Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures, as Google stock, Microsoft (MSFT), Boeing (BA) and Advanced Micro Devices (AMD) headlined key earnings overnight.
Microsoft, Google, AMD, Pinterest, Visa and Starbucks all beat profit views. Google stock and AMD rose solidly late. Visa stock, which is in a buy zone, climbed modestly late. Microsoft retreated while PINS stock sold off. SBUX stock edged lower.
Biden, Fed, More Earnings Wednesday
Boeing (BA) reported a wider-than-expected first-quarter loss. SHOP stock rose while Spotify tumbled. Boeing stock edged lower.
The Federal Reserve policy announcement comes Wednesday afternoon, though it’s likely to be a nonevent. Finally, President Joe Biden will unveil his tax-and-spending plans in his prime-time address before Congress.
Google stock and Microsoft are on IBD Leaderboard. MSFT stock is on IBD Long-Term Leaders.
Microsoft, Boeing, Apple and Visa stock are on the Dow Jones Industrial Average.
Dow Jones Futures Today
Dow Jones futures fell 0.25% vs. fair value. Visa stock offered a slim boost to blue chips with Boeing and Microsoft weighing on Dow futures. S&P 500 futures were just above break-even and Nasdaq 100 futures declined 0.15%.
The 10-year Treasury yield edged up to 1.64% after Tuesday’s 5 basis point rise to 1.62%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Coronavirus cases worldwide reached 149.44 million. Covid-19 deaths topped 3.15 million.
Coronavirus cases in the U.S. have hit 32.92 million, with deaths above 587,000.
Stock Market Rally Tuesday
U.S. Stock Market Today Overview
Last Update: 4:00 PM ET 4/27/2021
The stock market rally held near record highs once again, await the slew of earnings over the next three days.
The Dow Jones Industrial Average closed virtually unchanged in Tuesday’s stock market trading, along with the S&P 500 index. The Nasdaq composite dipped 0.3%. Tesla stock’s fall and a rise in the 10-year Treasury yield weighed on the composite.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) dipped 0.1%, while the Innovator IBD Breakout Opportunities ETF (BOUT) fell 0.55%. The iShares Expanded Tech-Software Sector ETF (IGV) lost 0.4%, with MSFT stock the No. 1 holding. The VanEck Vectors Semiconductor ETF (SMH) sank 0.6%. AMD stock is a major SMH component.
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Tesla stock fell 4.5% to 704.74, the fifth straight time that it’s declined the day after earnings. The EV giant reported better-than-expected earnings and revenue, getting a big boost from Bitcoin sales and regulatory credits revenue. Tesla left its deliveries target intact while saying the revamped Model S and X won’t see significant deliveries until the third quarter.
A big unknown is whether Chinese customer complaints about breaks and other issues — highlighted extensively on state-owned media — will take a toll on China sales going forward. China has been Tesla’s growth engine for the past year, but competition is heating up dramatically.
Tesla driver-assist safety concerns also are an issue, though CEO Elon Musk on Monday’s earnings call blasted “deceptive” media reports on the deadly crash killing two Model S passengers on April 17.
TSLA stock closed above its still-declining 50-day line with a 780.89 buy point from a cup-with-handle base.
But shares fell slightly early Wednesday, suggesting a test of the 50-day line. While a successful test could shake out weak holders, decisively breaking the 50-day line would be a negative signal. It also could drop the midpoint of the handle below the midpoint of the base, making it invalid.
Microsoft earnings beat while the 19% revenue gain was the best since 2018. Azure cloud-computing revenue jumped 50%, but that was only in line with estimates. MSFT stock fell 2.5% early Wednesday, paring early after-hours losses somewhat on bullish guidance given on the earnings call. Shares edged up 0.2% on Tuesday to 261.97, touching a record high.
Google earnings crushed views while revenue growth accelerated again to 34%, the best in years. The FANG giant also announced $50 billion for stock buybacks. Google stock popped 5% in premarket action, signaling a fresh high. Shares dipped 0.8% to 2,290.98 on Tuesday. Facebook stock, which is in a buy zone, rose slightly before the open on Google earnings.
AMD earnings beat views on booming data-center chip sales. while the chipmaker guided higher. AMD stock climbed 4% overnight. Shares edged down 0.2% to 85.21 on Tuesday. In the past few sessions, AMD stock has reclaimed its 50-day and 200-day lines. Several other chip plays reported late Tuesday, including Teradyne (TER), Texas Instruments (TXN) and Maxim Integrated Products (MXIM).
Pinterest earnings beat views but the social site missed some user estimates and warned that user growth may slow as the economy reopens. PINS stock tumbled 12% before the open. Shares rose 1.11% to 77.58 on Tuesday, reclaiming the 50-day line. Pinterest stock has an 88.93 cup-with-handle base, according to MarketSmith analysis. The handle is 21% deep, formed from a high-volume reversal.
Visa earnings topped targets at $1.38 a share, a penny below a year earlier. Visa stock gained about 2% in extended action. Shares edged down 0.2% to 229.31 on Tuesday. Last week Visa stock moved above a 228.33 buy point from a flat base. However, the relative strength line has been trending lower for the past 10 months, reflecting Visa stock’s underperformance vs. the S&P 500 index. But that follows a nine-year run of outperformance. Mastercard ticked higher in extended trade after closing just in buy range. Visa’s archrival reports early Thursday.
Starbucks earnings topped forecasts but sales came in a little. The coffee chain did offer robust guidance. SBUX stock fell 2% early Wednesday. Shares finished Tuesday up 0.2% at 116.15, continuing to consolidate for the past few sessions just above a buy zone. Starbucks stock cleared a 107.85 flat-base buy point on Feb. 26, but didn’t hold above it until April.
Shopify earnings and revenue were far above views. SHOP stock popped 6% before the open, signaling a move above its 50-day line. Shopify stock has been stuck between its 50-day and 200-day lines.
Boeing reported its sixth straight quarterly loss, wider than expected. Revenue fell 10%, but that was above some views. Boeing stock lost 1% before the open. Shares rose 0.4% on Tuesday. BA stock regained its 50-day line on Monday, near a potential early entry as it works on what looks to be a double-bottom base.
Spotify stock reported a smaller-than-expected quarterly loss with revenue in line. Monthly active users missed some estimates while average revenue per user declined. Spotify stock plunged 7% before the open. Shares fell 1.7% on Tuesday to 288, just above a declining 50-day line.
Market Rally Analysis
The stock market rally continued to move sideways as earnings season picks up momentum. The major indexes will likely take their cue with Microsoft and Google now reporting and fellow giants Apple, Facebook and Amazon.com (AMZN) on tap, along with hundreds of other companies. But that could be up or down, or further sideways action, especially if earnings reactions are mixed.
The Dow Jones and S&P 500 are now 3.8% and 5% above their 50-day lines, respectively, giving them a bit of room to rise before looking extended. The Nasdaq is just below record highs while the Russell 2000 has shored up, moving toward all-time levels as well.
Have a game plan for offense and defense. That goes for your overall portfolio and individual stocks. If earnings season goes well, you’ll want to have some quality names near buy points on your watchlist. If earnings season struggles broadly or for specific holdings, what’s your exit strategy?
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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