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Business

Dow Jones Futures: Stock Market Rally Holds Gains As Square, Sea, Chipotle Flash Buy Signals; Tesla Faces Key Test

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Dow Jones futures rose slightly Tuesday night, along with S&P 500 futures and Nasdaq futures. The stock market rally took a breather Tuesday, edging lower after strong gains over the past few sessions.




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Royal Caribbean (RCL), Carnival (CCL) and Norwegian Cruise Line (NCLH) rallied late on a Bloomberg report that the Centers for Disease Control and Prevention recommended that cruises could resume this summer with certain restrictions. That followed reports indicating that cruise line operators wouldn’t have to require vaccinations for travelers.

Carnival, NCLH and RCL stock rose 2%-3% overnight, adding to gains Tuesday and over the past several sessions. All three stocks are approaching possible buy points.

Carnival earnings are due Wednesday morning.

Breakouts Hold, New Buy Signals

Microsoft (MSFT), Facebook (FB) and Google parent Alphabet (GOOGL) continued to hold in buy range Tuesday after Monday’s breakouts.

Micron Technology (MU), Square (SQ), Sea Limited (SE), Chipotle Mexican Grill (CMG) and Yeti Holdings (YETI) all flashed buy signals, at least intraday.

Tesla (TSLA) is hitting resistance after a recent run. But Tesla stock and other highly valued growth names are showing signs of life.

Microsoft and Google stock are on IBD Leaderboard. GOOGL stock is on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Yeti stock is on the IBD 50 list. Google and Micron stock are on the Big Cap 20.

Dow Jones Futures Today

Dow Jones futures rose 0.15% vs. fair value. S&P 500 futures and Nasdaq 100 futures climbed 0.1%.

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 133 million. Covid-19 deaths topped 2.88 million.

Coronavirus cases in the U.S. have hit 31.55 million, with deaths above 570,000.

California plans to lift most coronavirus restrictions by June 15, but keep its mask mandate.

Stock Market Rally

The stock market rally had a slightly down session that didn’t alter the bullish trend.

The Dow Jones Industrial Average dipped 0.3% in Tuesday’s stock market trading. The S&P 500 index lost 0.1%. The Nasdaq composite edged down less than 0.1%.

The 10-year Treasury yield fell 6 basis points to 1.66%.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Tech Titans Hold Up

Microsoft stock dipped 0.5% to 247.86. On Monday, MSFT stock rose 2.8% to 249.07, clearing a 246.23 flat-base buy point, according to MarketSmith analysis.

Google stock slipped 0.4% to 2,209.26. GOOGL stock on Monday popped 4.2% to 2218.96, also clearing a flat base, with a 2145.24 entry. Both Microsoft and Google stock flashed early entries last week.

Facebook stock retreated 0.9% to 306.26. FB stock on Monday climbed 3.4% to 308.91, above a 299.81 handle buy point from a six-month consolidation.

Tesla Stock

Tesla stock inched up 0.1% to 691.92. On Monday, TSLA stock rose 4.4% to 691.05 following record delivery figures. But that was near session lows after reaching 708.16 intraday, hitting resistance at its 10-week moving average. Tesla stock also needs to get above its March short-term highs and its 50-day line before investors should pay close attention to the huge 2020 winner.

Top ETFs

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) edged up 0.2%, while the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 0.5%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.6%, with MSFT stock the top holding. The VanEck Vectors Semiconductor ETF (SMH) sank 1.4% after several strong gains.

SPDR S&P Metals & Mining ETF (XME) retreated 1% and Global X U.S. Infrastructure Development ETF (PAVE) lost 0.8%. U.S. Global Jets ETF (JETS) climbed 0.8%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) popped 1.8% and ARK Genomics ETF (ARKG) was flat. Tesla stock is the biggest holding across ARK Investments’ ETFs. While TSLA stock was quiet Tuesday, it has rebounded over the last several days, while many other ARK holdings also are perking up, including Roku (ROKU), Baidu (BIDU) and Square stock.

Some of Tuesday’s gains in ARK-type stocks might reflect declining Treasury yields. The rising 10-year Treasury yield has weighed on highly valued growth stocks in the past few months.

Stocks In Buy Range

Yeti stock rose 3% to 75.06, reaching 78.40 intraday. That briefly cleared a 76.87 handle buy point. YETI closed right at a downward-sloping trend line, offering a more-aggressive entry. The maker of premium coolers, drinkware and now luggage reclaimed its 50-day line last week. Yeti stock was Tuesday’s IBD Stock Of The Day.

Square stock climbed 2.85% to 236.50, reclaiming its 50-day line and breaking a downtrend. That could offer an early entry for SQ stock. The official buy point is 283.29.

Micron stock dipped 0.3% to 93.49 after hitting 96.10 intraday, briefly clearing 95.85 entry from a short consolidation. MU stock has been actionable from the 10-week line following the memory chip giant’s earnings and guidance last week. Micron stock is just 4.7% above its 10-week line.

SE stock popped 5.2% to 247.03, retaking its 50-day line. Depending on where you draw it, Sea Ltd. shares also cleared a downward-sloping trend line. This can be an early entry in SE stock, which has an official buy point of 285.10.

Chipotle stock rallied 2.4% to 1,487.48, rebounding from its 50-day line and breaking a downtrend. That’s offering an early entry, with the official buy point at 1,565.01. CMG stock had its best close since Feb. 12, but needs to move a bit higher to get above its March peaks. Investors should note that Chipotle earnings are in two weeks.

