Dow Jones Futures: Stock Market Rally Faces Key Test; Cisco Earnings Strong

Dow Jones futures were little changed late Wednesday, along with S&P 500 futures and Nasdaq futures, as Cisco stock rallied late on earnings. A stock market rally attempt is underway on more-positive trade headlines, but the major averages face a test at the 50-day line. Meanwhile, Facebook (FB), (AMZN) and especially Mastercard stock rebounded bullishly from their 50-day or 10-week lines. Beyond Meat stock cleared an IPO base, while Zscaler (ZS) reclaimed a buy point.


Cisco Systems (CSCO) has a so-so 81 IBD Composite Rating out of a best-possible 99, though earnings growth has improved in recent quarters. Beyond Meat (BYND) is a money-losing IPO and has a 72 Composite Rating. Meanwhile, Facebook stock, Amazon stock, Zscaler (ZS) and Mastercard (MA) all have 98 Composite Ratings.

Mastercard stock and Zscaler stock are both on IBD Leaderboard.

Dow Jones Futures Today

Dow Jones futures and S&P 500 futures were essentially flat. Nasdaq 100 futures were 0.1% higher. Cisco stock is a member of the Dow Jones, S&P 500 and Nasdaq composite. Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Current Stock Market Rally

The current stock market rally attempt continued for a second day. Early losses on weak U.S. and Chinese economic data turned to gains on a report that President Donald Trump will delay new global auto tariffs for six months. The Dow Jones rose 0.45% in Wednesday’s stock market, holding above its 200-day line. The S&P 500 index advanced 0.6% and the Nasdaq composite 1.1%, but still below their 50-day moving averages.

Clearing the 50-day line will be a key test for a nascent rally attempt. If that happens, investors should look for a follow-through day to confirm the new rally. Until then, it’s still just a rally attempt in a stock market correction.

The stock market continues to move on news regarding the China trade war and other Trump tariff fights. In such an environment, the stock market can abruptly rise or fall with the latest headline or Trump tweet.

Among the best ETFs, Innovator IBD 50 (FFTY) rose 1%, back above its 50-day. The iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) each advanced 0.9%.

Cisco Earnings

Cisco earnings per share rose 18% to 78 cents, while sales grew 6% to $13 billion. Analysts expected Cisco earnings of 77 cents on sales of $12.89 billion for fiscal Q3. The Cisco revenue outlook for the current Q4 is slightly higher than views.

Cisco stock rose 2.9% late, signaling a move toward its 50-day line. Shares inched up 0.8% to 52.44 Wednesday. Cisco stock is trying to end a pullback since hitting an 18-year high of 57.52 on April 16.

Cisco earnings and guidance suggest strength in corporate IT spending.

Facebook, Amazon Stock Find Support

Facebook stock rose 3.1% to 186.27 on Wednesday. Amazon stock advanced 1.7% to 1,871.15. Both rebounded from their 50-day lines, with work on handles from cup bases going back several months. Amazon stock has a 1,964.50 buy point. Facebook stock is targeting 198.58.

Beyond Meat Stock Breaks Out

Beyond Meat shot up 9.1% to 86.92, hitting a record high and clearing an 85.55 buy point from a short IPO base. Tim Hortons has started testing Beyond Meat vegan sausages at breakfast.

Zscaler Stock Reclaims Entry

The cybersecurity stock rose 4.1% to 75.02, hitting an all-time high and reclaiming a 73.04 entry first cleared last Friday

Mastercard Stock In Buy Area

Mastercard stock rose 1.3% to 249.15, bouncing from its 10-week moving average. It’s the first test of the 10-week line in several months, making it a buying opportunity. The relative strength line for Mastercard stock is already at a record high, reflecting outperformance for the S&P 500 index.

Mastercard archrival Visa (V) is showing similar bullish traits. It was Tuesday’s IBD Stock Of The Day.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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