Dow Jones Futures: Crude oil price crash tests the coronavirus stock market rally; Netflix, Snap, Chipotle winners


Dow Jones futures edged up Tuesday evening, as did the S&P 500 and Nasdaq futures, as the Senate approved a new coronavirus stimulus bill. The coronavirus stock market rally retreated for a second session amid falling crude oil prices. Netflix (NFLX) reported profits after closing, as well as Break (BREAK), Chipotle Mexican Grill (CMG), Texas instruments (TXN) and Teradyne (TER).


The coronavirus market rally suffered larger losses on Wednesday, as the Nasdaq and growth stocks led the way down. Microsoft (MSFT), Nvidia (NVDA) and Fortinet (FTNT) undercut the purchase points. Apple and Tesla stocks also fell. Apple (AAPL) and You’re here (TSLA) are large consumer discretionary companies that could be threatened by prolonged outages of coronaviruses and a slow economic recovery.

The US crude oil futures contract now expired in May has returned to positive territory after a bizarre fall below zero. But the June crude oil futures contract plunged as storage space will remain scarce in a context of weak demand.

One of the big coronavirus “stay-at-home” games, Netflix action, saw overnight ups and downs despite subscriber growth. Snap stocks jumped on results, while Chipotle, Texas Instruments and Teradyne stocks also climbed.

The Netflix action is on IBD Leaderboard. The same goes for Microsoft and Nvidia stocks. The MSFT share is a long-term IBD leader.

Wednesday early, Biogen (BIIB), Delta Airlines (DAL), Thermo Fisher Scientific (TMO) and Quest Diagnostics (DGX).

Dow Jones Futures Today

Dow Jones futures rose 0.4% over fair value. The S&P 500 futures contracts were up 0.4%. The Nasdaq 100 futures contracts were up 0.6%. With the recovery in the coronavirus stock market shrinking and preventing wild swings in crude oil prices, futures contracts on Dow Jones could become more volatile again.

Dow Jones futures were up as a result of the new coronavirus stimulus, as well as crude oil prices rose slightly as part of the extended trade.

Keep in mind that overnight action on Dow and elsewhere does not necessarily translate into actual transactions during the next regular trading session.

Join the IBD experts as they analyze the actionable actions of the coronavirus market rally on IBD Live.

Coronavirus cases

Coronavirus cases worldwide have exceeded 2.55 million. The deaths of Covid-19 are more than 177,000.

In the United States, the number of coronavirus cases has exceeded 814,000, and deaths from Covid-19 have reached 45,000. New coronavirus cases have slowed sharply in New York and New Jersey, but confirmed infections continue to increase rapidly in much of the country.

On Tuesday, the Senate approved a $ 484 billion stimulus package against coronaviruses. The measure includes significant new assistance to small businesses after initial funding for loans under the $ 2 trillion stimulus law on coronavirus stimulation has quickly run out. It also includes support for hospitals and tests. The House must vote on the bill before it can go to President Donald Trump.

Coronavirus stock market rally

The rally in the coronavirus stock market has once again declined, with more testing for growth stocks.

The Dow Jones Industrial Average fell 2.7%, the S&P 500 lost 3.1% and the Nasdaq composite lost 3.5%. The Nasdaq, which recorded limited losses on Monday, underestimated its moving averages of 200 days, 50 days and 21 days.

The May contract for crude oil, which is now expired, was $ 10.01 a barrel after plunging to – $ 37.63 on Monday. However, the June crude oil contract fell 47% to 11.57 a barrel, as traders worried about indoor storage during the summer.

Microsoft stocks fell 4.1% to 167, well below a double-bottom buy point of 175.10 and early entry at 170.10. Nvidia shares lost 6.1% to 269.51, below an entry of 275.50. Fortinet shares plunged 9.9%, falling more than 7% to 8% from the point of purchase and closing below its 50-day line.

The Apple title fell 3.1% and the Tesla title lost 8%. The Apple iPhone and Tesla electric vehicles are among the most well-known tech gadgets. But they are also expensive in the midst of a severe global recession, while the Tesla Fremont factory is closed. Reports on Apple and Tesla results next week will be essential.

