Dow Jones futures rose modestly Friday morning, along with S&P 500 futures and Nasdaq 100 futures, as Hurricane Florence made landfall on the North Carolina coast. On Thursday, the Dow Jones climbed 0.6%, the S&P 500 index 0.5% and the Nasdaq composite 0.75%. Chip stocks rebounded after leading the Nasdaq lower Wednesday. Chinese companies also were hot, led by massive gains by new IPOs Nio (NIO) and Pinduoduo (PDD). Tilray (TLRY) skyrocketed Thursday, even as other marijuana stocks slipped, but tumbled overnight. Facebook (FB) continues to look worse. And as for Apple (AAPL): Apple stock is doing just fine; it's on track to shake off the iPhone unveiling curse for the week.
XDow Jones Futures Today
Dow Jones futures climbed 0.2% vs. fair value. S&P 500 futures were up 0.2%. Nasdaq 100 futures gained 0.35% as techs led again. Top stock Adobe Systems (ADBE), a big-cap S&P 500 and Nasdaq composite member, was little changed despite topping earnings views. But Nio, Pinduoduo and Tilray stock were notable movers.
Keep in mind that Dow Jones futures, Adobe's stock action and other overnight moves may not translate into actual trading in the next regular session.
Here are five takeaways from Thursday's stock market trading:
Chip Stocks Matter
The Philadelphia Semiconductor Index rose 1.2% Thursday, continuing a rebound from Wednesday after undercutting its 200-day moving average. The Philly Sox index did close off highs and just below its 50-day moving average.
Chip stocks typically lead or at least take part in stock market rallies. AMD (AMD), despite a nasty reversal from record highs Thursday, has been red hot, while Nvidia (NVDA) reclaimed a buy point in the session. But overall, chip stocks have struggled. The Philly Sox's relative strength line is just above a 2018 low as it lags the S&P 500 index and especially the Nasdaq composite.
If chip stocks could lead or even just keep pace with the broader indexes, it would be a boon to the market rally.
The iShares PHLX Semiconductor (SOXX) ETF, which mimics the Philly Sox index, was up 0.6% early Friday. Nvidia and AMD shares were both up nearly 2%.
China Stocks Have Big Day; Two IPOs Fly
With China trade-war fears waning for the moment, U.S.-listed Chinese stocks had a big day after months of struggle. Alibaba (BABA) rose 2.5%, Tencent (TCEHY) 5.3% and Momo (MOMO) 6.7%.
Momo stock is working on what looks like a cup-with-handle base with a 47.85 buy point. But there's a big flaw. The midpoint of the handle is 1.5 cents below the midpoint of the base. Why does that matter? If the handle is low in the base, there is still a lot of overhead resistance, with weak holders still waiting to exit as the stock closes on all-time highs.
Meanwhile, Nio stock exploded for a 76% gain on the Chinese luxury electric-auto maker's second day of trading. On Wednesday, shares rose 5.4% after the IPO priced near the low end of an expected range. Another recent IPO, Pinduoduo, vaulted 30% to 29.96, clearing a 27.64 cup-base entry in its first-ever breakout. Pinduoduo describes itself as an e-commerce mashup of Costco and Disney.
Early Friday, Nio jumped 20%. Pinduoduo retreated 2.7%, but was still in buy range.
Tilray Stock: Finally Due For A Down Day?
Tilray stock surged 14% to 119.76 after hitting a record 127.27 intraday. That's up from a July IPO price of 17. Meanwhile, fellow Canadian marijuana stocks listed on U.S. exchanges, Cronos Group (CRON) and Canopy Growth (CGC), slid 10% and nearly 14%, respectively.
Tilray stock, Cronos stock and Canopy stock all retreated overnight, with Tilray sinking 10%. The after-hours catalyst seemed to be a top U.S. Customs official telling Politico that Canadian marijuana industry workers and investors could face a lifetime ban on travel to the U.S.
Facebook Stock Is A Social Outcast
Facebook stock fell 0.4% to 161.36, its worst close since late April, defying the broader rally in tech stocks. The RS line skidded to its worst level since January 2017. As an analyst recently stated, the combination of slowing growth and heightened regulatory risk is a "toxic brew" for the stock. Twitter (TWTR), Snapchat operator Snap (SNAP) and, to a lesser extent, Google parent Alphabet (GOOGL) also are struggling.
If you look back to Facebook's late April to late July rally, note that the stock hardly ever rallied in above-average volume. That suggested a lack of institutional buying and conviction after the Cambridge Analytica scandal.
Apple Stock Is Just Fine
Apple stock is not quite back to its Sept. 5 peak of 229.67. But shares rose 2.4% to 226.41 on Thursday. After a long period of moving with the market, Apple stock has powered higher since its July 31 earnings report. While shares dipped on Wednesday's iPhone unveiling, they seem on track for a solid weekly gain, despite concerns of Apple iPhone sticker shock.
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