Dow Jones, Futures Inch Up As Trump Balks At Coronavirus Bill; Clean Energy Rally Continues; Merck Rises On Covid Treatment

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Stock futures edged cautiously higher Wednesday, as a long-suffering federal coronavirus relief effort ran into an Oval Office snag. Clean energy stocks appeared set to continue Tuesday’s rally, triggered by a $32 billion item tucked into the Covid-19 relief package. Intuitive Surgical, DraftKings and Generac Holdings were near buy points. And JPMorgan rose highest among Dow Jones stocks in premarket trade.




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Dow Jones futures crept 0.25% above fair value, while S&P 500 futures added 0.2%. Nasdaq 100 futures inched nominally higher on the stock market today, with JD.Com (JD) and Baidu (BIDU) leading, while United Airlines (UAL) and Tesla (TSLA) each gave up about 1.5%.

A coronavirus stimulus package approved by the House and Senate on Monday was held up at the White House as President Donald Trump delayed signing the measure and called for modifications. The President says he wants higher direct payments to consumers, and fewer add-ons inflating the overall size of the bill. The bill was passed with veto-proof majorities in both the House and Senate.

Small caps led the early action, as Russell 2000 futures gained 0.6%. Supurnus PharmaceuticalsSUPN spiked 20% after positive trial results for an ADHD treatment.  Small caps Bandwidth (BAND), Datadog (DDOG) and Axon Enterprise (AAXN) were featured on Tuesday’s Ready List for IBD Live show.

Several China-based stocks showed early strength. Online apparel retailer JD.com punched up more than 3%, leading the Nasdaq 100. The move pointed to a move back above the stock’s 21-day and 50-day moving averages, as the stock works on a possible seven-week cup base. On IBD’s Leaderboard roster, Pinduoduo (PDD) jumped 2.6%, enough to perk shares back above their 21-day exponential moving average.

Also on the Nasdaq, Intuitive Surgical (ISRG) climbed 1.8%. The maker of robotic surgical instruments ended Tuesday in a buy range above a flat base buy point at 792.64. The buy zone extends to 832.27.

FLIR Systems (FLIR) topped the S&P 500 with a 3.6% advance. The stock sat out Tuesday LIDAR rally triggered by Reuters reporting plans by Apple to toss its hat into the autonomous vehicle manufacturing arena, but would outsource some design elements, such as LIDAR — a laser-based light detection and ranging technology.

Stocks scoring breakouts on Monday included Proto Labs (PRLB), Chegg (CHGG) and Peloton (PTON). Intuitive Surgical, DraftKings (DKNG) and Generac Holdings (GNRC) were all in buy ranges or below buy points early Wednesday. Rackspace Technology (RXT) is forming a handle on its somewhat deep but reasonable cup pattern.

Dow Jones Stocks: JPMorgan, Apple Rise

JPMorgan climbed 0.7%, enough to lead the Dow Jones industrial average in premarket action. AppleAAPL gained 0.3%, angling to follow up Tuesday’s 2.9% jump, which moved shares just out of buy range above a 125.49 buy point.

Jobless Claims Dip; Durable Goods Orders Rise

First time unemployment claims decreased for the first time in three weeks, easing to 803,000 during the week ended Dec. 19, according to the Labor Department. That was down from the prior week’s surprise increase, which was revised even higher, to 892,000, in the current report. Economists had project a slighter decrease, to 857,000 applications.’

Durable goods orders rose more than expected in November, rising 0.9%, the Commerce Deparment reported. That was half of OCtober’s 1.8% rebound, but still above the 0.6% consensus of economist projections. Transportation was the majority of the rise, without which, orders gained 0.4% for the month — below the 0.5% consensus target. Core capital, which excludes aerospace and defense-related goods, also rose 0.4%, below views for a 0.5% increase.

Bitcoin, Copper Near Highs; Brexit’s Last Breath

Commodities were generally positive, with oil and gold edging higher and copper trading up 0.8% to $3.54 a pound, just below the seven-year high marked on Friday. Bitcoin rose more than 3%, according to CoinDesk, back above $23,400, after setting a record above $23,900 on Tuesday.

Markets in Asia took a moderate bounce Wednesday, with China’s benchmarks in Shanghai and Hong Kong ending up more than 0.8% each. Europe’s market were mixed, with Frankfurt’s DAX and Paris’ CAC-40 each up 0.8% near midday, while London’s FTSE 100 was bogged down in a 0.1% decline.