Market Rally Analysis

The stock market rally closed little changed Tuesday after trading in a tight range. After back-to-back S&P 500 gains of more than 1% to record highs and the Nasdaq jumping more than 1.5% for three straight sessions to clear key levels — with a number of strong breakouts — a quiet session is just fine.

A stock market rally pause for a few days would let more handles form on bases, while recent breakouts could consolidate gains. As long as the Nasdaq holds above recent highs and especially the 50-day line, then the bullish trend remains intact.

Stock market rally leadership remains fairly broad-based, with some tech titans, chip, commodity, industrial travel and some retail names doing well.

Some highly valued growth names such as 10X Genomics (TXG), Sea Ltd. or Square stock are shaping up. More are like Tesla stock, still below 50-day lines, but at least early repairs are underway. Of course, just as some home improvement projects go unfinished, there’s no guarantee that the next chapter for story stocks will be a happy one.

Investors should be participating in this market rally. Don’t expect a repeat of the April-September run, but there are reasons to be confident now. As you expand your holdings and revise your watchlists, try to have diversity within your leading stocks. That will help you avoid big portfolio moves from group sell-offs, while keeping you in tune with the market and leading stocks.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Technology

Pixel 5 sees massive GPU performance gains with April 2021 update

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The latest software update for the Google Pixel lineup recently started rolling out to users. The update includes a host of connectivity, camera, and stability improvements for the entire lineup, along with performance optimizations for the Google Pixel 5 and the Pixel 4a 5G. These optimizations have significantly enhanced the gaming performance of Google’s latest flagship, as per recent reports.

When Google rolled out the first stable Android 11 release for its Pixel devices, some users noticed that the graphics benchmark numbers significantly declined following the update. As per HotHardware’s testing, the Pixel 4 XL and Pixel 4a took a major hit in graphical performance. Since the Pixel 5 and the Pixel 4a 5G launched with Android 11 pre-installed, we had no way to verify if the phones also suffered a similar issue. However, Anandtech noted that the Pixel 5 vastly underperformed similar devices featuring the Snapdragon 765G chip. This led many to believe that the Android 11 update was the culprit.

Source: Google

In the April 2021 update, the changelog mentions some “performance optimizations for certain graphics-intensive apps & games.” Andreas Proschofsky from Der Standard tested the GPU performance of the Pixel 5 following the update using 3DMark, and he found that the results are now 30-50% better than before. According to recent tweets, his Pixel 5 scored around 2278/2260 for the OpenGL/Vulkan tests in 3DMark Sling Shot Extreme before the April update. After installing the update, the phone scored 3286/3083 in the same test, which is a substantial improvement. Andrei from Anandtech has also confirmed that the update has “essentially doubled” his Pixel 5’s performance. We assume that the Pixel 4a 5G will see similar gains, given that it’s also mentioned in the official changelog.

At the moment, we don’t know the exact cause of the GPU performance regression. We aren’t sure if there’s an issue in the Android 11 update that’s specifically causing this problem or if Google messed up somewhere. We’ll make sure to let you know as soon as we find out.



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Business

Weekly jobless claims higher than expected despite signs of labor gains

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First-time claims for jobless benefits were higher than expected last week, with 719,000 more workers heading to the unemployment line, the Labor Department reported Thursday.

The total compared with the 675,000 estimate from Dow Jones and was above last week’s downwardly revised 658,000.

While the number of weekly claims remains inordinately high by historical measures, the trend is falling now that the U.S. economy continues to reopen and nearly 3 million Americans are receiving vaccinations each day for Covid-19.

Continuing claims, which run a week behind the headline number, fell by 46,000 to just below 3.8 million.

“Taking the two weeks together it’s clear that the trend in claims is falling,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We expect a sustained sharp decline in the second quarter as the economy reopens, making it easier for businesses under financial stress to hold onto employees.”

In another sign of the declining unemployment trend, the four-week moving average of claims dropped to 719,000, the lowest since March 14, 2020, just as the pandemic started.

The total of those receiving benefits also dropped sharply, declining by 1.5 million to 18.2 million, due largely to a decrease in those receiving pandemic-related benefits. That data runs two weeks behind.

At the state level, Virginia (+30,696), Kentucky (15,869), Georgia (11,862) and California (9,628) reported the largest gains, according to unadjusted data.

The report comes a day ahead of the government’s nonfarm payrolls count for March, which is expected to show a gain of 675,000, to follow on February’s 379,000. Ohio (-15,718) and Massachusetts (-12,755) reported the largest declines.

Along with the efforts to combat the virus, the Biden Administration continues to shovel money to boost an economy that is showing signs of solid growth. The president put forth a $2 trillion spending plan Wednesday that will build on more than $5 trillion of stimulus either already spent or announced on programs aimed at pulling the nation out of the crisis slump.

While the pace of job gains slowed in the early part of the winter, recent indications are that hiring has picked up.

Payroll processing firm ADP estimated that the companies added 517,000 workers in March, the fastest pace since September. Recent manufacturing reports also show plans ahead for more hiring, and job gains appear to be strongest in the battered hospitality sector, which took the worst of the losses due to social distancing and government-imposed restrictions.

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Business

Asian stocks shed gains as China worries grow By Reuters

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© Reuters. A man is reflected on a stock quotation board in Tokyo

By Alun John and Chris Prentice

HONG KONG/WASHINGTON (Reuters) – Asian stocks reversed earlier gains on Tuesday, weighed by Chinese markets as investors took profit on a recent rally in some mainland firms, although ebbing inflation fears helped shore up broader sentiment in the region.

