Dow Jones Futures: Microsoft, Buffett’s Berkshire Hathaway, Cisco, CSX, Centene Stock Near Buy Points

Dow Jones futures fell modestly late Wednesday, along with S&P 500 futures and Nasdaq futures, after the major averages boomed in Wednesday’s stock market on dovish comments from Fed Chairman Jerome Powell. Microsoft (MSFT), Warren Buffett-led Berkshire Hathaway (BRKB), Cisco Systems (CSCO), CSX (CSX) and Centene (CNC) all reclaimed 50-day lines Wednesday as they close on buy points. Microsoft stock, Berkshire stock, Cisco stock, CSX stock and Centene stock also share two other bullish traits.

All five stocks boast accelerating earnings growth, faster sales growth, or both. Microsoft stock and the others listed here also have a relative strength line, which tracks a stock’s performance vs. the S&P 500 index, at or near record or long-term highs.

Health insurer Centene stock and rail operator CSX stock both boast best-possible IBD Composite Ratings of 99. Microsoft stock has a very good 93 Composite Rating with Warren Buffett’s Berkshire at 92. Cisco stock has an OK 83 Composite Rating.

Dow Jones Futures Today

Dow Jones futures fell 0.2% vs. fair value, taking a breather after Wednesday’s big market rally. S&P 500 futures dipped 0.25%. Nasdaq 100 futures lost 0.2%. Remember that Dow futures and other overnight action don’t necessarily translate into actual trading in the next regular stock market session.

Stock Market Rally Builds Momentum

Fed Chairman Powell said Wednesday that interest rates are “just below” neutral, suggesting fewer Fed rate hikes in 2019. The major averages, up modestly before Powell’s midday speech, skyrocketed. The Dow Jones rose 2.5%, reclaiming its 200-day line. The S&P 500 index popped 2.3% and the Nasdaq composite about 3%.

As an investor, you shouldn’t try to guess where the stock market is going. Pay attention to what the major averages and leading stocks are doing right now. The key indexes are looking better than last week. Some top stocks are breaking out and others, like IBD Stock of the Day Microsoft, are setting up.

Read IBD’s Stock Market Today columns throughout the market day, and the end-of-day The Big Picture to stay in sync with the stock market. This is an important day to read The Big Picture.

Microsoft Stock

Microsoft stock rose 3.7% to 111.12 in above-average volume. Shares are closing on a 112.34 double-bottom base, according to Marketsmith analysis.

Microsoft’s RS line, which hit a new high Wednesday, barely fell in the stock market correction, holding up much better than Apple (AAPL) and the FANG stocks. (Microsoft stock briefly passed Apple stock in terms of market cap Wednesday, but the iPhone maker closed with a slightly higher valuation.)

Microsoft earnings rose 36% in the fiscal first quarter, the fastest growth in five quarters. Revenue grew 19%, with gains accelerating for a third straight quarter. The Dow Jones component has revived its fortunes by shifting to cloud-computing services, becoming a growing rival to still-much-larger Amazon Web Services.

Berkshire Stock

Run by billionaire investor Warren Buffett, Berkshire Hathaway gained 2.4% to 217.64. Berkshire is working on a 223.62 cup-with-handle buy point. The RS line, though just below a recent RS line, is higher than it was on Oct. 9, when Berkshire stock hit a record high.

Berkshire earnings shot up 99% in Q3, the third quarter in a row of faster growth. While Warren Buffett has broken ground by buying Apple stock in bulk in recent years, Q3’s outperformance reflected strong insurance results.

Cisco Stock

A fellow Dow Jones component like Microsoft (and Apple), Cisco stock climbed 2.5% to 47.29. Shares have rallied for three straight days from their 200-day line, an area of support for the networking giant this month. Cisco stock is near a 48.54 cup-with-handle entry.

Cisco earnings climbed 23% in Q3, the third straight quarter of faster growth. Revenue gains have slowly picked up four straight quarters, to 8% in Q3. Cisco is shifting from stagnant hardware sales into faster-growing areas such as security and software.

CSX Stock

CSX stock rose 3.3% to 72.75. You could view the buy point as 73.71, from a handle, or 76.34, just above the left side of the consolidation.

CSX earnings growth has ramped up for four straight quarters, to 106% in Q3, as the rail operator’s drive to improve operational efficiency bears fruit. Revenue growth has accelerated for three straight quarters.

As with Berkshire stock, CSX’s RS line is just below its recent high but above where it was when the stock peaked in late August.

Centene Stock

Centene stock rose 3.5% to 140.86. The Medicaid and ObamaCare health insurer has a conventional entry point of 148.34.

Centene earnings growth picked up last quarter to 33%. Revenue growth has stepped up for three straight quarters.


The Big Picture: Stocks Send Intriguing Signal

Fed Chairman Powell Sees Interest Rates ‘Just Below’ Neutral; Dow Jones Soars

IBD 50 Stock Signals Breakout After Strong Earnings

Not Every Stock Market Follow-Through Succeeds

Warren Buffett’s Berkshire Hathaway Just Bought, Sold These Shares

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Originally posted 2019-09-19 23:26:38.


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