Dow Jones Futures: Bitcoin Play PayPal In Buy Zone As Tesla, Nio, Xpeng Fly; Apple Stock Breaks Support
Dow Jones futures rose Monday night, along with S&P 500 futures and Nasdaq futures, as President Donald Trump agreed to cooperate in the transition to Joe Biden.
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The stock market rally rose modestly Monday, amid fresh coronavirus vaccine news. Tesla stock, Nio (NIO), Xpeng Motors (XPEV), Li Auto (LI) and many other EV plays raced higher.
PayPal (PYPL) flashed early buy signals, as the digital payments stock has become the latest Bitcoin play — and player. CrowdStrike (CRWD), Twilio (TWLO) and Novocure (NVCR), which flashed similar buy signals late last week, continued to rally Monday after testing additional buy points.
Finally, Apple stock had a bad session, falling through its 50-day line, continuing to lose ground vs. the overall stock market rally. Apple (AAPL), which boasts a $1.936 trillion market cap, is a member of the Dow Jones, S&P 500 index and Nasdaq composite.
Early Tuesday, Best Buy (BBY), Anaplan (PLAN), Analog Devices (ADI), Dick’s Sporting Goods (DKS) and Burlington Stores (BURL) report earnings.
Tesla (TSLA), PayPal and Novocure stock are on IBD Leaderboard. Novocure, Tesla and CrowdStrike stock are on SwingTrader. PayPal stock is on IBD Long-Term Leaders.
Trump Cooperates With Biden Transition
The General Services Administration Monday night acknowledged that Joe Biden is the apparent winner of the 2020 presidential election. That step triggers a formal presidential transition. Biden and his aides will have access to agency officials, briefings and more, a well as some $6 million in funds.
President Trump said on Twitter that he believes that he’ll “prevail” in legal challenges to the 2020 election, but gave his blessing to GSA chief Emily Murphy to move ahead with the delayed transition.
“In the best interest of our Country, I am recommending that Emily and her team do what needs to be done with regard to initial protocols, and have told my team to do the same.”
The moves came as several GOP senators called for the presidential transition to begin. It also came after Michigan certified its election results, a key blow to Trump’s thin hopes of overturning the election outcome.
With a formal transition and Trump administration cooperation, President-elect Biden can hit the ground running after his term begins on Jan. 20. That includes continuing the likely rollout of coronavirus vaccines.
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Dow Jones Futures Today
Dow Jones futures were 0.85% above fair value. S&P 500 futures climbed 0.75%. Nasdaq 100 futures rose 0.5%.
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 59.51 million since the pandemic’s start. Covid-19 deaths topped 1.4 million.
Coronavirus cases in the U.S. have hit 12.77 million, with deaths above 263,000.
Early Monday, AstraZeneca (AZN) reported that its coronavirus vaccine was 62% or 90% effective, depending on the dosage. The AstraZeneca Covid vaccine, developed with Oxford, is far cheaper that the Pfizer (PFE) or Moderna (MRNA) vaccines, but those are roughly 95% effective.
In any cases, there is a strong chance that the Pfizer coronavirus vaccine will win FDA approval by mid-December, with the Moderna and AstraZeneca vaccines perhaps getting authorization before year-end.
Stock Of The Day Offers Multiple Entries As Pot Sector Shapes Up
Stock Market Rally Monday
The stock market rally had a broad but uneven rally, weighted toward real economy plays. President-elect Joe Biden named former Federal Reserve chief Janet Yellen to be his Treasury Secretary. That news appeared to push stocks higher as well.
The Dow Jones Industrial Average rose 1.1% in Monday’s stock market trading, as Boeing (BA), Chevron (CVX), Disney (DIS), JPMorgan Chase (JPM) and more offset weakness in Apple stock. The S&P 500 index climbed 0.6%. The Nasdaq composite edged up 0.2%. All the major indexes are near record highs. The small-cap Russell 2000 stepped up with a 1.85% gain to an all-time level.
The Russell 2000 and Dow Jones led as real economy sectors such as airlines, financials, energy and industrials rallied on the coronavirus vaccine news. Some pure-play stay-at-home stocks such as Zoom Video (ZM) retreated, while software was mixed.
But growth stocks overall did well.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.1%. The VanEck Vectors Semiconductor ETF (SMH) rose 1.5%, hitting a new high.
Tesla Stock, Nio, EV Sector On Fire
Tesla stock shot up 6.5% to 521.49, hitting a record high Monday after soaring 20% last week on news that it’ll join the S&P 500 index on Dec. 21. Shares are far extended from a 466 buy point.
Wedbush analyst Dan Ives raised his TSLA price target to $650 with a $1,000 bull case target. The Tesla price target hike largely came from Ives’ forecast for a booming electric-car market in 2021.
Nio Stock, EV Sector
The broader EV stock sector had a huge day.
Nio stock jumped more than 12% to a record high. Xpeng stock skyrocketed 34% and Li Auto 14.5%. Xpeng and Li Auto stock, both 2020 IPOs, hit record highs.
Electric-van startup Workhorse Group (WKHS) vaulted 12%. Electric-truck startup Lordstown Motors (RIDE), with Workhorse and General Motors (GM) as investors, leapt 8%. EV charging station maker Blink Charging (BLNK) spiked 48%, or 333% so far this month.
The electric-car market is expected to expand in 2021, though largely due to government policies pressuring traditional automakers to expand their EV offerings. EV supply is rapidly coming on line, especially in Europe, but will EV demand follow suit? The coming years could be a boom market for EV sales, but with cutthroat competition.
But, for now, electric-car stocks are racing at breakneck speed. Even if you think they should stop, or go into reverse, you don’t want to step in front of them.
Tesla, Nio and several EV stocks extended gains overnight.
PayPal Stock
PayPal stock rose 4.2% to 200.82, rebounding from its 50-day line and breaking a downward-sloping trend line. Both are buy signals. PYPL stock has another early entry at 205.02. At the end of this week, PayPal stock is likely to have a new base with an official buy point of 215.93.
Note that the relative strength line for PYPL stock has fallen significantly since its Oct. 21 peak, though that follows a long run. The RS line, the blue line in the charts provided, tracks a stock’s performance vs. the S&P 500 index.
PayPal is rallying as the digital payments leader has moved into Bitcoin transactions. Bitcoin prices have been soaring in the past several weeks. PayPal reportedly is accounting for a huge share of Bitcoin buys in the past few weeks, after rival Square (SQ) had dominated the cryptocurrency’s purchases.
Meanwhile, CrowdStrike rose 1.25%, Twilio stock 1.5% and Novocure 1.55%. Those all followed big gains last week, surging from 50-day/10-week lines and breaking downtrends. They also moved above a further resistance point, offering yet another buy point. On Monday, all three stocks initially fell, but all found support at that latest buy point in a bullish rebound.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Apple Stock
Apple stock fell 3% to 113.83, falling through its 50-day line and closing near session lows. The RS line has fallen since Sept. 1 to its lowest level since the end of July. After a strong run after the coronavirus crash, Apple stock may need to some time off.
The weakness in Apple stock and another megacap techs is masking the underlying strength in growth stocks. But it’s still unclear which sectors will lead the next leg of the stock market rally.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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