Investors now await a closely watched Congressional appearance by U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen later in the day.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.57%, hurt by a 1.5% fall in Chinese blue chips.

Gary Ng, economist at Natixis, said Chinese shares had run ahead of other Asian markets recently, which meant they were due for some kind of correction.

Overnight announcements of new sanctions also did not help Chinese stocks, even though analysts said markets had become fairly accustomed to such developments.

The United States and others including the European Union sanctioned Chinese officials on Monday for human rights abuses in Xinjiang, and Beijing hit back with punitive measures against European lawmakers, diplomats, institutes and families.

Jin Jing, an analyst with China Fortune Securities, said sanctions hurt risk appetite, in particular for foreign investors, who sold shares via the Stock Connect.

Persistent worries of policy tightening at home also continued to weigh on high-flying sectors and stocks with lofty valuations as investors turned cautious.

Beyond China, Asian shares were mixed after Wall Street’s gains on Monday as investors cheered a break in the recent run-up of bond yields.

The rose 0.32%, the gained 0.70% and the added 1.23%.

Developed markets and emerging Asia also managed to digest a surprise move by Turkey’s President to replace the central bank governor with a critic of high interest rates.

“It doesn’t appear that you’re going to see much contagion from Turkey,” said Alex Wolf, head of investment strategy for Asia at J.P. Morgan Private Bank citing “pretty strong flows into Asia”.

“Investors are less looking at emerging markets as one giant bloc.”

Benchmark 10-year notes ticked up slightly, last yielding 1.6857%, but down from 1.732% late on Friday.

“U.S. risk assets were aided by a dip in Treasury yields to start the week. Movements in yields will continue to be closely watched this week amid a series of U.S. Treasury auctions and testimony by Treasury Secretary Yellen and Fed Chair Powell,” ANZ Research said in a daily note.

Fed Chair Powell said in remarks prepared for a congressional hearing on Tuesday that the U.S. recovery had progressed “more quickly than generally expected and looks to be strengthening”.

The dollar’s index against a basket of six major currencies stood almost flat in early Asian trade at 91.853, having slipped 0.32% on Monday.

But oil dropped amid ample supply and concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in fuel demand.

U.S. West Texas Intermediate futures dropped 1.28% and futures dropped by 1.27%.



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Business

Oil Erases Gains With IEA Cooling Talk of Price Supercycle

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(Bloomberg) — Oil erased gains as the International Energy Agency said talk of an upcoming supply shortfall could be misleading.

Futures in New York declined 0.2%, giving up earlier gains of as much as 0.8%. OPEC and its partners could quickly deploy their stalled production spare capacity to quash oil price rallies, the IEA said in its monthly report. Demand won’t return to pre-virus levels until 2023, the agency said in a separate report.

Traders will get more supply information Wednesday with the U.S. inventory data, which could show the first decline in crude stockpiles since mid-February. The Federal Reserve policy statement is also due later.

Despite the recent retreat, oil is still up more than 33% this year as OPEC+ output cuts tighten supply and as the demand outlook improves with the rollout of Covid-19 vaccines. Consumption is roaring back in some regions including the U.S., although parts of Europe are struggling. There’s also been some recovery in the dollar, curbing crude’s gains of late.

Oil “is clearly struggling to find direction after the IEA report and longer term forecast gave something to both the bull and bear camp,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Global demand is being upgraded while U.S. supply growth is expected to remain subdued.”

See also: Traders Snap Up Europe’s Gasoline After U.S. Stockpiles Collapse

Attention is sharpening on the U.S. supply picture after the recent Texas freeze caused a serious of gyrations in the market. Earlier this week profit from making gasoline neared $25 a barrel following some of the biggest inventory draws on record. That’s pulled European supply to help fill the gap.

At the same time, crude inventories have been growing in recent weeks. It’s forced the prompt timespread for WTI into contango, a bearish market structure. U.S. producers have bounced back after the cold blast last month, although some refiners are yet to fully resume normal operations, leading to excess crude supplies.

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

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Business

Dow Jones Futures: Stock Market Rally Gains Steam As Microsoft, Google Flash Buy Signals; Vaccine Maker Spikes Late

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Dow Jones futures tilted higher late Thursday, while S&P 500 futures were little changed and Nasdaq futures fell as Treasury yields rose slightly. The stock market rally had a strong session Thursday, as the S&P 500 index and Russell 2000 joined the Dow Jones in new high ground. The Nasdaq composite led with a strong gain but volume was light.




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Arcelor Mittal stock and Regal Benoit (RBC) were among several “blue dot” breakouts Thursday, while Microsoft stock, Google parent Alphabet (GOOGL) and Dynatrace (DT) flashed buy signals.

On Wednesday, IBD declared that the uptrend had resumed with the Dow closing at a new high and many real economy stocks breaking out. The stock market rally broadened further Thursday. Nasdaq made a strong move, retaking some key levels, though it did not qualify as a follow-through day. Growth stocks rebounded.

Why This IBD Tool Simplifies The Search For Top Stocks

After the close, DocuSign (DOCU) and Ulta Beauty (ULTA) headlined key earnings reports. DOCU stock fell modestly late despite strong results and guidance. Ulta stock plunged on a weak outlook and the CEO’s exit.

Meanwhile, Novavax (NVAX) reported a 96.4% efficacy rate vs. the original coronavirus strain in final analysis of a phase three U.K. trial. NVAX stock jumped overnight.

Stocks In Buy Zones

Global steel giant Arcelor Mittal (MT), power generator and motor maker Regal Benoit, contract electronics manufacturer Jabil Circuit (JBL), new shipping IPO Zim Integrated Shipping Services (ZIM) and Discover Financial (DFS) all broke out Thursday.

