Stock futures traded unevenly lower Friday as investors looked to close out a week of decisive divergence in the market. Earnings news drove IBD Leaderboard listing Adobe higher. Chip and software names showed some strength. On the Dow Jones today, Goldman Sachs faced a critical technical test.
Nasdaq 100 futures traded a fraction lower, after the Nasdaq 100 notched a new record high on Thursday and the Nasdaq Composite leans toward a fifth straight weekly advance.
S&P 500 futures lagged 0.2% below fair value. Dow Jones futures were down 0.4% on the stock market today, after notching two consecutive closes below its 10-week moving average for the first time since February.
Homebuilder Lennar (LEN) also traded high on the S&P 500, up 2.2% as it looks to add to Thursday’s earnings-driven 3.6% gain.
Biogen (BIIB) added 1.3%, after Piper Sandler upgraded the stock to overweight with a price target at 450, about 17% above Thursday’s closing price. Biogen shares spiked 38.6% last week, following federal approval of its Aduhelm Alzheimer’s treatment.
Chip stocks showed strength, as the iShares PHLX Semiconductor ETF (SOXX) gained 0.7% in premarket trade. Adobe helped boost software stocks, and the iShares Expanded Tech-Software Sector ETF (IGV) showed a 08% gain.
Shipping container supplier CAI International (CAI) swept 46% higher, after cinching a deal to be acquired by Mitsubishi HC Capital at 56 a share. The overall deal was valued at $1.1 billion.
Friday is a quadruple witching day: a session when stock index futures, stock index options, stock options, and single stock futures expire. In general, the market and individual stocks see much higher volumes during witching sessions.
Dow Jones Today: Goldman Dives
Cloud-based software leaders Salesforce.com (CRM) led the Dow Jones today, trading just a whisper higher in premarket action. Shares are bucking to add their fifth advance over the past six weeks. The stock is back above support, and moving up the right side of a 32-week consolidation.
Goldman Sachs (GS) plowed more than 1% lower, suggesting the stock would break below support at its 50-day moving average for the first time since November. Goldman stock has been sending clear exit messages, losing ground in eight of nine recent sessions. It broke below support at its 21-day exponential moving average, and erased a 10% gain from an early May breakout.
A break below the 10-week line would send an additional sell signal. A rebound from the line would be a positive, suggesting a level of technical support.
Adobe stock climbed 3.2% in early trade after a 24% gain in second-quarter earnings and a 23% rise in revenue easily topped analyst expectations. Management also hoisted its third-quarter revenue and earnings guidance to above estimates.
The premarket move suggested the stock would open beyond the buy range above a 536.98 buy point in what MarketSmith analysis plots as a 40-week consolidation. The buy range ends at 563.72.
Federal Holiday, But Market Open
Stock and bond markets will operate on normal schedules, after President Joe Biden late Thursday signed into law the official pronouncement of June 19 as a federal holiday. The “Juneteenth” holiday celebrates 1865 delivery of news to African Americans in Texas that they had been freed by Abraham Lincoln’s Emancipation Proclamation two years earlier.
Most federal offices are closed on Friday. That includes the Federal Reserve, although the central bank said its payment services, including fulfillment of orders for currency and coin, will remain open. Most banks remain open, with employees at holiday pay. McClean, Va.-based CapitalOne (COF) closed its corporate offices for the holiday, with bank branches set to be closed in observation on Saturday.
Bond Yields, Oil Prices, Copper, Bitcoin
The 10-year Treasury yield traded around 1.49%, down from its settle just above 1.51% on Thursday and down sharply from Wednesday’s settle near 1.57%. Despite the steep drop, yields are up around 3% for the week, on track to snap a four-week decline — the longest pullback since yields bottomed out in July,
Crude prices continued lower after Thursday’s pullback. West Texas Intermediate futures were down 0.6% early Friday to below $71 a barrel. That was above 3% off Wednesday’s 32-month high. That leaves oil prices about flat for the week, and up note quite 46% since Dec, 31.
Copper prices bounced, following a dive of nearly 5% on Thursday. Futures traded up 0.4% to $4.20 a pound. The metal had touched a record high above $4.76 a pound in mid-May.
Bitcoin sagged about 4% to trade below $38,000, according to CoinDesk. The cryptocurrency had climbed above $40,990 on Tuesday. It reached a high above $64,800 in April. It is up about 30%% year to date.
Dow Jones Today: The Microsoft/Caterpillar Split
Dow stocks did a good job of reflecting the overall market action on Thursday. Microsoft (MSFT) and Apple (AAPL) ended the session at the top of the index. Caterpillar (CAT) and specialty chemicals maker Dow (DOW) closed with losses of more than 3%.
Caterpillar stock had been an index top-performer for the year through early June. It is now down more than 13% for the month, and tracking toward its worst month since May 2019.
Microsoft, on the other hand, is working on its fourth straight weekly advance and moving closer to a 263.29 buy point. The stock ended less than 1% below the entry on Thursday. Shares traded a fraction higher early Friday.
It is an important week for Apple stock, as it works on its third consecutive up week. Shares are climbing off the floor of a seven-week flat base. They decisively retook support at the stock’s 10-week moving average, moving to within 4% of a 137.17 buy point. Apple stock also traded a fraction higher Friday.
Aggressive investors may have used the break above 50-day/10-week support as a buy opportunity. The relative strength ratings for both stocks remain weak: 58 for Apple, 64 for Microsoft. Both relative strength lines have turned up, although Apple’s remains far below highs and within a general downtrend. Microsoft’s is very close to breaking above an April high, which would put it in its strongest position since November.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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