Dow Jones futures were little changed Thursday morning, along with S&P 500 futures and Nasdaq futures, erasing overnight losses on election interference claims. The stock market rally retreated modestly Wednesday, near session lows, as stimulus deal talks pushed the Dow Jones and other major indexes up and down.
National security officials said Wednesday evening that Russia and Iran have obtained voter contact information with the apparent goal of meddling with U.S. elections. Much of that info may be readily available.
"Iran and Russia have taken specific actions to influence public opinion related to our elections," said Director of National Intelligence John Ratcliffe at an abruptly announced press conference.
Ratcliffe said Iranians sent a series of threatening emails to Democratic voters made to look they were coming from the far-right Proud Boys.
President Donald Trump and Democratic nominee Joe Biden have their final debate tonight.
Tesla, Other Key Earnings Movers
Tesla (TSLA), Chipotle stock, Align Technology, CSX, EW and LRCX all were near buy points heading into earnings last night.
Tesla rose overnight on stronger-than-expected earnings, though it is not yet signaling a breakout.
But Align stock soared on blowout results, pointing to an earnings gap.
CSX rose on strong earnings and a stepped-up buyback, signaling a possible breakout.
On the downside, Chipotle fell amid rising delivery costs. EW and LRCX stock retreated despite beating views.
Market Rally Lacks Stimulus
In Wednesday's stock market action, the stock market rally opened with a solid advance, but then the major indexes moved between modest gains and losses as investors awaited more-definitive news on a stimulus deal. Both House Speaker Nancy Pelosi and White House officials voiced optimism about a stimulus deal, but some outstanding issues remain. More talks are set for Thursday, but a stimulus deal might not happen until after the Nov. 3 election.
The major indexes closed in the red, near the day's worst levels. Worse, many leading stocks were roughed up.
More broadly, cloud software, solar stocks, U.S. e-commerce plays and homebuilders suffered significant losses.
As for tech giants, Apple stock, Amazon.com (AMZN), Advanced Micro Devices (AMD) and Shopify (SHOP) fell slightly, while Microsoft (MSFT), Adobe (ADBE) and Tesla eked out slim gains. All are near the lows of their new handles, with the handle for Apple (AAPL) and now AMD stock slightly below the midpoint of their bases.
Tesla stock, PayPal and Chipotle are on IBD Leaderboard. PayPal stock also is on SwingTrader and the IBD Long-Term Leaders list. Microsoft and Adobe stock also are Long-Term Leaders. AMD, Adobe, Amazon, Microsoft and LRCX stock are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value after turning lower Wednesday evening on the election interference news. S&P 500 futures sank 0.1%. Nasdaq 100 futures rose a fraction, with Tesla and Align boosting that big-cap index. Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Coronavirus cases worldwide reached 41.50 million. Covid-19 deaths topped 1.13 million.
Coronavirus cases in the U.S. have hit 8.58 million, with deaths above 227,000.
Stock Market Rally Wednesday
Last Update: 4:06 PM ET 10/21/2020
The stock market rally had a somewhat disappointing session.
The Dow Jones Industrial Average sank 0.35% in Wednesday's stock market trading. The S&P 500 index retreated 0.2%. The Nasdaq composite lost 0.3%.
Apple dipped 0.5% and Amazon stock fell 1%. Shopify stock and AMD lost about 3%. Microsoft and Adobe stock were just barely higher.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) retreated 1.1%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.2%, with Microsoft and Adobe key holdings. The VanEck Vectors Semiconductor ETF (SMH) lost 0.6%, with LRCX stock and AMD among the major components.
Tesla earnings spiked 105% to 76 cents a share. Analysts expected Tesla earnings of 55 cents on revenue of $8.29 billion. Higher-than-expected revenue from regulatory credits helped drive the Tesla earnings beat.
In the Q2 earnings call, Tesla said regulatory credits in the second half would likely match Q2's total. But Q3's credits came in at $395 million, not far from Q2's $428 million.
Tesla reiterated its target for 500,000 deliveries for the full year, which will require a big jump from Q3's record 139,300.
The electric car giant also reiterated that it expects its Berlin and Austin plants to be finished in 2021. CEO Elon Musk said the Berlin production rollout will be slow.
The Austin plant, when it begins production, may start with the Model Y. Musk suggested that the Cybertruck may not come out until the end of 2021, if then, and likely not in volume, citing "challenges."
"If all goes well, we'll be able to do some Cybertruck by the end of next year, he said on the Tesla earnings call. "It's very difficult to predict."
Several electric pickups will be on the market in the U.S. before the Tesla Cybertruck.
Tesla stock rose nearly 5% early Thursday. History suggests some big moves in Thursday's trade.
After the last two Tesla earnings reports, shares moved higher but then reversed lower. In the two earnings reports before that, Tesla stock had a double-digit percentage gain the next day.
Shares edged up 0.2% to 422.64 on Wednesday, completing a handle on a daily chart, giving TSLA stock a 466 buy point.
Stock Market Analysis
The stock market rally remains in a waiting period. The major indexes have formed handles, with many leading stocks from Apple to Shopify to Tesla doing the same, forging lower buy points. If the market rally ramps up and breaks past this short-term resistance — presumably with several techs breaking out — that would be a strong positive signal.
But right now, the indexes and many stocks are languishing near the bottom of handles, testing key support levels. Some growth stocks have made progress, but most have trended lower over the past week.
A continued slide from current levels would soon raise at least yellow flags.
After bulking up exposure in early October, investors can largely hold those positions, paring those that aren't working and taking into account looming earnings reports. But this is not a great time to be significantly adding to exposure. Sure, there are some breakouts, mostly news-driven, like PayPal stock Wednesday. But those are the exception right now.
Along with stimulus deal hopes and fears, the presidential election is less than two weeks away with key late-stage coronavirus vaccine data likely before the end of October. And, of course, earnings season is heating up.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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