Stock futures shifted lower early Friday, pointing to a soft start to end a shifty week of trading. IBD 50 stock ZoomInfo Technologies jumped in a buy zone on an upgrade. Leaderboard stock Deckers Outdoor sat on a big gain for the week, and just below a buy point. On the Dow Jones today, Microsoft, Home Depot and McDonald’s were among the blue chips closing on buy points.
Dow Jones and S&P 500 futures dipped 0.2% each. Nasdaq 100 futures were also off 0.2% on today’s stock market. Oil prices eased slightly, with West Texas Intermediate futures holding above $72 a barrel. The 10-year Treasury bond yield looked poised to turn positive for a fourth straight week, up 1 basis point to 1.35% in early trade.
Bitcoin eased slightly, holding above $47,800 — up about 7% for the week.
A rebound in China’s markets sent Pinduoduo (PDD), Baidu (BIDU) and JD.com (JD) to the top of the Nasdaq 100 in early trade. Synopsys (SNPS) dived 2.4%, to the bottom of the index, following a downgrade to underperform from Bank Of America.
Investment manager Invesco (IVZ) rallied 5.5%, leading the S&P 500. The Wall Street Journal reported late Thursday that the Atlanta-based operation, which manages $1.5 trillion in assets, was in talks with State Street (STT) regarding a possible merger. State Street shares rose 0.5%.
Diamondback Energy (FANG) popped 4.3%, after announcing late Thursday a $2 billion share buyback initiative.
ZoomInfo Technologies (ZI) topped the IBD 50 list. The stock rose 2.5% on a Barclays upgrade to overweight, from equal weight. The note set a price target at 83, about 22% above Thursday closing level. ZoomInfo is low in a buy range, above a flat base buy point at 67.73. The buy zone runs through 71.11.
Friday’s session is a quadruple witching day, a session in which stock index futures, stock index options, stock options, and single stock futures expire. As the derivative instruments time out, shares must by traded, driving up stock market volumes, often late in the session. These sessions occur four times a year.
Dow Jones Today: Microsoft, McDonald’s, Home Depot Eye Buy Points
Microsoft (MSFT) and American Express (AXP) have logged the best moves on the Dow this week. Microsoft stock booked a 3.2% gain through Thursday, rebound from 50-day support and climbing to just below a three-weeks-tight buy point at 305.94. The stock is an IBD Leaderboard listing.
American Express end Thursday with a 2.5% gain for the week. It is attempting to recover technical support in an eight-week consolidation.
McDonald’s (MCD) has advanced 1.7% since Monday. That moved it to within 2% of a flat base buy point at 247.14. Also a good week for Home Depot (HD), up 1.3% through Thursday and working to retake a 338.65 buy point in a cup-with-handle base.
China Bounces; Europe Slips
China’s markets staged an uneven rebound on Friday, in a week pressured by weak economic data and real estate-sector concerns revolving around property developer China Evergrande Group’s troubled debt. The People’s Bank of China injected $14 billion in short-term cash into the banking system, its largest input of the month, according to Bloomberg.
Hong Kong’s Hang Seng Index rebounded 1%, leaving the index down 4.9% for the week and killing a three-week rally. The Shanghai Composite added 0.2%, taking a 2.4% loss for the week, after hitting its highest levels since August 2015 on Friday and Monday. In Japan, Tokyo’s Nikkei 225 jumped 0.6%, ending the week 0.4% higher, adding a fourth week to its rally and closing just below the record closing high notched on Tuesday.
Among China-based ETFs, the iShares MSCI China ETF (MCHI) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) were unchanged in premarket trade. The KraneShares CSI China Internet ETF (KWEB) jumped 1.9%.
Europe’s markets shed early gains and traded lower near midday. Frankfurt’s DAX dropped 0.3%, London’s FTSE 100 notched a 0.2% decline. Meanwhile, the CAC-40 in Paris slipped 0.3%. The SPDR Portfolio Europe ETF (SPEU) was inactive in early action, heading into Friday with a 0.4% gain for the week, and perched neatly at 50-day support.
Nasdaq, S&P 500, Dow Jones Today: Growth Stocks In Motion
A boost of options expirations trade may nudge the Dow Jones today, as the index starts its sixth session below its 50-day moving average. The week’s back-and-forth action has left the Dow up 0.4% since Monday, but still 0.8% below its 50-day moving average. Even a minor gain for the week would be positive, snapping a two-week pullback. But it won’t mean much, and leaves the index on the verge of potentially deeper losses, until the Dow recovers to above that 50-day line.
The S&P 500 heads into Friday’s session with a 0.3% gain for the week. On a weekly chart, the action shows a modest rebound from a test of 50-day support. A daily chart shows the index see-sawing in sideways action for the past four sessions, holding 50-day support but unable to climb back above its shorter-term 21-day line. No way to tell whether the break will come to the up or downside and, for better or worse, oil price action may be influential in the outcome.
For more detailed analysis of the current stock market and its status, study the Big Picture.
The Nasdaq has climbed for two days, recovering nicely above its 21-day line and carrying a 0.4%, so far, for the week. It is sitting not quite 1.5% off its Sept. 7 high, about the same as the S&P 500. In growth stocks, the iShares Russell 1000 Growth ETFIWF has tracked alongside the Nasdaq, recovering 21-day support in a two-day advance. It ended Thursday up 0.5% for the week.
The Innovator IBD 50 ETF (FFTY) has behaved very differently, capping a three-day advance with a 2% rally on Thursday. That sends the index in Friday with a 2% gain for the week, and back in a buy range above a 50.06 buy point in what IBD MarketSmith analysis charts as a 28-week consolidation. The move shows this growth stock segment attempting, for the past three weeks, to move to new high territory for the first time since February.
Stocks To Watch: Deckers, Mercado Libre, HubSpot, Crocs
Deckers Outdoor (DECK), the parent of Uggs and Teva, bounced 5.8% so far this week. It is still trading just below a 444.58 buy point in a six-week flat base. Deckers was Monday’s IBD 50 Stock To Watch. It joined IBD’s Leaderboard list on Tuesday, as it passed an early aggressive entry at 433.
Argentina-based Mercado Libre (MELI) chalked up a 1.8% advance for the week through Thursday, leaving it not quite 1% below an 1,899.43 entry in a 31-week cup-with-handle base. The IBD Leaderboard stock briefly topped that entry at the start of September.
A strong session on Thursday left HubSpot (HUBS) ahead 4.8% for the week. That lifted shares into a buy range above a three-weeks-tight entry at 679.29. The cloud-based marketing software developer has climbed more than 22% from a June breakout. The current buy zone extends to 713.25.
It’s been a good week for footwear maker Crocs (CROX), which ended Thursday with a 9.5% gain for the week. It is extended beyond a buy range after rebounding from support at its 10-week moving average. The stock surged nearly 15% Tuesday, after the company announced an accelerated share buyback program and guided sales expectations to above $5 billion by 2026. The stock is now up more than 43% from a June breakout, and has two rebounds from 10-week support. It is a good time to lock in some of those profits.
Please follow Alan R. Elliott on Twitter @IBD_Aelliott
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