Dow Jones Up Mildly; Will Alphabet Beat Apple In 2019?

Alphabet (GOOGL) outperformed most big-cap techs in stocks today, gaining nearly 0.7% and beating small gains of roughly 0.3% by the major benchmarks. Volume was running slightly higher on the Nasdaq, a touch lower on the NYSE vs. the same time on Tuesday afternoon.




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Meanwhile, Apple (AAPL) continued to trade quietly after a decent rebound from its early-January low of 142.

At 170, Apple remains 26% below an all-time peak of 233.47.

The stock is still in the early stages of producing a new base. Wall Street has punished the company following a sharp downward revision in its top-line guidance.

In the December-ended fiscal first quarter, the iPhone giant’s sales sank 5% to $84.3 billion. Profits are now seen slipping 4% to $11.40 a share in FY 2019, ending in September.

The IBD Ratings For The Global Search Engine

Meanwhile, Alphabet is showing higher IBD ratings, including a decent but not great 74 Relative Strength Rating. IBD Stock Checkup also gives Alphabet a sterling 99 Composite Rating on a scale of 1 (wretched) to 99 (wondrous).

The Street sees the Google search engine owner’s earnings rising 4% to $46.97 a share this year, then accelerating 16% to $54.72 a share in 2019.

Alphabet has been investing heavily in new ventures, including self-driving technology and digital personal assistants for the home.

The stock has recently retaken its 200-day moving average, a sign of strength. But like Apple, it too is still trying to carve out the right side of a potential new base. Shares trade 12% below a 52-week peak of 1,291.

Outside The Dow Jones: China Shares Rising Again

Some Chinese recent IPOs are gaining more traction.

ZTO Express (ZTO), a leading delivery firm, ramped higher for a fourth day in a row and the eighth time in nine sessions. Shares surged more than 2% to 19.31 in volume running triple the normal pace.

ZTO has been forming a large deep base, correcting 35% from the base’s high to low. That’s slightly above the maximum 33% decline you’d like to see in a good base such as a well-formed cup with handle.

Analysts surveyed by Thomson Reuters see fourth-quarter profit dropping 15% to 23 cents a share. But ZTO is also slated to grow full-year earnings 19% to 81 cents a share in 2018 and another 19% in 2019.

Tencent Music Entertainment (TME), which can whipsaw sharply despite being a large cap with a $26 billion market valuation, reversed mildly lower after hitting a new all-time high of 16.29.

At that session high, TME has now rallied as much as 13.7% after clearing an early buy point in its narrow IPO base.

Tencent Music Stock Action

See a detailed annotation of its daily and weekly charts on Leaderboard, in which Tencent Music was briefly a member of the Leaders list.

Meanwhile, bullishness in the stock market remains well below levels that would suggest overheating among investors.

The weekly Investors Intelligence survey found 49.5% of market newsletter writers bullish as of Tuesday, up for a sixth straight week. But that’s still down from 61.8% seen at the start of October.

See both the trends in bullishness and bearishness in this important Wall Street poll at IBD’s Psychological Market Indicators section.

In Other Financial Markets

Crude oil continued to rally. West Texas intermediate near-term futures jumped 2% to $54.18 a barrel.

Oil is now up 19.4% year to date, following a sharp drop in the fourth quarter of 2018. Crude futures plunged from $76 to $42 over that time frame.

The yield on the benchmark U.S. Treasury 10-year bond edged up to 2.70%.

Please follow David Saito-Chung on Twitter at @IBD_DChung for more on financial markets.

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