Dow Jones futures rose modestly early Friday, along with S&P 500 futures and Nasdaq futures, while Bitcoin fell back again from a key level. Thursday's hide-and-seek stock market rally that offered several new buying opportunities, including GM stock, General Electric and FedEx (FDX).
XDow Jones giant Salesforce.com (CRM), 360 Digitech (QFIN) and Autodesk (ADSK) headline key earnings overnight.
Hide And Seek Market Rally
Much like Wednesday, the stock market rally had a quietly bullish session Thursday. It's a hide-and-seek rally that's fun to play for keen-eyed investors.
The major indexes and tech giants such as Apple stock helped "hide" actionable stocks.
Apple (AAPL), the most valuable company at $2.09 trillion retreated Thursday, with its relative strength line at a 10-month low. Microsoft (MSFT), Amazon.com (AMZN) and Google parent Alphabet (GOOGL), with market caps above $1.5 trillion, also fell slightly.
Meanwhile, Nvidia (NVDA), ASML (ASML), Applied Materials (AMAT), Adobe (ADBE) and Salesforce stock had modest declines to slim gains.
In many cases, such as Google stock, Nvidia and ASML, the pause was arguably positive. But the upshot for investors is that big- and megacap names masked stronger performance among leading stocks.
Active investors could seek out and find several stocks flashing early entries or breakouts, including General Motors (GM) General Electric (GM) and FedEx stock, as well as TransDigm (TDG), Arcelor Mittal (MT), Albemarle (ALB) and Magna (MGA).
As those names suggest, the auto, aerospace, shipping and steel sectors had strong sessions, along with financials and many recent IPOs.
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Key Earnings
Salesforce earnings topped views. CRM stock rose 5% early Friday, signaling a move back above its 200-day line. Shares of the business software giant fell 1.7% to 225.83 Thursday.
360 Digitech earnings and revenue crushed views yet again. QFIN stock fell modestly overnight. A rare China stock performing well, 360 Digitech rose 3% on Thursday to 29.59, holding above a 28.61 early entry. QFIN stock has a 35.25 buy point.
Autodesk earnings modestly topped views, but the design software maker's outlook was light. ADSK stock rose modestly in extended trade. Shares fell 2% to 286.67 on Thursday. ADSK has a possible trend line entry below 300 as well as resistance just above 300. The traditional buy point is 321.23.
Costco Wholesale (COST), Box (BOX), Dell Technologies (DELL) and Ulta Beauty (ULTA) were other notable earnings. All could offer buying opportunities with strong moves Friday.
Google, Nvidia, Arcelor Mittal, Adobe, Microsoft and ASML stock are on IBD Leaderboard. Mittal, ASML, FedEx and ALB stock are on SwingTrader. ASML, Google, Adobe and Microsoft stock are on IBD Long-Term Leaders. QFIN stock, ASML and Google are on the IBD 50.
Bitcoin Price
The Bitcoin price fell 10% to below $36,000 as the cryptocurrency trades in a recent range.
Bitcoin hit a record $64,829.14 in mid-April, but its slide really took hold from May 9 when it began tumbling from just above $59,000. The cryptocurrency fell to nearly $30,000. Over the past week, Bitcoin has topped $40,000 briefly several times, including Thursday morning, but quickly fell back, generally to the mid-$30,000s.
Dow Jones Futures Today
Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures climbed 0.4%. Nasdaq 100 futures advanced 0.3%. NYSE-listed CRM stock is boosting Dow and S&P 500 futures directly, and may be providing an indirect boost to Nasdaq-listed software names.
The 10-year Treasury yield was flat at 1.61%. On Thursday, the 10-year yield climbed four basis points after reversing slightly higher Wednesday. That followed a sharp four-day slid in the benchmark Treasury yield.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 169.65 million. Covid-19 deaths topped 3.52 million.
Coronavirus cases in the U.S. have hit 33.99 million, with deaths above 607,000.
Stock Market Rally
The stock market rally saw slim morning gains fade somewhat in the afternoon.
Jobless claims fell significantly to yet another pandemic low. Republicans touted a new $928 billion infrastructure plan, closing the gap with President Biden's recently revised $1.7 trillion proposal.
The Dow Jones Industrial Average rose 0.4% in Thursday's stock market trading. The S&P 500 index edged up 0.1% The Nasdaq composite closed just below break-even. The Russell 2000 popped 1% after Wednesday's 1.9% gain.
The big-cap Nasdaq 100 lagged the Nasdaq composite for second straight day, slipping 0.4% as tech giants generally retreated. Apple stock fell 1.2%, retreating from its 50-day line once again. Microsoft stock dipped 0.9%. Google stock also edged down 0.9%, but it's still in buy range from its 10-week line. Amazon stock slid 1.1%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.6%, while the Innovator IBD Breakout Opportunities ETF (BOUT) advanced 1.9%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.7% as Workday (WDAY) and Okta (OKTA) results helped chill software names ahead of Salesforce earnings. Microsoft, Adobe and CRM stock are key IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) gained 0.5%, with ASML and Nvidia stock notable components..