With just nine days until Britain’s official ‘trade exit’ from the European Union, negotiators continued to push for some sort of rough agreement governing trade between the EU and U.K. after Dec. 31. A no-deal Brexit would mean the economies would revert to World Trade Organization trading guidelines, and would likely lead to import taxes and border checks. Britain formally exited the EU on January 31 this year, but both sides agreed to an 11-month extension to negotiate trade rules.

Covid Stimulus Includes $32 Billion For Clean Energy

A broad range of clean energy-related stocks rallied Tuesday, after the stimulus package approved by the House and Senate on Monday and forwarded to the White House for a signature from President Donald Trump was shown to include a $35.2 billion stipulation for alternative fuels and new energy technologies. Labeled the Energy Act of 2020, the document described the rider as “a bipartisan, bicameral energy innovation package that authorizes over $35 billion in RD&D activities across DOE’s portfolio and strengthens or creates programs crucial to advancing new technologies into the market.”

The measure is, according to one energy policy analyst quoted by TechCrunch, “probably the biggest energy bill we’ve seen in a decade.”

In addition to funds, the measure also reportedly extends the solar investment tax credit by another two years, giving solar projects a much more aggressive outlook. As a result, the solar and alternative energy industries posted two of Tuesday largest advances among the 197 industry groups tracked by IBD.

Clean Energy Stocks Set To Extend Rally

At least some portions of the clean energy sector appeared set to continue higher Wednesday.

Enphase Energy (ENPH) rallied more than 4% early Wednesday. The stock is extended, up 152% from an August breakout and with a year-to-date gain of 580%.

SunPower (SPWR) clocked an early 4.6% gain. SunPower shares are extended after a third rebound from 10-week support, with a year-to-date gain of 500%.

Among China-based names, ReneSola (SOL) soared 10%. JinkoSolar (JKS) traded 4.1% higher, a move which would lift shares closer to what MarketSmith analysis charts as a 90.30 buy point in a deep 10-week cup base.

Among fuel cell-related names, Plug Power (PLUG) rose 4% in premarket trade. Fuel Cell (FCEL) amped up 7.9%, suggesting a starting bell break past a potential buy point at 11.41.

Among clean energy ETFs, iShares Global Clean Energy ETF (ICLN) and Invesco Solar ETF (TAN) each jumped 3.1% early Wednesday. The Invesco WilderHill Clean Energy ETF (PBW) gained 2.9%. And the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) traded 2.7% higher.


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Coronavirus Update

In the U.S., the daily average of new coronavirus infections over the seven days through Tuesday was 219,171. That was up from 165,421 on Dec. 1, 84,203 on Nov. 1, and 43,311 on Oct. 1. Deaths reported daily rose to 2,665 on Monday, up 68% from the start of the month. The daily average for deaths reported on Dec. 1 was 1,587. On Nov. 1 it was 850. On Oct. 1 it was 732.


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Worldwide, Tuesday’s seven-day average for new infections was 647,732. That was up from 585,107 on Dec. 1, and 509,261 at the start of November. Deaths were being reported at a daily rate of 11,630. At the beginning of December, the daily average was 10,333, up from 6,601 on Nov. 1 and 4,975 at the beginning of October.

IBD 50/Leaderboard: DraftKings, TSM Stock Near Buy Points

Premarket action showed stocks including Crowdstrike (CRWD) and PayPal Holdings (PYPL) poised to extend gains from recent breakouts.

DraftKings rose 1%, a gain that would leave shares pulled back just below a 53.82 buy point in a cup-with-handle base.

Taiwan Semiconductor (TSM) tacked on a 0.4% increase, as Nikkei reported that the company was in the midst of hiring “300 new graduates and young engineers” to staff its new manufacturing plant in Arizona. TSM also intends to send 300 existing personnel to operate and manage the facility. TSM, an IBD Leaderboard listing, ended Tuesday less than 4% below a 107.94 buy point in a three-weeks tight pattern.

Dow Jones stock Microsoft (MSFT) traded flat early Wednesday. The Leaderboard stock has gained in six of eight recent sessions, climbing to just below an early alternative entry at 228.22. The standard buy point for Microsoft’s 17-week base is at 232.96.

SwingTrader listing Generac Holdings added 0.7%. The stock ended Tuesday’s session 3% below a 234.65 buy point in a seven-week flat-base pattern.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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