Dow Jones Futures: Will ‘Let’s Make A Deal’ Trump Fuel 2019 Stock Market Rally?

Dow Jones futures reversed sharply lower Tuesday night, along with S&P 500 futures and Nasdaq futures, as a China manufacturing index signaled contraction for the first time in nearly two years. President Donald Trump invited congressional leaders to the White House, tweeting Sunday “let’s make a deal” over the government shutdown. A stock market rally is underway, but there’s no follow-through yet. But when a confirmed 2019 stock market rally occurs, be ready. Follow the stock market and keep updating watch lists. PayPal stock, Starbucks stock, Amgen stock, Pfizer stock and Intel stock all reclaimed their 50-day lines on New Year’s Eve. PayPal (PYPL), Starbucks (SBUX), Pfizer (PFE), Amgen (AMGN) all have relative strength lines at record or 52-week highs. The RS line for Intel (INTC) is at a six-month best.




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Dow Jones Futures Today

Dow Jones futures fell 0.95% vs. fair value, reversing lower from modest gains earlier. S&P 500 futures slid 0.9%. Nasdaq 100 futures tumbled 1.1%. Asian markets fell sharply as the Caixin China manufacturing index for December fell to 49.7, below the neutral 50 level for the first time since May 2017. Weak China economic data helped push U.S. stock markets to 52-week lows just before Christmas.

Remember that Dow futures and other overnight action don’t necessarily translate in actual trading in the next regular session.

Let’s Make A Deal Trump In 2019?

Trump has invited House and Senate leaders from both parties to discuss border security. He hinted at a government shutdown Congress, tweeting “let’s make a deal” to incoming Democratic House Speaker Nancy Pelosi. There’s no date set for this White House meeting, and unclear what a government shutdown deal would be.

Last Saturday, Trump touted a “very good call” with Chinese President Xi Jinping, with progress toward a “comprehensive” China trade deal. That lifted stocks Monday.

Trump has a history of bellicose rhetoric. But he can abruptly shift into “let’s make a deal” Trump. He knows that ending the government shutdown and China trade war would help a 2019 stock market rally. But there is no China trade deal right now and the government shutdown continues.

2019 Stock Market Rally

The Dow Jones, S&P 500 index and Nasdaq composite have rebounded since Christmas. Stocks were due for a bounce after such heavy selling. But now what? Investors should look for a follow-through day to confirm the 2019 stock market rally, ending the late 2018 stock market correction.

Once a 2019 stock market rally is confirmed, you want to see the major indexes and leading continue to gain ground, especially because the last two confirmed stock market rallies fizzled almost immediately.

Follow The Major Stock Market Indexes And Top Stocks

Pay attention to the major averages and leading stocks. Read the Stock Market Today and The Big Picture to stay in sync with the market.

You’ll find many top stocks in the IBD 50 and other IBD stock lists, as well as in IBD articles. During a stock market correction, IBD serves as a watch list scout. Leaderboard is IBD’s premium service featuring annotated charts of a select group of top stocks in or near buy zones.

PayPal, Starbucks, Intel, Pfizer and Amgen stocks have bullish RS lines. The relative strength line, the blue line in the charts below, tracks a stock’s performance vs. the S&P 500 index.

PayPal stock has a 98 IBD Composite Rating out of a possible 99. Starbucks boasts a 95 Composite Rating. Intel has a 97 CR. Pfizer stock has a 92. Amgen stock scores a good-not-great 84. Starbucks stock is an IBD Leaderboard member. Intel stock and Pfizer stock are Dow Jones components, with Pfizer a top Dow Jones performer in 2018. PayPal stock and Intel are IBD 50 members.

PayPal Stock

The digital payments leader sold off as the stock market correction began, but since its Oct. 11 low PayPal stock has held up reasonably well. Even as the Nasdaq composite and S&P 500 index entered bear market territory, PayPal stock set higher lows. On Monday, shares rose 1% to 84.09, back above their 50-day and 200-day lines.

PayPal stock is consolidating with a 93.80 buy point. It’s hit resistance around 89 several times.

Starbucks Stock

Starbucks stock rose 1.6% to 64.40 on Monday, its fourth straight advance. The buy point is 69.08 in a flat base within a base-on-base formation, both extremely bullish in a stock market correction or bear market.

Starbucks stock blasted out of a long consolidation on Nov. 2 following a strong earnings report. After a short rally, shares reversed lower amid the stock market correction.

Intel Stock

Intel stock is trying to start building the right side of a seven-month consolidation. From the June 4 peak of 57.60, shares hit 42.36 on Oct. 24. Intel stock hasn’t undercut that. It’s rallied for the past four sessions, closing Monday at 46.93.

Pfizer Stock

After a Q3 run-up, Pfizer stock moved sideways in the October-November legs of the stock market correction. Shares cleared a flat base in early December but reversed lower in the bear market tumble. The RS line kept trending higher, though.

Pfizer stock rose in the last four sessions to 43.65, 6% off its high. It doesn’t have a buy point yet, but could in a few weeks.

Amgen Stock

Amgen stock is in a double-bottom base with a 209.09 buy point above the middle of the “W.” The biotech giant nearly hit a high on Nov. 30, but tumbled with the stock market correction in December. Still the RS line for Amgen stock kept rising. Amgen stock is on a four-day win streak, reclaiming its 200-day line on Dec. 27 and its 50-day on Dec. 31. Shares closed Monday at 194.67.

Amgen earnings are only expected to rise 2% in 2019.

Headline-Driven 2019 Stock Market Rally

Expect headlines to still drive the stock market in 2019. (Dow Jones futures may be especially susceptible). So stay engaged and be nimble.

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