The MSFT and AAPL stocks are composite components of Dow Jones, S&P 500 and Nasdaq, with market capitalizations over $ 1 trillion.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slipped 3.6%. The iShares Expanded Tech-Software Sector (IGV) ETF fell 4.6%, with MSFT leading. The VanEck Vectors Semiconductor (SMH) ETF slipped 4.5%, with NVDA and TXN stocks being among the largest.

Netflix subscriber growth makes up for lost earnings

Netflix profits jumped 107% to $ 1.57 a share. Sales increased 28% to $ 5.77 billion. Analysts had expected Netflix earnings per share of $ 1.65 on revenue of $ 5.76 billion.

Netflix subscribers soared 15.77 million against analyst targets of over eight million.

Netflix steered its results and revenues in the second quarter. It predicts 7.5 million new subscribers, although management has admitted that this was largely a guess in the current coronavirus climate.

Netflix action went up a fraction overnight. Equities edged down 0.8% to 433.84 on Tuesday, further elevating the stock market decline for coronaviruses. The Netflix action has closed, extended purchase points.

Netflix stock is # 1 on the IBD 50 list. (Microsoft, Nvidia, Fortinet and Teradyne stocks are also on the IBD 50.)

Snap Earnings

Snap lost 8 cents per adjusted share with sales up 44% to $ 462 million, defying fears of poor publicity. Analysts predict a loss of 20 cents on sales of $ 427 million.

Parent Snapchat reported that daily active users increased 20% to 229 million from 224.5 million views.

Instant stock increased 20% overnight. Shares fell 3.7% to 12.44 on Tuesday. The snap stock reached resistance to its 50-day moving average down. Snap could hit its 200-day line. After that, a potential buy point of 19.85 looms.

Facebook (FB), which reports next week, rose slightly overnight.

Chipotle gains

Chipotle’s profit fell 9% to $ 3.08 per share. Revenues increased by almost 8% to reach $ 1.41 billion. Same store sales increased 3.3%, despite a 16% drop in March. Wall Street expected Chipotle earnings of $ 2.56 on sales of $ 1.39 billion, with quarterly sales growth of 1.8%.

Chipotle and other restaurants had to switch to takeaway and delivery only. Chipotle is adding drive-thru lanes, but only 66 locations had them at the end of 2019. But digital sales jumped 81%.

The fast-paced, relaxed burrito giant has withdrawn its 2020 forecast due to the coronavirus crisis.

The chipotle stock increased 6.5% overnight. Shares fell 2.7% to 786.69 on Tuesday, plunging below their 200-day line. The chipotle stock is working on a purchase point 940.38 from a very deep V-shaped consolidation.

Texas Instruments Results

Texas Instruments’ profit fell 16% to $ 1.14 per share. Sales increased 7% to $ 3.33 billion. Analysts have predicted a profit of $ 1.01 for Texas Instruments on sales of $ 3.177 billion.

The chipmaker has widened its forecast for the second quarter, with midpoints far below views.

Texas Instruments stocks rose 3% in extended trade. Shares fell 4.2% to 106.84 on Tuesday. Texas Instruments’ stock is technically being consolidated but is trading below its 200- and 50-day lines.

Teradyne earnings

Teradyne’s profit climbed 89% to $ 1 per share. Revenues increased 42.5% to $ 704 million. Wall Street predicts Teradyne’s profit of 88 cents on sales of $ 678.8 million.

The chipmaker sees second-quarter earnings per share of 86 cents at $ 1.06, with revenues of $ 690 million to $ 800 million. That’s above consensus for Teradyne’s profit of 81 cents and $ 646.9 million in sales.

Teradyne’s stock jumped 10% overnight. Stocks slipped 2.5% to 60.93 on Tuesday but remain above the 50-day and 200-day lines. Teradyne has a buy point of 81.67. Teradyne’s stock could work on a handful that would offer much lower entry.

Coronavirus market rally test: success or failure?

After the recent big gains for the coronavirus stock market rally, it is not surprising to see a decline and moving averages of the Nasdaq test keys. A temporary break would offer a chance for more stocks to fall, with Apple and Tesla stocks among those potentially forming handles.

But there is the possibility of a more serious retirement. The initial rally confirmed after a bear market often fails. Even if it doesn’t, a significant slide to March lows would threaten many recent breaks, beyond Microsoft stocks, Atlassian stocks and Nvidia stocks.

Be prepared to reduce losses and limit the overall exposure of your portfolio. Read The Big Picture every day to stay on top of market trends and major stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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