Futures on Dow Jones fell 1.9%, futures on S&P 500 slipped 1.7% below fair value. Futures on the Nasdaq 100, which see no direct impact from oil stocks, fell 1.1% in the stock market today. Premarket was initially positive about news of progress toward a second round of federal support for small businesses and hospitals struggling with the impact of the coronavirus pandemic.
The upward progression of last week showed that the confirmed upward trend of the market was strengthening. But investors should be aware of the five factors that may determine the market price for May.
Nineteen of the top 20 pre-market losses on the S&P 500 were oil-related stocks. United Airlines Holdings (UAL) was also among the first victims, down 6%, after announcing a larger-than-expected loss, and plans to claim $ 4.5 billion under the CARES (Coronavirus Air, Relief and Economic) law. Security).
Flir systems (FLIR) jumped to the top of the S&P 500, up 6.8% at the start of the session. Chemical manufacturer DuPont (DD) climbed 3.8% as JPMorgan improved its stocks after the company updated its forecasts for the first quarter.
Netflix (NFLX) rose 2.9% to exceed the Nasdaq 100, before its first quarter report, expected on Tuesday. The IBD Leaderboard stock is extended after a break on April 13. Long-term IBD leader stock Alibaba Group Holdings (BABA) added 0.4%, advancing into a short-term buy zone on the IBD Swingtrader stock tracker.
United and American airlines (AAL) traded at the bottom of the Nasdaq 100. Western digital (WDC) sold 3%. You’re here (TSLA) was 2.5%.
Heavy petroleum services Halliburton (HAL) chose a bad day to publish its results, plunging by almost 7% despite a better than expected first quarter report. Leader HVAC Lennox (LII) fell 8% after a big shortfall. Auto loan specialist Ally Financial (ALLY) lost 3% as investors dug into its first quarter results.
Prepare for a week-long critical action by reading IBD investment action plan.
Dow Jones Today: Exxon, Chevron Slide; IBM reports
Exxon fell more than 6%, Chevron plunged 5.2% to the bottom of the Dow Jones today, as names in the energy sector were clearly threatened by falling demand for oil. Exxon had recovered 43%, Chevron 71%, since mid-March. But the two actions remained deep in the 11-month corrections.
IBM slipped 0.9%, ahead of its first quarter results expected after today’s close. Intel (INTC) announcement after market close on Thursday. American Express (AXP) announced Friday morning.
Coronavirus stocks: Co-Diagnostics, BioNTech, Vertex Rise
Some coronvirus stocks increased against the wave. Test kit manufacturer Co-diagnostics (CODX) soared more than 10% after its chief executive announced increased sales of test kits in more than a dozen states. Testing is increasingly becoming a critical factor in stimulating economic activity in the United States. Co-Diagnostics mounts the right side of a seven-week cup base.
Biotech based in Germany BioNTech (BNTX) bonded at 2%. October’s volatile IPO exploded by a 10-week basis on March 16. Stocks climbed 115% in the week following the breakout, then returned to finish Friday 17% below entry 48.95. BioNTech is partner with Pfizer (PFE) in the development of several candidate vaccines against coronaviruses.
Vertex Pharmaceuticals (VRTX), which is extended after a breakout last week from a cup base, nailed 1.4% in the pre-market trade.
Oil prices plummet to 21-year lows
Monday’s pending issue will be the impact of the drop in US oil prices. The US benchmark West Texas Intermediate crude is in the middle of its fourth consecutive monthly decline, down 10.8% so far in April to trade 72% below a January peak. WTI oil prices collapsed an additional 38% Monday morning, to close to $ 11 a barrel – and their lowest level since February 1999. European crude Brent fell 6% to $ 26.36.
Drilling rig activity in the United States had already dropped 35% in the past month, as US and international bottlenecks weighed heavily on fuel demand. Heavily indebted US oil producers are on the verge of a bankruptcy rush – following a record number of bankruptcies in the industry in 2019. A growing wave of bankruptcies, in turn, threatens to spread to the financial sector and banks and the funds holding this debt.
