Stock Futures Edge Up; Nike, Goldman Sachs Stocks Divide Dow Jones Industrials

Stock futures set up for modest early gains Friday as the market looked to move back to positive ground for the week, and wrap up a startlingly powerful June performance.




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Dow Jones industrial futures gained 0.4%. S&P 500 futures and Nasdaq 100 futures rose 0.2% above fair value. (For updates on this story and other market coverage, visit the Stock Market Today.)

Bank stocks were strong early leaders Friday, after the Federal Reserve affirmed all 18 top banks cleared stress test accounting reviews, freeing the banks to return dividends to shareholders. Goldman Sachs (GS) and JPMorgan (JPM) easily led the Dow and traded near the top of the S&P 500, along with Bank of America (BAC), Wells Fargo (WFC) and Raymond James (RJF).

Progress Software (PRGS) spiked on a strong Q2 earnings report. Constellation Brands (STZ) led the S&P 500 following its first-quarter report. Nike (NKE) traded moderately lower after reporting its first earnings miss in seven years. Apple (AAPL) shares fell after the company lost a key executive.

Chipmaker Micron Technology (MU) jumped to the head of the Nasdaq 100. Biogen (BIIB) posted the index’s worst decline following an analyst downgrade.

IPOs were generally quiet, with Beyond Meat (BYND), Qudian (QD) and Twilio (TWLO) tapping out narrow gains. Adaptive Biotechnologies (ADPT) jumped more than 3%, following a 100% leap in its first day of trade on Thursday.

Trump, Xi: ‘We’ll See What Happens’

The Group of 20 gathering is underway in Osaka Japan, with President Donald Trump working through meetings with Russian President Vladimir Putin, President Jair Bolsonaro of Brazil and others. Trump is scheduled to meet with Chinese President Xi Jinping Saturday morning.

Trump voiced optimism regarding the meeting and said he expected it to be productive. He denied that he had sealed the meeting with promises not to raise any further tariffs. “At a minimum, it will be productive,” Trump said of what is potentially the most impactful moment of the year for the stock market.  “We’ll see what happens and what comes out of it.”

Goldman, JPMorgan Pace Dow Jones Industrials

Goldman Sachs and JPMorgan clawed out early gains of more than 2%, buttressing the Dow Jones industrials. The Fed’s stress tests are designed to assure that the 18 top banks doing business in the U.S. have sufficient capital reserves to weather significant economic shocks. All banks received passing grades, although the Fed required Credit Suisse to correct weakness in how it was recording potential losses before it would be permitted to issue dividends or buy back shares.

Goldman and JPMorgan stock are both in potential base patterns. IBD MarketSmith chart analysis places a buy point for Goldman Sachs at 210.07, and for JPMorgan at 117.26. Both stock traded blow those levels in premarket action.

Nike: China Momentum; Apple Loses Ives

Nike and Apple lagged among Dow Jones industrials stocks, trading down 0.4% and 0.7%, respectively, early Friday.

The Nike reported late Thursday its earnings fell more than expected in its fiscal fourth quarter, although revenue rose a better-than-expected 4% and management said they continued to see “strong momentum” in China. Nike shares are trading just below a double-bottom base buy point at 85.62.

Apple slumped  on news that Jony Ive, who has led Apple’s design team since 1996, is leaving to form an independent company. Ive, who is widely credited for Apple’s signature distinctive, elegant designs, said he’ll count Apple as a core client. Apple ended Thursday’s session almost 8% below a 215.41 buy point in a cup-with-handle base.

Dow Jones: Strongest June Since ’38, Q2 Less Impressive

A market sell-off in May carved back the stock market’s gains for the second quarter. The Dow Jones industrials were set to take a 2.3% gain for the quarter. The S&P 500 was up 3.2%. The Nasdaq gained 3%.

But for June, the Dow Jones Industrial Average and the Nasdaq were each up 6.9% at the end of Thursday’s session. That sets up the Dow for its best June since 1938, when the index logged a blowout 24.3% rally.  The S&P 500 held a powerful 6.3% advance.

The S&P 500 leaped over its 5.5% advance from June 1999, but it still trails its strongest June on record — an 8.2% rally in 1955. The Nasdaq is looking at its most potent June since 2000, when the index bounced 16.6% as a volatile market swerved through the dot-com crash.

The rebound is based on a mix of expectations: speculation regarding a Federal Reserve rate cut, and hopes for some sort of progress in this weekend’s China trade war meeting between president’s Trump and Xi in Osaka.

The current stock market uptrend remains in force, and positive developments on either front provide the impetus to launch the Dow Jones industrials past the October trade-war high that has acted as a cap on its progress. A disappointing outcome this weekend meeting could send markets sharply lower on Monday.

For more detailed analysis of the current stock market uptrend, study the Big Picture.

Bitcoin Surges 39% In June

Bitcoin hovered near the $11,800 level, down 1% over the past 24 hours and hanging just below Thursday’s $12,080 high. The cryptocurrency is up 38.6% since the start of June, boosted by news of Facebook’s (FB) Libra cryptocurrency. Since the start of the year, Bitcoin has climbed 220%.

Oil Prices Edge Up Ahead Of OPEC

Oil prices held flat as markets positioned ahead of the Organization of Petroleum Exporting Countries meeting on Monday and Tuesday. West Texas Intermediate moved a fraction higher, to $59.48 a barrel, early Friday. WTI is up about 3.6% for the week, with an 11% gain since the start of June. It is still almost 23% below its October high.

OPEC oil ministers have signaled a probable roll-over of the current, reduced production caps. Iraqi Oil Minister Thamer Ghadhban in London Thursday said the group may consider an even lower output quota, a decisions likely to assert more upward pressure on oil prices. Iraq is OPEC’s second-largest producer, behind Saudi Arabia.

Europe’s Brent crude benchmark rose 0.1% to $66.60 early Friday. Oil prices could see some impact from BakerHughes’ (BHGE) weekly rig count survey, due out at 1 p.m.

Find Alan R. Elliott on Twitter@IBD_Aelliott

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Originally posted 2019-06-28 14:00:50.

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