MT stock and the others all have relative strength lines at new highs, reflecting their outperformance vs. the S&P 500 index. RS lines at new highs while still in a base or breaking out is an especially bullish trend. So MarketSmith marks such stocks with a blue shaded dot at the end of the RS line.

Meanwhile, Dynatrace (DT) broke a downtrend, flashing a buy signal. Microsoft (MSFT) reclaimed a buy point and moved back some other levels. Google stock flashed some early buy signals.

Arcelor Mittal stock, Regal Benoit, Discover and Google joined Microsoft on IBD Leaderboard. Microsoft stock is on IBD Long-Term Leaders. Google stock is on the IBD 50 list. RBC stock was Thursday’s IBD Stock Of The Day.

Dow Jones Futures Today

Dow Jones futures rose 0.2% vs. fair value. S&P 500 futures were roughly flat. Nasdaq 100 futures lost 0.3%.

The Treasury yield rose slightly to 1.55% in extended trade.

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 119.11 million. Covid-19 deaths topped 2.64 million.

Coronavirus cases in the U.S. have hit 29.21 million, with deaths above 543,000.

President Joe Biden said late Thursday that he’ll direct the states to make all adults eligible for the coronavirus vaccine by May 1. Vaccination rates continue to trend higher while vaccine supplies are surging.

Novavax said its Covid vaccine reported a 96.4% efficacy rate vs. the most-common strain in a phase three trial. In a phase 2b trial in South Africa, the Novavax vaccine had a 55.4% efficacy rate vs. HIV-negative participants, as the B1.351 variant dominant there has proved harder to block among various vaccines.

However, the Novavax vaccine was 100% effective in preventing severe disease, including all hospitalizations and deaths.

Novavax won’t seek U.S. approval until data from a U.S. trial is out, but that presumably will show strong results as well.

Novavax stock spiked more than 20% overnight. NVAX stock skyrocketed in late January to early February on preliminary vaccine results, but gave almost all of that back before a recent bounce.

Earlier Thursday, new research showed further evidence that the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine is extremely effective.

Stock Market Rally

The stock market rally broadened out, with more indexes at record highs, more stocks breaking out and the growth names continuing to recover from steep sell-offs. President Biden signed the $1.9 trillion spending bill into law on Thursday.

The Dow Jones Industrial Average rose 0.6% in Thursday’s stock market trading. The S&P 500 index gained 1% and the small-cap Russell 2000 advanced 2.3%, both to record highs. The Nasdaq composite jumped 2.5%, retaking its 21-day exponential moving average and 50-day line.

Before Thursday’s open, the 10-year Treasury yield fell as low as 1.48% and later rose to around 1.54%. The yield closed up 1 basis point at 1.53% following a 30-year Treasury auction. Yields fell Wednesday after a 10-year Treasury auction.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied 4.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) popped 4.75%. Both are rebounding above their 50-day lines. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 3.1%, with Microsoft stock its biggest holding. The VanEck Vectors Semiconductor ETF (SMH) advanced 4.2%.

Reflecting more-speculative story stocks, Ark Innovation ETF jumped 6.2% and Ark Genomics ETF 5.6%.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Blue Dot Specials

Arcelor Mittal stock ran up 7.7% to 26.77, breaking out past a 25.85 buy point from a cup base in the heaviest volume since June 30. The relative strength line for MT stock is at a new high. That makes Mittal stock a blue dot special.

Regal Benoit stock rallied 3.6% to 148.82, above a 147.07 buy point from a cup base. Volume was the heaviest in years for RBC stock.

Zim Integrated Shipping stock spiked 14.5% to 23.35, hitting a new high and clearing a 22.68 buy point from an IPO base. Volume was the heaviest since Feb. 2, the fourth day of trading for ZIM stock. The ZIM IPO came public at 15 a share and quickly ran up before pausing, strong action for a new issue. Zim is profitable with booming EPS growth in the latest quarter. It’s due to give its first-ever earnings report as a public company on March 22.

Discover Financial stock climbed 2.7% to 102.27, above a 101.06 buy point. Volume was below average for DFS stock, continuing a trend.

Jabil Circuit stock jumped 5.25% to 47.71, clearing a 42.28 buy point from a flat base in above-average trade. That follows a strong JBL stock uptrend from early November to mid-January. Note that Jabil earnings are due next Tuesday, so that doesn’t leave much room for JBL stock to get much of a cushion.

IBD Stock Of The Day Powers Into Buy Zone Amid Faster Growth

Tech Stocks Flashing Buy Signals

Dynatrace stock popped 5.9% to 54.11, breaking a downtrend starting with its Feb. 9 peak of 56.77. With the market correction, DT stock fell back slightly into its old base, but found support at its 50-day line and quickly rebounded. That’s far better than most growth software names. Investors could take a small position now, perhaps using a close below Wednesday’s low of 50.46 as a sell signal.

Microsoft stock rose 2% to 237.13, once again retaking its 232.96 buy point and its 21-day line. MSFT stock is just 2.2% above its 10-week line, offering a possible entry as a Long-Term Leader. Microsoft stock could be forming a new base with a potential 246.23 entry. Keep in mind that the RS line for MSFT has lagged for several months. But, it’s held up better than most techs in the past few weeks.

Google stock climbed 3.2% to 2,100.54, rebounding again from its 21-day line. GOOGL stock has a 2,145.24 three-weeks-tight entry. Investors could make an early entry here, with Google stock closing above any prior weekly close. Also, the RS line is just below last week’s record high.