The apparent trigger for Monday’s deep declines was data from Japan showing a 12% drop in exports in March – just the latest measure of the destruction of current demand in relation to the coronavirus pandemic. The Tokyo Nikkei 225 slipped 1.2% on Monday, while the Chinese markets ended in very contrasting ways.
Europe followed the example of Japan, with the CAC-40 in Paris and the DAX in Frankfurt down more than 1% in afternoon trading. The London FTSE 100 lost 0.7%.
Dow Jones Today: a 10% month for the Dow Jones
Thirteen trading days in the month, and April is on track for the Dow and S&P 500’s first monthly advance in 2020. The Dow ended last week with a gain of 10.6% so far for the month. The S&P 500 was 11.2% ahead. The Nasdaq (which posted a 2% gain in January) posted an April gain of 12.3%.
The Dow Jones does not throw a month of gains of more than 10% for light and transitional reasons. Its performance from April to Friday is its strongest monthly advance since October 2002. It was the month in which the market marked the bottom of the 22-month market collapse that began in January 2000, and which included the impact of terrorist attacks. September 11, 2001.
The Dow Jones rebounded 10.6% in October 2002, followed by a gain of 5.9% in November. This rally weakened, falling for three months, but staying above the October 10, 2002 low of the Dow Jones. The stocks then launched into a five-month rally in March 2003, initiating a 43-month uptrend that boosted the Dow until the financial markets began to collapse in October 2007.
No two market takeovers behave the same way. But keeping an eye on history can provide a useful perspective as the stock market stages such historic recoveries. To learn more about how the stock market informs the current uptrend, be sure to read the big picture and follow IBD Live.
Coronavirus update: growth rate
The cumulative number of confirmed coronavirus cases was rapidly approaching the 2.5 million mark, up from 69,123 in 24 hours until Monday morning to reach 2,419 million cases now recorded worldwide. This is a 2.9% increase from the 4.9% increase posted on Friday morning. A further 4,505 people died, bringing the total to 165,775, which slowed the increase in deaths to 2.8% from 9% on Friday.
In the United States, 25,342 new cases have been confirmed, down sharply from the increase of more than 33,000 on Friday. The new cases reported result only from the number of tests performed and are a poor measure of the actual spread of the virus, which remains largely unknown. The new case reported on Monday brought the current cumulative total to 764,265, up 3.4% in the past 24 hours, bringing the US share of the world’s total number of coronavirus cases to nearly 32%.
The number of deaths increased by 1,550, bringing the rate of increase below 4%, after an increase of 21% on Friday. This brings the number of American deaths from the virus to 40,565. The majority of these deaths have occurred in New York State, which has so far reported 18,298 deaths – 45% of the US total.
The growth in the number of active cases continued until Sunday, at around 3.4%. This brought the number of infected people currently being treated or quarantined to 652,874 on Sunday – more than three times what it was in late March. The growth rate of these active cases slowed by about 14% at the start of the month.
Dow Jones Today: IBM Earnings, Intel Base
Dow Jones stocks have mixed start to first quarter release season after Goldman sachs (GS), JP Morgan (JPM), UnitedHealth Group (UNH) and Johnson & Johnson (JNJ) reported last week.
Johnson & Johnson had a solid week, their fourth consecutive weekly advance, after announcing a beaten profit on Tuesday. Stocks climbed 7.6% for the week, ending less than 2% below a 151.60 buy point in a 10-week cut base.
UnitedHealth had an even stronger week, up 9.9% after exceeding analysts’ first quarter targets. The stocks finished less than 6% below a 306.81 buy point in an eight-week cut base. Aggressive investors may also want to consider buying at 295.94.
IBM (IBM) reports after today’s closing bell. Intel (INTC) announcement after market close on Thursday. American Express (AXP) announced Friday morning.
American Express and IBM are still quite beaten. Intel followed the general recovery in the chip industry, fueled in large part by the recovery among chip manufacturers in the data centers. Intel has climbed 38% since March 16, going up the right side of a base model cup with handle and resuming support on its 10-week line last week.
The Intel title briefly passed the base buy point of 61.59 on Friday, then fell to finish just below that entry.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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