Dow Jones futures were little changed Monday morning vs. fair value, slashing overnight losses along with S&P 500 futures and Nasdaq futures, as U.S. coronavirus cases rise sharply but deaths continue to slide. Apple helped trigger Friday's reversal, though the coronavirus stock market rally had a strong week.
Biotechs Vertex Pharmaceuticals, Seattle Genetics and Regeneron Pharmaceuticals, along with takeout-heavy Wingstop, all cleared buy points Friday.
Apple holds its Worldwide Developers Conference this coming week. But the Dow Jones tech giant made headlines Friday by saying it's closing some Apple Stores in Arizona, Florida and a few other states due to increasing coronavirus cases. That hit the coronavirus stock market rally somewhat on Friday.
Meanwhile, Elon Musk tweeted that the annual Tesla shareholder meeting will be delayed, while also pushing back a long-promised Battery Day. Tesla also is halting merit pay for workers. A Texas Cybertruck deal may not be imminent either.
On Friday, Apple stock and Tesla stock fell a fraction, both near record highs.
Vertex stock, Seattle Genetics stock, Regeneron stock and Wingstop stock all rose at least 5% on Friday, moving into buy zones.
AAPL stock, TSLA stock and VRTX stock are all on IBD Leaderboard. Vertex stock is on SwingTrader. Vertex and Regeneron are on the IBD 50 stock list and the Big Cap 20.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value, after being down nearly 2% at one point Sunday evening. Today, fair value is unusually negative so even flat DJIA futures on a nominal basis would indicate a Dow Jones open of slightly worse than -0.8%.
S&P 500 futures lost 0.1%. Nasdaq 100 futures were 0.1% above fair value.
DJIA futures have been more volatile in recent days.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Stock Market Update: The Raging Bull's Victory
Coronavirus News
Coronavirus cases worldwide have cleared 9.07 million. They could hit 10 million in another week. Covid-19 deaths have reached 471,000.
Coronavirus cases in the U.S. have topped 2.35 million, with deaths above 122,000. On June 21, new Covid-19 cases jumped by 33,539 in the U.S., the most since May 1. On Saturday, new coronavirus cases topped 33,000 again. U.S. Covid-19 infections were up more than 26,000 on Sunday, making it the heaviest Sunday since May 3.
California, Arizona, Texas, Florida and several other states, especially in the South, are reporting record new coronavirus cases. In many of these cases, the share of positive Covid-19 tests has risen sharply as well.
On the plus side, coronavirus deaths in the U.S. have continued to trend lower, falling to 267 on Sunday. That's the lowest since March 23.
In other coronavirus news, New York City enters phase two of its reopening on Monday. That'll include outdoor dining at restaurants, haircuts and in-store shopping.
Brazil reported a record 55,209 Covid-19 infections on Friday, surging above one million cases. New coronavirus cases rose more than 31,000 on Saturday.
Coronavirus Stock Market Rally
The coronavirus stock market rally delivered solid gains last week, especially growth names. The Apple Stores news and rising coronavirus cases across the Sun Belt sapped a Friday rally, with the Dow Jones Industrial Average and S&P 500 index closing lower and the Nasdaq clinging to a tiny gain.
Still, the Dow Jones rose 1% in last week's stock market trading. The S&P 500 index gained 1.9% and the Nasdaq composite 3.7%. The DJIA hit resistance at its 200-day line several times last week.
Among the best ETFs, the Innovator IBD 50 ETF jumped 6.4%. The iShares Expanded Tech-Software Sector ETF rallied 5% and the VanEck Vectors Semiconductor ETF 3.3%.
Apple WWDC Event
The Apple Worldwide Developers Conference will be held online this year due to coronavirus concerns. Apple is expected to announce updates to its various operating systems, as well as announce a switch to using its own chips in its Mac computers, switching from Intel processors.
On Friday, Apple said it's re-closing 11 stores in Arizona, Florida, North Carolina and South Carolina due to Covid-19 risks as coronavirus cases ramp up there. That shouldn't have a big impact on Apple's revenue. The vast majority of its sales are online, with some of its remaining sales at Best Buy and other channels.
But it does raise concerns about an economic recovery, especially retailers and consumer-facing businesses that rely more on physical locations.
Apple stock dipped 0.6% to 349.72 on Friday, reversing from an record intraday high of 356.56. But AAPL stock did rise 3.2% for the week, outperforming the DJIA and S&P 500, though not the Nasdaq.
Shares rose a fraction early Monday.
The relative strength line for Apple stock stock is at a record high. The RS line tracks a stock's performance vs. the S&P 500 index. It's the blue line in the charts provided.
Tesla Delays Annual Meeting, Battery Day, Merit Pay
Tesla CEO Elon Musk tweeted overnight that annual shareholder meeting and long-awaited Battery Day are tentative scheduled for Sept 15. The Battery Day has been pushed back several times, but never with a date set. The shareholder meeting had been set for July 7. Musk said the meeting was delayed due to coronavirus restrictions, but many other companies have held virtual shareholder meetings in recent months.
