Dow Jones futures fell modestly late Thursday, along with S&P 500 futures and Nasdaq futures. The post-election stock market rally delivered another hefty gain Thursday, boosted by generally positive earnings and dovish rhetoric from the Federal Reserve. Megacap stocks such as Apple (AAPL) and Microsoft stock are flashing buy signals.
XAfter the close, Roku stock, Square (SQ), Cloudflare (NET), Axon Enterprise (AAXN), Trade Desk (TTD), T-Mobile US (TMUS) and Peloton Interactive (PTON) were among the many notable earnings reports.
Roku (ROKU), Square stock, Cloudflare, Axon Enterprise, Trade Desk, T-Mobile and Peloton all beat quarterly earnings views, with Roku streaming in a surprise profit. All but Peloton stock rose overnight. Axon and T-Mobile stock, at least, are flashing buy signals.
Stock Market Rally Continues On Election Results
Wednesday's strong gains confirmed a stock market rally on the Dow Jones and S&P 500. The major indexes and leading stocks continued their powerful advance on Thursday, with the Nasdaq staging its own follow-through day. The Dow Jones closed well above its 50-day line. The Nasdaq and S&P 500 index rallied to just below their mid-October peaks.
Microsoft (MSFT), looking a lot like the Nasdaq and S&P 500, continues to flash buy signals. Apple stock, Amazon.com and Salesforce.com (CRM) also are offering early entries now. Facebook (FB) and Google parent Alphabet (GOOGL) rose further in their buy ranges.
Several more leading stocks cleared buy points Thursday, including II-VI (IIVI), Yeti (YETI) and Palantir (PLTR), while recent breakouts extended gains.
Investors appear to like the current election results, which suggest that Joe Biden will win the presidential race while the GOP is favored to hold the Senate, suggesting no big sweeping changes. However, there's still a dwindling chance that President Donald Trump could pull out another Electoral College victory. Meanwhile, Georgia will likely hold runoffs for two Senate seats on Jan. 5.
Microsoft stock is on IBD Leaderboard. Microsoft and CRM stock are IBD Long-Term Leaders. Amazon stock and Facebook are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.4% vs. fair value. S&P 500 futures sank 0.45%. Nasdaq 100 futures retreated 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.
But Dow Jones futures have pointed to strong market gains in the past few sessions.
At 8:30 a.m. ET Friday, the October employment report is due. That is sure to move Dow futures before the open.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 49.01 million. Covid-19 deaths topped 1.23 million.
Coronavirus cases in the U.S. have hit 9.91 million, with deaths above 240,000.
New coronavirus cases topped 118,000 so far today, already surpassing Wednesday's record. The daily death toll is trending slightly higher, but nowhere near record highs.
Stock Market Rally Thursday
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 28390.51 | +542.85 | +1.95 |
| S&P 500 | (0S&P5) | 3510.41 | +66.97 | +1.94 |
| Nasdaq | (0NDQC ) | 11890.93 | +300.15 | +2.59 |
| Russell 2000 | (IWM) | 164.95 | +4.53 | +2.82 |
| IBD 50 | (FFTY) | 39.35 | +1.07 | +2.80 |
Last Update: 4:24 PM ET 11/5/2020 |
||||
The stock market rally followed up Wednesday's powerful advance on election results with another strong gain.
The Federal Reserve didn't enact any further monetary stimulus for now, but Fed chief Jerome Powell hinted that policymakers are ready to do more as necessary.
The Dow Jones Industrial Average rose 1.95% in stock market trading. The S&P 500 index also climbed 1.95%. The Nasdaq composite jumped 2.6% on higher volume than the prior session. That qualifies as a follow-through day for the tech-heavy index.
Growth stocks fared well. Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 2.8%. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 2.3%, with Salesforce stock and Microsoft major components. The VanEck Vectors Semiconductor ETF (SMH) rose 4%.
Tech Giants In Buy Range
Apple stock rose 3.55% to 119.03, clearing its 50-day line and moving above a trend line. It's offering an early buy signal, but the iPhone maker clearly isn't leading the charge. Microsoft jumped 3.2% to 223.29, closing in on a 225.31 buy point. It's still in range from an early entry Wednesday as it gapped above the 50-day line and broke a downtrend. Amazon popped 2.5%, clearly breaking a downtrend after retaking its 50-day on Wednesday. CRM stock popped 3.8% to 260.22, reclaiming its 50-day line and closing right at a trend-line starting at the left-hand side of the double-bottom base. Investors could start a position today, add to shares as they cross the trend line, and then again finally at the official 270.26 buy point.
Facebook rose 2.5% to 294.68%, still in range from a 285.34 early entry and approaching an all-time high. Google stock, already at a high, edged up nearly 1% to 1,762.50. That's still in range from a 1,726.20 cup-base buy point.
While these megacaps may not be the big leaders of this new stock market rally, investors might consider putting some money in them to order to add relative stability compared to wild highfliers.
Roku, Square Lead Key Earnings
Roku earnings came in at 9 cents a share, defying views for a loss of 40 cents a share. Revenue leapt 73% to $451.7 million, far above estimates. Roku stock rose 3% in volatile overnight trade. Shares ran 4.35% higher on Thursday, extending a big rebound from the 50-day line.
Square earnings rose 36% vs. a year earlier to 34 cents a share, with revenue soaring 140% to $3.03 billion. Analysts expected Square earnings of 16 cents and revenue of $2.07 billion. Square rose 3.7% overnight, near a record high.
Peloton earnings and sales beat views with subscribers up 137%. But the at-home fitness leader said bike deliveries to new customers will face delays into Q2 2021. Peloton stock fell 7% in extended trade after jumping 6.8% on Thursday.
Axon earnings rose 43% to 40 cents a share, defying views for a decline. Revenue climbed 27% to $166.4 million for the maker of Tasers, body cameras and digital evidence storage. Federal law enforcement order bookings skyrocketed 400%. Axon stock rose 7.4% to 116.50, signaling a move above a 113.10 buy point from a high handle or short consolidation next to a longer base.
Cloudflare stock spiked 11% overnight. NET stock is set to clear a short consolidation after finding support at its 21-day exponential moving average at the end of October. Cloudflare earnings were a surprise, while revenue growth topped. Guidance for the current quarter was slightly above views.
Trade Desk earnings per share of $1.27 beat adjusted EPS views by 82 cents. Revenue grew 32% to $216.1 million, easily beating. TTD stock popped 12%, signaling a record high.
T-Mobile earnings came in at $1 a share vs. $1.01 a year earlier. But that was nearly double analysts outlook for T-Mobile earnings of 51 cents. Revenue rose 74% to $19.3 billion, swelled by the Sprint merger. That was well above views. TMUS stock rose 6% to 124.75 overnight, which would be a new high. Investors could treat 123.52 as a buy point.
What You Should Do Now
The stock market rally has now staged three strong advances, with the follow-through days for the Dow Jones, S&P 500 and now the Nasdaq. Leading stocks are breaking out all over the place. This is definitely a time to be stepping up exposure. While it can be difficult to turn your mindset from defensive to offensive, early stages of a new market rally are often when that run's big leaders break out. With the market making big gains, new buys are generally making strong advances, giving investors cushions for the inevitable down day.
That doesn't mean you need to go from all cash or limit exposure to deep into margin in a flash. Let the market rally draw you in.
Work on those watchlists and study your potential targets.
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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