Stock Market Rally Analysis

On Wednesday, the Dow Jones moved to a new high. That day’s price-and-action move was strong enough to be a follow-through day, but IBD decided that the Dow had never fallen enough to be considered a correction. So the market direction moved to “Uptrend Resumes,” with a strong bias toward real economy stocks.

So the question heading into Thursday was how the divided market would behave. Would the Nasdaq join the uptrend or would it pull down the broader market once again.

On Thursday, the Dow Jones moved further into new high ground, while the S&P 500 and Russell 2000 also hit highs.

The Nasdaq composite rallied strongly above key levels. But Nasdaq volume fell slightly vs. Wednesday. So Thursday didn’t qualify as a follow-through day to confirm the Nasdaq market rally.

Rising Treasury yields have pressured growth stocks and were a big catalyst for the sell-off in recent weeks. If the 10-year Treasury yield can hold in its recent range of 1.4%-1.6%, markets may take that in stride. A more-gradual rise toward 2% also might not trigger selling.

What Investors Should Do Now

With the market back in an uptrend, investors should be looking to add exposure. Look for stocks that are breaking out or sending other bullish signals.  Most of those will be real economy names, with Dynatrace, Microsoft and Google stock exceptions.

Most growth stocks have significant repair work to do. Yes, if you buy these names as they rebound off the bottom and they keep running, you’ll see big gains. But if the Nasdaq reverses, the selling can be just as fierce. The goal isn’t to buy at the lowest possible price, but at a price where your odds of success are higher.

Investors also could buy ETFs, such as SPY or a broad sector ETF. More-aggressive traders might step into QQQ or a growth ETF such as IGV, SMH or FFTY as a way to play a growth rally with few individual names in position.

Don’t feel compelled to step on the gas, especially in this unusual split market. You might want to save some powder for growth stocks if and when those names become actionable again. Also, if the Nasdaq resumes heavy selling, the broader market would come under pressure.

Let the stock market pull you in. If the rally gains steam and more stocks break out, you’ll gradually increase your exposure.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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Business

Dollar hovers near three-month high as bonds sell off; risk currencies pare gains By Reuters

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© Reuters. A man displays US dollar notes after withdrawing cash from a bank in Harare

By Stanley White and Sagarika Jaisinghani

TOKYO (Reuters) – The dollar hovered near three-month highs on Monday after the U.S. Senate passage of a bumper stimulus bill sparked another sell-off in the bond market, while currencies of major commodity exporters pulled back as a broader risk-on trade lost momentum.

The stood at 92.073 against a basket of six major currencies, up 0.17% and near its three-month high of 92.201 set on Friday.

The Senate passed a $1.9 trillion COVID-19 relief plan, a day after a stunning U.S. jobs report sent the greenback to its highest level since November 2020.

“The dollar is in demand as the United States is the most services-heavy economy globally, and once the reopening narrative goes in full swing, that will provide the icing on the cake,” said Stephen Innes, chief global markets strategist at Axi.

While investors have increased bets on a faster economic rebound this year, concerns about higher inflation have pushed up bond yields despite assurances from central banks including the U.S. Federal Reserve that monetary policy will stay loose.

The yield on the benchmark U.S. 10-year Treasuries hovered near one-year highs on Monday, while U.S. Nasdaq futures fell about 1% and European stock index futures pared gains as the selloff also spread to other risk assets. [MKTS/GLOB]

Speculators cut their net short dollar positions in the latest week to $27.80 billion, which is the smallest short position since Dec. 15 and suggests that dollar bears are giving up on betting against the greenback. [IMM/FX]

The dollar held near a one-month high against the British pound, which traded at $1.3819, and a three-month high against the euro, which stood at $1.1904.

Against the low-yielding yen, the greenback held steady at 108.39 yen, having hit a nine-month high of 108.645 on Friday.

“More significant pushback from other central banks to their respective bond markets over the last week than the Fed provided has given reason for the dollar move to broaden out,” Innes said.

eased to a more-than-two-month low, with the bounce in the dollar and U.S. yields prompting many investors to re-evaluate forecasts for the yuan, which the market had expected to be stronger for the remainder of this year. [CNY/]

The Australian dollar rose 0.2% to $0.7696, but was well off its session high of $0.77230. The New Zealand dollar was down about 0.1% after earlier rising 0.4% to $0.719. The antipodean currencies have been in demand because of their links to the global commodities trade.

The U.S. currency fell 0.38% against the Norwegian crown to 8.5283 and eased slightly to 1.2637 Canadian dollars as traders bought the currencies of oil exporters.

Some traders said a jump in futures above $70 a barrel for the first time in more than a year triggered a flurry of bids for commodity currencies at the start of Asian trading.

========================================================

Currency bid prices at 0430 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar $1.1904 $1.1908 -0.05% -2.59% +1.1932 +1.1899

Dollar/Yen 108.3950 108.2600 +0.12% +4.93% +108.4850 +108.3450

Euro/Yen 129.03 129.09 -0.05% +1.66% +129.3900 +128.9800

Dollar/Swiss 0.9318 0.9311 +0.08% +5.33% +0.9319 +0.9299

Sterling/Dollar 1.3821 1.3831 -0.09% +1.15% +1.3864 +1.3810

Dollar/Canadian 1.2654 1.2649 +0.05% -0.62% +1.2663 +1.2624

Aussie/Dollar 0.7696 0.7680 +0.21% +0.05% +0.7722 +0.7686

NZ 0.7158 0.7165 -0.10% -0.32% +0.7190 +0.7152

Dollar/Dollar

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ



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Business

U.S. economy gains 379,000 jobs in February, in first full monthly employment report under Biden

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The U.S. economy added 379,000 jobs in February, roundly beating economists’ estimates of 210,000, and indicating that one year into the pandemic, the labor market is finally showing signs of recovery.

