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Apple, Palo Alto Neworks, Merck, Loxo Oncology

Dow Jones futures rose modestly Sunday night, along with S&P 500 futures and Nasdaq futures, as weekend U.S.-China trade talks ended with little progress. Apple (AAPL) holds its Worldwide Developers Conference starting Monday, an event that hasn’t always been positive for the stock. Palo Alto Neworks (PANW), HealthEquity (HQY), and Coupa Software (COUP) report quarterly earnings Monday. Meanwhile, Merck (MRK) and Loxo Oncology (LOXO) reported positive cancer drug data at the annual ASCO meeting.

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The Nasdaq composite ended last week at multi-month highs, clearing a recent sideways trend. The Dow Jones and S&P 500, which tested their 50-day lines last week, remain in their range.

Apple, which is the world’s most valuable company, is the top component of the Dow Jones, S&P 500 index and Nasdaq composite. Apple is slightly extended from a recent breakout, as is Coupa Software. Palo Alto Networks, HealthEquity and Loxo Oncology are well extended. All five have relative strength lines, which tracks a stock’s performance vs. the S&P 500 index, at or near record high. Merck is trying to bounce back from a two-year low.

Dow Jones Futures Today

Dow Jones futures advanced 0.2% vs. fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures were 0.3% above fair value.

Trump Trade War Winds Blow

Commerce Secretary Wilbur Ross concluded two days of trade talks in Beijing on Sunday with little progress. China warned the U.S. that it won’t buy more U.S. goods, as it had tentatively agreed to do last month, until President Donald Trump commits to not imposing new tariffs on Chinese goods.  The Trump administration surprised Chinese officials by continuing to move forward on plans to slap tariffs on $50 billion in Chinese products, mostly tech and telecom gear. China has warned it’ll retaliate dollar for dollar.

Last week the Trump administration imposed steel and aluminum tariffs on the European Union, Canada and Mexico, which quickly announced retaliatory duties on U.S. goods.

Apple WWDC

Apple should unveil augmented reality software as well as new operating systems for mobile and Macs. Some analysts think Apple could tout a low-end phone or a cheaper HomePod smart speaker.

Apple rose to 190.14 on Friday, back just beyond the 5% chase zone from a 179.04 buy point. Apple stock also has formed a three-weeks-tight pattern. If the stock moves to 190.47, existing holders could choose to add more shares.

Apple stock hasn’t fared that well during WWDC weeks. During Apple WWDC 2015, shares fell 1.15%. Apple stock fell 3.5% in WWDC 2016 and 4.2% in WWDC 2017.

Palo Alto Networks

Late Friday, the cybersecurity company reported fiscal third-quarter revenue rose 31% to $567.1 million, with billings climbing 33% to $721 million. Analysts had expected revenue of $545.7 million.

Palo Alto Networks also named Nikesh Arora as its new CEO and chairman, effective June 6. He succeeds Mark McLaughlin, who will be vice chairman.

Palo Alto Networks stock rose 1% late Friday on those headlines.

The company now will release third-quarter results before the stock market opens Monday. It had previously planned to report after the close.

Analysts expect earnings per share to rise 57% to 96 cents, though the better-than-expected revenue suggests that Palo Alto will top EPS views. The company has topped views by at least 6 cents in each of the last four quarters.

Shares are well extended from a breakout earlier this year.

HealthEquity

The nation’s second-largest health savings account custodian announces Q1 earnings late Monday. Analysts expect a 25% revenue rise to $69 million with EPS up 16% to 22 cents.

HealthEquity stock is modestly extended from a base-on-base formation cleared in early May.

Coupa Software

Coupa’s cloud-based software helps businesses control their spending. Analysts expect the per-share loss to widen to 11 cents vs. 9 cents a year earlier. Revenue should climb 24% to $51 million.

Shares closed Friday at 54.07, slightly extended from a 50.79 buy point. Coupa stock is in a mini-consolidation for about three weeks.

Merck, Loxo Oncology At ASCO

Dow Jones drug giant Merck and biotech Loxo Oncology are among the many companies presenting trial data at the American Society of Clinical Oncology annual meeting in Chicago.

Merck released data showing its immuno-oncology drug Keytruda helps patients with advanced lung cancer live longer than with chemotherapy. Keytruda has stood out vs. Bristol-Myers Squibb (BMY) drug Opdivo as well as other rivals’ treatments.

Loxo Oncology said its experimental cancer drug shrank tumors in 77% of patients with a specific genetic mutation.

Merck shares have rebounded from a two-year low in early April, but are still well off 52-week highs. Loxo Oncology is well extended from a breakout earlier this year.

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