The Labor Department releases its September payrolls report at 8:30 a.m. ET. Economists project a sharp pick-up from August, targeting 475,000 new jobs.
China’s markets closed out the week on a positive note. Hong Kong’s Hang Seng Index gained 0.6% leaving the week 1.1% higher after Tuesday’s drop to a 12-month low. The Shanghai Composite rallied 0.7%, to end its holiday-shortened week with a 0.7% advance.
In Japan, Tokyo’s Nikkei 225 jumped 1.3%, riding a boost from the U.S. debt-ceiling agreement.
Europe’s markets were mixed near midday, with the CAC-40 in Paris down 0.4% and Frankfurt’s DAX off 0.2%. The FTSE 100 in London clung to a 0.1% advance.
Vital Signs: Oil, Bond Yields, Bitcoin
Oil prices reversed early losses and gained more than 1% on Thursday, with West Texas Intermediate crude settling above $78 a barrel. WTI futures gained 0.9% early Thursday, approaching Wednesday’s 7-year high.
Bond yields were steady ahead of the jobs report, with the 10-year yield up one basis point to 1.58%.
Bitcoin gained almost 3%, trading above $55,400. The cryptocurrency is up nearly 17% for the week, and has swung as high as $56,078 and as low as $53,436 over the last 24-hours, according to CoinDesk.
IBD 50 Stocks: Callon’s Buy Point, Stifel’s Buy Range
On the IBD 50 list, Callon Petroleum (CPE) jumped 1.4%, aiming to extend its four-week rally. Shares have carved a 58% deep cup base with a buy point at 60.59. The stock closed about 7% below that entry on Thursday.
The stock market status remains ‘market in correction,’ which counsels investors to hold off on any new purchases until a follow-through day confirms a new uptrend. For now, build watchlists of stocks near valid buy points, in order to be ready with actionable targets when the market does make its move.
Nasdaq, S&P 500, Dow Jones Today
The Dow Jones today looks to close out what has been a strong rebound week, with the index running 1.3% higher through Thursday.
The advance powered past short-term levels of support, but petered out at the underside of the Dow’s 50-day moving average. It is the Dow’s third failure since September to retake that level of support, marking a clear line of resistance.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The S&P 500 has a 1% gain through Thursday, also retaking short-term support and retreating after not quite reaching its 50-day line. The Nasdaq Composite has a 0.6% so far for the week. In terms of short-term support, it has regained its 10-day, but remains below its 21-day level. It closed Thursday 1.5% below its 50-day line.
Those charts clearly support a “market in correction” status. The market’s attempt to launch a new uptrend remains active, with the Nasdaq and S&P 500 holding firmly above lows charted out on Monday. A follow through day could occur now at any point and confirm a new uptrend. But, for now, the market has provided no clear signals as to whether it is due for more consolidation or a shift into a new uptrend.
Please follow Alan R. Elliott on Twitter @IBD_Aelliott
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