Two proxy advisors are urging shareholders to vote against the re-election of Chairwoman Robyn Denholm, in part due to Tesla's high compensation for directors. A Detroit pension fund for firefighters and police last week sued Tesla over its heavy compensation packages for directors. Elon Musk got a $770 million stock bonus just a few weeks ago.
Tesla workers won't be getting bonuses though. News broke late Friday that Tesla is suspending merit pay, citing the coronavirus. The company says it'll provide awards after performance reviews are finished in late July.
The merit pay news could rankle assembly line workers as Tesla tries to ramp up Model Y production and address significant quality issues with finished Y vehicles.
Meanwhile, pro-Tesla site Teslarati reported that Elon Musk is tapping on the brakes on a Cybertruck plant outside of Austin, Texas. Tesla last week reported that was working on a tax incentives deal and an option to buy a parcel of land.
On Sunday, Musk tweeted that the 7-seat Model Y would likely come out "early" in the fourth quarter. Tesla reportedly also is offering one year of free Supercharging for Model 3 cars in inventory.
Tesla stock dipped 0.3% to 1,000.90 on Friday but jumped 7% for the week. TSLA stock is extended from an 869.92 buy point. The RS line for Tesla stock is at a record high.
Shares were slightly lower in premarket trading Monday.
Also of note: The Ford Mustang Mach-E reportedly will let reservation holders finalize orders starting June 26. The Mach-E crossover will be a Tesla Model Y competitor. Federal subsidies should make it cheaper than the Model Y. Mach-E deliveries are set to start in late 2020.
Vertex Stock
Vertex stock jumped 9.2% last week to 293.27, rebounding from its 10-week line after several prior attempts. VRTX stock popped 5% on Friday. Vertex stock now has a flat base on a weekly chart with an official buy point of 295.65, just above the old high. But stripping out that May 18 downside reversal day, aggressive investors could treat the move above 288 as actionable.
The RS line for VRTX stock is rising again after pulling back during the consolidation, following a prior uptrend.
Seattle Genetics Stock
Seattle Genetics stock ran up 12% to 169.91 last week, surging from its 10-week line. On Friday, SGEN stock popped 6.2%, clearing a 168.20 buy point from a flat base, according to MarketSmith analysis.
Regeneron Stock
Regeneron stock leapt 9.4% to 643.92 last week, rebounding from its 10-week line to a record high. Most of that came Friday, as REGN leapt 7.8%. Investors could treat Friday's move as a breakout from an ascending base, even if it doesn't meet all the characteristics.
The RS line for Regeneron stock is at a record high.
The biotech giant is working on coronavirus treatments, giving Regeneron stock a boost.
Wingstop Stock
Wingstop stock surged 12% last week to 131.77 last week, clearing a short consolidation. That includes a 9.2% gain Friday for WING stock. Investors could treat 126.74 or 131.09 as entry points for Wingstop stock. The chicken wings eatery is largely a delivery-and-takeout business so the coronavirus shutdowns had a relatively mild impact.
Coronavirus Stock Market Rally Pause?
The coronavirus stock market rally is trading in a range from its June 10 peak to its June 15 low. Moving sideways for several days or weeks would be normal and healthy. That would offer a chance for leading stocks to set up new bases. Dexcom and Fortinet are two Leaderboard stocks that need another week to form proper bases.
Of course, the coronavirus stock market rally arguably has been "due" for a pullback or pause for weeks, and it hasn't happened.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Diversify Your Coronavirus Market Rally Leaders
Investors should hold a portfolio of a limited number of leading stocks, but you should still seek some diversity within that leadership. In general, you may want a mix of sectors as well as having some high-octane names along with some steadier stocks. In the coronavirus stock market rally should strive for some balance in terms of Covid-19 exposure . If you buy clear coronavirus stocks, you could see a big across-the-board sell-off if fears fade. Meanwhile, if you're stocks are betting on economic recovery, bad news could trigger heavy portfolio losses.
Strong coronavirus plays include Zoom Video, Teladoc Health, Peloton, Netflix and DocuSign. These are companies seeing increased demand due to the Covid-19 crisis, perhaps getting a long-term boost.
Then there are companies that are doing relatively well in the coronavirus crisis, including many software makers (Microsoft, ServiceNow, Adobe), data-center chips (Nvidia, Inphi) and non-coronavirus medicals (Dexcom, VRTX stock). PayPal, Wingstop stock and seemingly Apple stock also are in this group.
Finally, there are growth companies hard-hit by the coronavirus, but are reviving on economic recovery hopes. These include RH, Trade Desk, Lululemon and Tesla. All of these names, including Tesla stock, tumbled at least 50% during the market crash, but have rallied strongly to hit record highs.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