In the first full monthly employment report under President Joe Biden, the unemployment rate fell to 6.2 percent,from 6.3 percent in January, according to data released Friday by the Bureau of Labor Statistics.

“The ship is pointed in the right direction, and the additional stimulus coming from Congress should be the wind in the sails to get the economy back on track,” said Charlie Ripley, Senior Investment Strategist for Allianz Investment Management.

The latest jobs report comes after a month of stumbles in Covid-19 vaccine deployment and frigid weather that plunged Texas and large parts of the South into a deep freeze that froze oil rigs, ruptured household plumbing and cost lives.

The January’s jobs report, which showed just 49,000 jobs were added, was revised upwards on Friday to 166,000.

Although the economy has clearly been adding jobs, those gains mask the extent to which the labor market is still being held back, and the number of people who have been sidelined for a diverse array of reasons, from child care obligations to health concerns to a lack of job opportunities in fields still devastated by the pandemic.

Although monthly job gains have surged and ebbed wildly over the past year, an overarching pattern of slowing employment gains worries labor market observers.

“The unemployment rate itself is a bad descriptor of the current labor market conditions,” said Andrew Stettner, senior fellow at the Century Foundation.

Dan North, chief economist, North America at Euler Hermes, said that although nearly 60 percent of the jobs lost since the onset of the pandemic have been recovered, the labor force participation rate shows another story. “When you go and look at the participation rate, we’ve recovered about 41 percent of what was lost — so it is slower,” he said.

“When you look at the participation rate, we’ve recovered about 41 percent of what was lost.”

The discrepancy arises because of how the government tallies who has a job, and who is actively looking for a job. People aren’t captured by the official unemployment rate if they have dropped out of the labor force. “There’s a lower participation rate because people have left. That’s the disconnect,” North said.

Federal Reserve Chair Jerome Powell said last month that the nation’s real unemployment rate is closer to 10 percent, and the flagging labor force participation rate — which was 63.4 percent in February 2020, when unemployment was at just 3.5 percent — reflects that. “My guess is we won’t see that again until late 2022,” said Bob Phillips, co-founder of Spectrum Management Group.

Mark Hamrick, senior economic analyst at Bankrate, said those hard-won gains in labor force participation prior to the pandemic were a function of a long-running stretch of job growth. “The low unemployment rate was essentially leading to more improvement in the fortunes of individuals in sectors and communities that previously had not taken part” in the early years of the economic recovery, Hamrick said.

Now, many of these individuals face an existential threat to their employment prospects. Covid-19 dealt an especially hard blow to service industries that depend on person-to-person contact, such as travel, dining, entertainment and in-person retail. The people who hold these jobs — many of which are low-skill and low-paying — are already at a higher risk of falling behind economically, and they now risk falling behind in employment recovery, as well.

While college-educated people lost proportionately fewer jobs and have regained more of them, people who graduated high school but never obtained a college degree have not been so lucky. “Lower-paid workers, lower-educated workers … they’ve been left behind. They’ve got skills that haven’t been developed, and we’re all less wealthy because of that,” Phillips said.

Women, and particularly young women, have lost ground — an observation noted by the Fed’s Powell as well as other officials as a stumbling block that could impede a broader economic rebound. “Women are staying at home because of the school situation, so that is a really significant change that Covid has brought about and will probably stick with us for a while, I think — schools are only slowly opening up,” North said.

They will never make up for this time out of the labor force, because they will never make up for the skill sets they would have acquired by working.

“One of the key determinants of whether someone’s in the labor force right now is whether children are in school. As that would seem to be resolved, that could lead to more individuals in the labor force,” Hamrick said. “And one would hope a good number of those people would be able to be reemployed.”

The clock is ticking, though, for those workers still waiting for the opportunity to renter the workforce. Another metric that alarms labor economists is the percentage of people classified as long-term unemployed — that is, people out of work for 27 weeks or longer. These workers, who number about 4 million, now make up roughly 2 in 5 of America’s jobless.

The longer unemployment lasts, the more that duration becomes a hurdle in its own right, as employers may perceive that people’s skills have atrophied. In a job market with elevated unemployment, hiring managers may then elect to choose an applicant with a shorter stint out of the workforce, reinforcing the challenges facing the long-term unemployed.

“When people are out of the labor market, they just don’t keep up in terms of changes in work patterns and skill sets, and that becomes a bigger barrier to get back in,” Phillips said.

“The longer it takes somebody to get active in the labor market … history shows they’ll never make up for this time, because they’ll never make up for the lost skill sets they haven’t acquired by working.”

