Dow Jones futures and S&P 500 futures rose Friday morning, while Nasdaq futures turned lower as the 10-year Treasury yield rebounded. The stock market rally had a wild session Thursday with the major indexes undercutting more support levels before rebounding to close higher.
The Federal Reserve said big financial firms such as JPMorgan Chase and Bank of America can start buybacks and dividend hikes on June 30, assuming they pass the latest round of stress tests. Previously, the Fed had said those higher shareholder returns could start in the first quarter. But JPM stock and BofA were slightly higher early Friday.
Investors should be looking for stocks that are holding up well in the current market, with strong fundamentals or at least strong earnings outlooks. This stock market rally is about as much fun as a spinal tap, so here are 11 stocks for your watchlists: ASML, General Motors, Facebook, Scotts Miracle-Gro, Ubiquiti, Disney, Target, Lowe's, Mosaic, Deere and ArcelorMittal.
GM stock and ArcelorMittal are on IBD Leaderboard. Deere stock, ASML and Scotts-Miracle-Gro are on IBD 50. ASML stock is on the watchlist for IBD Long-Term Leaders. Deere stock is on the IBD Big Cap 20. Lowe's stock was the IBD Stock Of The Day.
Nio Production Halt
Nio said Friday that it would suspend factory production for five days starting March 29, citing the chip shortage that is plaguing the auto industry. It now expects to deliver 19,500 vehicles in the first quarter, down from its prior target of 20,000-20,500. Tesla this week raised made-in-China Model Y prices, with speculation that chip shortages or other production issue was limiting supply.
In early trading, Nio stock tumbled while Tesla tilted lower.
Tesla is likely to release global production and deliveries for the first quarter late next week. Nio will likely report March deliveries late next week as well.
Dow Jones Futures Today
Dow Jones futures rose 0.5% vs. fair value. S&P 500 futures advanced 0.2%. Nasdaq 100 futures fell 0.6%, reversing modest gains.
The 10-year Treasury yield rose to 1.67% after pulling back over several sessions from pandemic highs.
Crude oil futures rose on concerns that that the Suez Canal will remain blocked for weeks.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.
Coronavirus News
Coronavirus cases worldwide reached 126.20 million. Covid-19 deaths topped 2.76 million.
Coronavirus cases in the U.S. have hit 30.77 million, with deaths above 559,000.
Stock Market Rally
The stock market rally had a wild session, falling sharply intraday before rebounding higher.
The Dow Jones Industrial Average rose 0.6% in Thursday's stock market trading. The S&P 500 index climbed 0.5%. The Nasdaq composite edged up 0.1%. Intraday, the Nasdaq tumbled 1.35% after skidding 2% on Wednesday. The Russell 2000, down hard intraday, jumped 2.2%
Among the best ETFs, the Innovator IBD 50 ETF rose 1.3% and the Innovator IBD Breakout Opportunities ETF climbed 0.65% after two big losses for the growth ETFs. The iShares Expanded Tech-Software Sector ETF dipped 0.4%. The VanEck Vectors Semiconductor ETF edged up 0.3%. SMH includes ASML stock and many other chip-gear makers that have held up relatively well.
SPDR S&P Metals & Mining ETF popped 2.2% and Global X U.S. Infrastructure Development ETF 2.1%. U.S. Global Jets ETF ascended 2.5% after several losses.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 0.3% and ARK Genomics ETF edged up 0.3%.
Stock Of The Day In Buy Zone As Renovations Boom
Facebook Stock, ASML, GM Are Stocks To Watch
So why consider ASML stock, GM, Facebook, SMG, Ubiquiti, Disney, Target, Lowe's, Mosaic, Deere and ArcelorMittal for your watchlist? They are holding up reasonably well, with strong or at least improving relative strength lines. Many are showing rebounding profits with solid growth prospects ahead.
Ubiquiti stock and SMG are forming nice-looking bases, especially impressive given the choppy market conditions. A couple of these stocks are technically in buy zones, including ArcelorMittal, Lowe's and Disney stock. A few others might be seen as "actionable" in a better market, such as Facebook stock, GM or ASML. But it's not a good market. Recent breakouts continue to struggle or break down while former growth leaders are heading back toward their March lows or beyond.
But these are all worth watching, and offer a window into a variety of positive sectors. It's not clear which stocks or sectors will lead the next strong stock market rally, so you want to cast a wide net. Definitely consider many rivals and peers to the 11 stocks above, as well as from other sectors. Homebuilders, oil producers and financials — including JPMorgan and BAC stock — also are worth looking at.
Catch The Next Big Winning Stock With MarketSmith
Market Rally Analysis
The stock market rally moved to "uptrend under pressure" on Wednesday and Thursday's volatile action didn't change that. Intraday, the Dow Jones undercut its 21-day exponential moving average while the S&P 500 fell below its 50-day average and the Russell 2000 nearly undercut its March lows. It's positive that they rebounded to move higher from sharp intraday losses, with the S&P 500 moving back above its 21-day line.
At least market conditions didn't get worse. But they're not materially better.
The Nasdaq composite has some work to do to get above its 21-day line. The tech-heavy index won't look really healthy until it's back above its 50-day line and its March 16 short-term high. The Dow Jones and S&P 500 need to keep holding key levels.
Most importantly, recent breakouts have not been working. Many stock charts look damaged and need weeks, perhaps months to repair. Sure, it's nice that MT stock held in a buy zone Thursday, but plenty of stocks have resisted selling until they didn't resist.
If you have a couple of pilot positions or long-term winners, that's OK. But investors should largely be in cash and shouldn't be thinking about new buys.
Perhaps Thursday's intraday lows mark the start of a bold new bullish era. But this could be a brief respite before the major indexes plunge below recent lows. If a renewed stock market rally has legs, there will plenty of opportunities to jump in.
As IBD founder Bill O'Neil famously said, all stocks are bad unless they go up. There haven't been many good stocks lately.
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