SPDR S&P Metals & Mining ETF (XME) leapt 3.75% and Global X U.S. Infrastructure Development ETF (PAVE) gained 1.1%. U.S. Global Jets ETF (JETS) advanced 1.1%. SPDR S&P Homebuilders ETF (XHB) edged up 0.7%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 0.8 and ARK Genomics ETF (ARKG) 0.6%. Both are still below their 50-day and 200-day moving averages, but are slowing moving back to that level. Tesla (TSLA) is the top overall holding for ARK Invest's ETFs.
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Auto Sector
General Motors will reopen several plants as its chip shortages ease, fueling big gains for GM stock and the broader auto sector.
GM stock popped 2.9% to 59.77, clearing a short downward-sloping trend line and rebounding from its 10-week line, offering an early entry. GM stock has a 63.54 official buy point.
Magna, a key GM supplier and possible Apple Car partner, popped 4% to 100.02, clearing a short consolidation that wasn't quite long enough to be a short base. The official buy point is 99.82, also actionable from a short trend line and 10-week line. The relative strength line for MGA stock is just below a record high.
MGA stock was IBD Stock Of The Day.
Meanwhile, Ford Motor (F) leapt 7.3%, now significantly extended. Stellantis (STLA) and Daimler (DDAIF) extended breakouts. Tesla stock climbed 1.9%.
Aerospace
In the aerospace field, TransDigm stock jumped 4.6% to 649.50 clearing a 633.14 flat-base buy point in heavy volume, according to MarketSmith analysis. TDG stock cratered during the coronavirus crash, but roared back. After consolidating for several months it's now eyeing its pre-pandemic record highs.
GE stock rallied 7.1% to 14.35, closing in on a 14.51 consolidation buy point. But it's already tripped several early buy signals, breaking a trend line, rebounding from the 10-week and topping a short-term high of 14. GE is still an industrial conglomerate, but aerospace is a key segment, making jet engines for Boeing (BA) and Airbus (EADSY). Reports that President Biden will propose a $6 trillion federal budget for fiscal 2022 also could be a tailwind for various GE businesses.
Airbus (EADSY) and Boeing helped fuel the aerospace rally as the former announced a big production increase while Boeing customer Southwest Airlines (LUV) said it could need 500 new jets.
Airbus stock spiked nearly 9%, gapping out of a consolidation.
Boeing stock rebounded from its 50-day line, rising 3.9%. Key supplier Spirit AeroSystems (SPR) leapt 6.2%, extending a move above its 50-day line and a trend line.
But TransDigm and GE are closer to their pre-pandemic profitability, while Boeing and Spirit AeroSystems won't achieve that until after 2022. Meanwhile, the volume was much stronger on the TransDigm and GE stock moves Thursday.
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Shipping
FedEx stock rose 1.6% to 315.59, clearing a shelf pattern above a recent breakout.
Metals And Mining
After several days of declines, mining and metals stocks bounced back.
MT stock gained 4.35%, rebounding from its 10-week line, offering an entry point. ALB stock, a lithium play, climbed 3.9% to 168.56, breaking above a trend line.
Olympic Steel (ZEUS), a relatively thin stock, leapt 8.8% to 36.59, clearing an ascending base buy point of 36.88. Uranium miner Cameco (CCJ) jumped 4.6% to 20.57, retaking a 19.81 buy point.
Market Rally Analysis
The stock market rally closed narrowly mixed, from the perspective of the major indexes. The Dow Jones and S&P 500 are inching toward all-time highs. The Nasdaq was essentially flat. Ideally, the Nasdaq will move toward record highs, getting a little more distance from its 50-day line. But Thursday's action was fine.
Meanwhile, the Russell 2000 was a welcome sight, extending its move back above the 50-day with a strong gain.
Sector strength was robust as well. In addition to autos, aerospace, shipping and metals/mining, financials also had a solid day. Leading IPOs, notably Roblox (RBLX) and Upstart (UPST), powered higher.
From the perspective of leading stocks, Thursday was a strong market rally. Even leaders that were down, such as ASML and Google stock, generally showed fractional losses and healthy technical action.
What To Do Now
Leading stocks continue to give reasons to gradually add exposure across a variety of sectors. The still-choppy market rally and ongoing sector rotation underscore the value of having diversity among your leaders. If you want to focus on growth stocks, keep your exposure relatively modest.
The market rally has been trending higher again for just over a week. Hopefully that will continue, but investors should be ready for stocks to move sideways or lower once again. Pay close attention to the market action and have an exit strategy for all your holdings.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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