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Business

Stocks rise as yields pare gains, JNJ vaccine receives authorization

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TipRanks

Billionaire Steven Cohen Picks Up These 3 “Strong Buy” Stocks

Last week, the NASDAQ slipped below 13,200, making the net loss from its all-time peak, reached earlier this month, 6.4%. If this trend keeps up, the index will slip into correction territory, a loss of 10% from its peak. So what exactly is going on? At bottom, it’s mixed signals. The COVID-19 pandemic is starting to fade and the economy is starting to reopen – strong positives that should boost markets. But an economic restart brings with it inflationary pressures: more people working means more consumers with money in their pockets, and the massive stimulus bills passed in recent months – and the bill working through Congress now, which totals $1.9 trillion – have put additional funds in people’s wallets and liquidity into the economy. There is pent-up demand out there, and people with money to spend, and both factors will work to push up prices. We can see one effect of all of this in the bond market, where the ten-year Treasury bond is yielding 1.4%, near a one-year high, and it has been trending upwards in recent weeks. This may be a case of jumping the gun, however, as Federal Reserve Chair Jerome Powell has said in testimony before the Senate that he is not considering a move to boost interest rates. In other words, these are confusing times. For those feeling lost in all of the stock market fog, investing gurus can offer a sense of clarity. No one more so than billionaire Steven Cohen. Cohen’s investment firm, Point72 Asset Management, relies on a strategy that involves investments in the stock market as well as a more macro approach. This very strategy has cemented Cohen’s status as a highly respected investing powerhouse, with the guru earning $1.4 billion in 2020 thanks to a 16% gain in Point72′s main hedge fund. Bearing this in mind, our focus shifted to Point72’s most recent 13F filing, which discloses the stocks the fund snapped up in the fourth quarter. Locking in on three tickers in particular, TipRanks’ database revealed that each has earned a “Strong Buy” analyst consensus and boasts significant upside potential. Array Technologies (ARRY) The first new position is in Array Technologies, a ‘green tech’ company providing tracking technology for large-scale solar energy projects. It’s not enough just to deploy enough photovoltaic solar collection panels to power an energy utility; the panels have to track the sun across the sky, and account for seasonal differences in its path. Array delivers solutions to these problems with its DuraTrack and SmarTrack products. Array boasts that its tracking systems will improve the lifetime efficiency of solar array projects, and that its SmarTrack system can boost energy production by 5% overall. The company clearly has impressed its customers, as it has installations in 30 countries, in more than 900 utility-scale projects. President Biden is expected to take executive actions to boost green economic policy at the expense of the fossil fuel industry, and Array could potentially benefit from this political environment. This company’s stock is new to the markets, having held its IPO in October of last year. The event was described as the ‘first big solar IPO’ in the US for 2020, and it was successful. Shares opened at $22, and closed the day at $36. The company sold 7 million shares, raising $154 million, while another 40.5 million shares were put on the market by Oaktree Capital. Oaktree is the investment manager that had held a majority stake in the company since 2016. Among Array’s fans is Steven Cohen. Scooping up 531,589 shares in Q4, Point72’s new ARRY position is worth over $19.7 million at current valuation. Guggenheim analyst Shahriar Pourreza also seems to be confident about the company’s growth prospects, noting that the stock appears undervalued. “Renewable energy companies have seen a large inflow of capital as a result of the ‘blue wave’ and the Democrats’ control of the White House and both chambers of Congress; however, ARRY continues to trade a significant discount to peers,” the 5-star analyst noted. Pourreza added, “We continue to be bullish on ARRY’s growth prospects driven by 1) tracker market share gains over fixed-tilt systems, 2) ARRY market share gains within the tracker industry, 3) ARRY’s large opportunity in the less-penetrated international market, 4) the opportunity to monetize their existing customer base over the longer-term through extended warranties, software upgrades, etc., which are highly margin accretive.” In line with these bullish comments, Pourreza rates ARRY shares a Buy, and his $59 price target implies a 59% upside from current levels. (To watch Pourreza’s track record, click here) New stocks in growth industries tend to attract notice from Wall Street’s pros, and Array has 8 reviews on record since it went public. Of these, 6 are Buys and 2 are Holds, making the consensus rating on the stock a Strong Buy. The average price target, at $53.75, suggests room for ~45% upside in the next 12 months. (See ARRY stock analysis on TipRanks) Paya Holdings (PAYA) The second Cohen pick we’re looking at is Paya Holdings, a North American payment processing service. The company offers integrated payment solutions for B2B operations in the education, government, healthcare, non-profit, and utility sectors. Paya boasts over $30 billion in payments processed annually, for over 100,000 customers. In mid-October of last year, Paya completed its move to the public market via a SPAC (special acquisition company) merger with FinTech Acquisition Corporation III. Cohen is standing squarely with the bulls on this one. During Q4, Point72 snapped up 3,288,843 shares, bringing the size of the holding to 4,489,443 shares. After this 365% boost, the value of the position is now ~$54 million. Mark Palmer, 5-star analyst with BTIG, is impressed with Paya’s prospects into the mid-term, writing, “We expect PAYA to generate revenue growth in the high-teens during the next few years, with Integrated Solutions poised to grow in the mid-20s and Payment Services set to grow in the mid-single digits. At the same time, the company’s operating expenses should grow in the 5% context, in our view. As such, we believe PAYA’s adjusted EBITDA growth will be north of 20% during the next few years, and that its adjusted EBITDA margins will expand to 28% by YE21 from 25% in 2019.” Palmer puts an $18 price target on PAYA shares, indicating his confidence in 49% growth for the year ahead, and rates the shares as a Buy. (To watch Palmer’s track record, click here) PAYA’s Strong Buy analyst consensus rating is unanimous, based on 4 Buy-side reviews set in recent weeks. The shares have an average price target of $16, which suggests ~33% upside potential from the current share price of $12.06. (See PAYA stock analysis on TipRanks) Dicerna Pharma (DRNA) Last but not least is Dicerna Pharma, a clinical stage biotech company with a focus on the discovery, research and development of treatments based on its RNA interference (RNAi) technology platform. The company has 4 drug candidates in various stages of clinical trials and another 6 in pre-clinical studies. The company’s pipeline clearly got Steven Cohen’s attention – to the tune of taking a new stake totaling 2.366 million shares. This holding is worth $63.8 million at current values. The drug candidate farthest along Dicerna’s pipeline is nedosiran (DCR-PHXC), which is being investigated as a treatment for PH, or primary hyperoxaluria – a group of several genetic disorders that cause life-threatening kidney disorders through overproduction of oxalate. Nedosiran inhibits the enzyme that causes this overproduction, and is in a Phase 3 trial. Top-line results are expected in mid-’21 and, if everything goes as planned, an NDA filing for nedosiran is anticipate near the end of 3Q21. Covering the stock for Leerink, analyst Mani Foroohar sees nedosiran as the key to the company’s near-term future. “We expect nedosiran could see approval in mid-2022, placing the drug roughly a year and a half behind competitor Oxlumo (ALNY, MP) in PH1… A successful outcome will transform DRNA into a commercial rare disease company in an attractive duopoly market with best-in-class breadth of label,” Foroohar noted. To this end, Foroohar rates DRNA an Outperform (i.e. Buy), and his price target of $45 suggests a one-year upside potential of 66%. (To watch Foroohar’s track record, click here) All in all, Dicerna Pharma has 4 Buy reviews on record, making the Strong Buy unanimous. DRNA shares are trading for $26.98, and their $38 average price target puts the upside at ~41% over the next 12 months. (See DRNA stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Business

