Dow Jones futures rose modestly early Monday, along with S&P 500 futures and Nasdaq futures. The stock market rally continues to do well, with leading stocks leading. Many of those leaders are big-cap techs. Apple stock, Tesla stock, Facebook stock, Google stock and Salesforce stock are all easily beating the major indexes so far in 2020.
Apple (AAPL), Tesla (TSLA) and FANG stocks Facebook (FB) and Google-parent Alphabet (GOOGL) have been leading the stock market rally for several months. Salesforce.com (CRM) has not, but CRM stock has been a big winner in the new year.
Apple stock is a member of the Dow Jones industrial average, S&P 500 index and Nasdaq composite, so its performance has clearly fueled the major indexes. Facebook stock and Google stock are big weights in the S&P 500 and Nasdaq. NYSE-listed Salesforce stock is a notable S&P 500 stock. Tesla stock is a Nasdaq 100 member.
Facebook stock and Google stock boast best-possible IBD Composite Ratings of 99. Salesforce stock has a 98 Composite Rating. Apple stock has a 95 CR. Tesla stock is at a good-not-great 81, but bulls are betting on huge earnings in the coming years.
Meanwhile, Woodward (WWD) will merge with Hexcel (HXL) in a $6.4 billion deal to create a bigger aerospace and defense supplier. The all-stock deal values Hexcel stock at $76.23 a share, a 4.5% premium to Friday's close.
Lululemon Athletica (LULU) raised estimates for its current holiday quarter. Lululemon stock may reclaim a 235.60 buy point from a tight pattern.
The coming week may belong to medicals, as dozens of drug makers, biotechs and medical products firm will be presenting at the J.P. Morgan Healthcare Conference in San Francisco. Bristol-Myers (BMY), Novartis (NVS), Illumina (ILMN), Vertex Pharmaceuticals (VRTX), Dexcom (DXCM), Edwards Lifesciences (EW), Incyte (INCY), Progyny (PGNY), Biogen (BIIB) and Humana (HUM) are just some of the notable names on Monday alone.
Several biotechs have announced new deals or preliminary figures overnight.
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Dow Jones futures rose 0.3% vs. fair value, along with S&P 500 futures. Nasdaq 100 futures climbed 0.4%. Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
The U.S. and China have agreed to hold semiannual talks to promote reforms and resolve disputes, according to multiple reports. The talks will be announced with the Jan. 15 signing of the phase one China trade deal. But the talks reportedly will be separate from phase two China trade deal negotiations.
Iran admitted that its air defenses fired on a Ukrainian Airlines flight last week, killing all 176 on board the Boeing 737-800. Local authorities initially blamed an engine failure. The admission is good news for Boeing (BA) and engine maker CFM, a joint venture of General Electric (GE) and France's Safram. Boeing stock and GE stock rose a fraction.
The current stock market rally is in great shape, even with Friday's modest reversal lower. The Dow Jones Industrial Average rose 0.7% last week while the S&P 500 index climbed 0.9%. The Nasdaq composite jumped 1.75%.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) jumped 2.2% and the iShares Expanded Tech-Software Sector ETF (IGV) surged 3.3%. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.5%.
The Dow Jones today is just 2.7% above its 50-day moving average, as Boeing (BA) and Walgreens Boots Alliance (WBA) have been among the laggard blue chips. The S&P 500 index is 3.6% above its 50-day line while the Nasdaq composite is up 5.5%. That's after reversing lower from record highs Friday. A modest pullback or sideways action could be helpful, letting the stock market rally pause. Leading stocks could finish bases or handles without losing ground to the broader market.
The Dow Jones industrial average entered 2020 with many expecting a stock market rally pause or pullback. But so far the Dow Jones is up 1%, the S&P 500 index 1.1% and the Nasdaq composite. The Nasdaq 100, which includes the 100 biggest non-financial Nasdaq-listed firms, has advanced 2.7%.
Meanwhile, Apple stock has surged 5.7% in 2020 after soaring 89% last year, nearly tripling the S&P 500's 29% gain. Apple stock is a trendy "5G" play, with 5G iPhones expected this year. Analysts see decent profit growth in the next two years after a fractional decline in 2019.
Facebook stock has rallied 6.2% this year, briefly hitting an all-time on Friday, after a 54% advance in 2019. Google stock has climbed 6.7% in the new year. GOOGL stock rose 28% in 2019, slightly underperforming the S&P 500 index. But nearly all of Google stock's gains came after early June. Facebook and Google earnings growth is expected to accelerate in 2020, while regulatory and political fears have receded somewhat.
CRM stock has leapt 10.8% in 2020, surging above a long consolidation. However, after basing for much of last year, the Salesforce stock gain of 19% underperformed the broader 2019 stock market rally.
Tesla stock leads this group in 2020 with a 14.3% gain so far. Tesla stock rose 26% in 2019, slightly underperforming the S&P 500 index. But shares erupted for a 136% gain from their June 3 low to the end of the year.
Facebook stock and Google stock are arguably just in range of tight patterns, while CRM stock is modestly extended from its base. Apple stock and Tesla stock are significantly extended.
Tesla stock jumped early Monday on an analyst price target hike to 612 from 385. Also China signaled it would not significantly cut electric vehicle subsidies this year.
Meanwhile, among some other notable big-cap techs, Microsoft (MSFT) is up 2.3% in 2020, matching the Nasdaq's performance after a strong 2019. Amazon.com (AMZN) and Netflix (NFLX) have risen 1.9% and 1.7%, respectively, as they try to regain lost ground.
Have a successful day!