GameStop’s meteoric gains have almost entirely disappeared — here’s advice for those who didn’t get out in time

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The author of the Cracked Market blog, Jani Ziedins, last week warned the traders piling into the videogames retailer GameStop not to get greedy — or more specifically, not to be a pig.

Well.

As the chart shows, that short squeeze worked until it didn’t. Momentum fizzled after Robinhood and other brokerages limited access to trading in GameStop
GME,
-42.11%
and other securities that were surging in popularity. As to why, there will be Congressional hearings to find out the culprit — hedge funds or good-old-fashioned margin requirements — but the end result is the same.

GameStop may still have its moments. “As for what comes next, GME will be insanely volatile for weeks and even months. That means 50% and 100% moves in both directions. But at this point, a 50% bounce only gets us back to $75. Maybe we get back to $100 or even $125, but waiting for anything higher is just wishful thinking,” Ziedins says.

Here’s Ziedins’ advice now. “For those that still have money left in the market, there is no reason to ride this all the way into the dirt. Cash in what you have left, learn from this lesson, and come back to the market better prepared next time,” says the Cracked Market blogger.

Cue, Frank Sinatra.

And those traders are inexperienced. Cardify, a consumer-data firm, did a survey of 1,600 self-directed investors in GameStop and cinema chain AMC Entertainment
AMC,
-20.96%
and found that most were inexperienced investors — 44% having less than 12 months of experience, and another quarter with one to two years’ experience. Nearly half made their biggest-ever do-it-yourself trading investment in the last four weeks, according to the survey that ended on Monday.

Why? Of these overwhelmingly young and male investors, 45% said for quick financial profits. Nearly 20% said it was part of a long-term investing strategy, and 16% said to spite big hedge funds and institutional investors, according to Cardify.

The buzz

The U.S. added 49,000 nonfarm payrolls jobs in January while the unemployment rate fell to 6.3%, according to the Labor Department.

The U.S. Senate in the early hours of the morning approved a budget resolution that will allow for a fast tracking of the $1.9 trillion coronavirus relief plan proposed by the Biden administration to be approved without Republican support. Vice President Kamala Harris cast the tiebreaking vote. Johnson & Johnson
JNJ,
+0.93%
meanwhile submitted its coronavirus vaccine for Food and Drug Administration approval.

Pinterest
PINS,
+0.91%
shares jumped 11% in premarket trade, as the art-sharing social-media service reported forecast-beating earnings on a 76% jump in revenue during the fourth quarter. Another social-media service, Snap
SNAP,
-1.60%,
also beat expectations. Besides using social media, people stuck at home were playing videogames, as Activision Blizzard
ATVI,
-0.10%
gained 8% after it reported stronger earnings and bookings than expected, increased its dividend by 15%, and authorized a $4 billion share buyback plan.

Ford Motor Co.
F,
+1.52%
reported a surprise profit and topped expectations.

Exercise-bike maker Peloton Interactive
PTON,
+7.04%
slumped 7% as it did beat on earnings but flagged a rise in shipping and other costs. T-Mobile US
TMUS,
+0.95%,
the mobile service operator, also beat earnings expectations but guided to a softer 2021 than expected.

Luckin Coffee, the U.S.-listed Chinese coffee retailer, filed for bankruptcy protection, less than a year after an accounting scandal.

The market

After the S&P 500
SPX,
+1.09%
ended Thursday at a record for the sixth time in 2021, U.S. stock futures
ES00,
+0.37%

NQ00,
+0.20%
pointed to another day of gains.

The yield on the 10-year Treasury
TMUBMUSD10Y,
1.158%
moved up to 1.16%, after ending Thursday at its highest in 11 months.

The chart

The more things change, the more they stay the same. Today’s technology giants are following a similar trajectory to the radio makers of the 1920s, as well as the dot-com era around the turn of the century. “So the point is that you can be a firm believer in tech’s ability to transform our lives but still think valuations might be in a bubble,” said Jim Reid, strategist at Deutsche Bank.

Random reads

This local government meeting over Zoom
ZM,
+2.50%
turned into a chaotic, internet sensation.

Chocolate sales were 40% to 50% higher in areas with an increased number of COVID-19 cases, according to confectioner Hershey
HSY,
+0.44%.

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