Stock futures moved sharply higher Monday, as the rollout of the first U.S. coronavirus vaccine doses, and a glimmer of momentum toward agreement on federal pandemic relief boosted early optimism. Europe’s markets rallied on hopes for a possible Brexit deal. Moderna and Alexion led among biotechs. Johnson Outdoors and Innovative Industrial Properties rallied. Boeing and Chevron led the Dow industrials in premarket trade.
Dow Jones futures gained 0.8%, as nearly 25% of the index rose more than 1%. S&P 500 futures traded 0.7% above fair value. Nasdaq 100 futures pared gains to 0.3% on the stock market today, following reports of a large-scale cyberattack, allegedly by Russian actors, across multiple U.S. federal agencies. It was not clear whether a wide-scale Google outage was related. So far, the problems affected only a limited numbers of stocks.
Alexion Pharmaceuticals, rallying on merger news, led the Nasdaq 100 and S&P 500. Airlines and cruise line operators jumped on vaccine optimism.
Shares of Google owner Alphabet (GOOGL) held steady early Monday, amid reports of a global outage affecting its YouTube, Gmail and Google Drive platforms. Other news reports on Monday said Russian government hackers had accessed Treasury and Commerce department systems, as well as other U.S. government agencies, via network management system operated by Solar Winds (SWI).
An emergency directive early Monday from the U.S. Cybersecurity and Infrastructure Security Agency advised “all federal civilian agencies to review their networks for indicators of compromise and disconnect or power down SolarWinds Orion products immediately.” SolarWinds stock dived more than 15%.
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Early Stock Action: Innovative Industrial, Johnson Outdoor
Innovative Industrial Properties (IIPR) popped nearly 4%, leading both the IBD 50 and Leaderboard lists of top growth stocks. The premarket move implied a possible open above a three-weeks tight buy point at 165.09. Palantir Technologies (PLTR) leapt 2.6%, as it continues its two-week consolidation, up 136% from an early November breakout.
Marine equipment maker Johnson Outdoors (JOUT) rallied 3.3%, a gain which would move it narrowly out of a buy range after a breakout on Friday. The buy range runs to 98.87. The stock holds a strong IBD Composite Rating of 93, and is the No. 3-ranked stock in the Leisure-Products industry group.
Dow Jones Stocks: Boeing, Chevron, Nike Lead
Boeing (BA) shares climbed 2%, leading the Dow industrials and joining the vaccine optimism driving airlines and cruise lines in early trade. Walt Disney (DIS) dragged at the bottom of the Dow, down 0.9% in premarket trade. Disney stock landed a 13.6% gap-up advance on Friday, after providing updated details on its Disney+ streaming service.
Dow Jones energy leader Chevron (CVX) jumped 1.6%, as oil producers also pressed to the top of teh S&P 500 in early trade. Oil prices jumped, with West Texas Intermedate up 1.5% and traded well above $47 a barrel.
Nike (NKE) swung 1.3% higher, as the IBD Leaderboard stock angles to end a three-day pullback. Nike stock is extended after a follow-on buying opportunity in early November. The fitness-wear brand is scheduled to report its fiscal second-quarter results after the market closes on Friday.
Biotechs: Pfizer Vaccine, Moderna U.S. Deal, AstraZeneca To Buy Alexion
Pfizer (PFE) and BioNTech (BNTX) gained 1.6% and 0.9%, respectively, as the U.S. prepared to administer the first doses of the partnership’s vaccine, which was granted Emergency Use Authorization from the Food and Drug Administration on Friday. Trucks left Pfizer’s facility in Michigan carrying the first packages of the vaccine on Sunday, CNBC reported. Rapid distribution is expected across all 50 states, in what the New York Times called “the initial step in the most ambitious vaccination plan in U.S. history.”
First doses are generally expected to be administered to front-line healthcare workers and at-risk elderly persons in senior care facilities. President Donald Trump delayed initial plans to place senior White House staff among the earliest vaccine recipients.
Moderna (MRNA) ran up 3.9%, after announcing late Friday that the U.S. agreed to buy another 100 million vaccine doses, enough for 50 million people. The FDA’s vaccine committee is set to meet Thursday to discuss a possible EUA for Moderna’s vaccine. Moderna stock triggered the eight-week hold rule in late November, rising in less than two week to more than 20% above a 95.31 buy point in what IBD MarketSmith chart analysis plots as a 17-week cup base.
Fed Meeting, Stimulus, Brexit
The Federal Reserve’s quarterly two-day meeting begins Tuesday, with a rate policy announcement and press conference with Chair Jerome Powell set for Wednesday afternoon. Markets do not generally expect a change of the target rate, but a possible increase of quantitative easing bond purchases, and possibly an adjustment toward long-dated bonds, are two alternatives the Fed could use to help prop the economy. Powell has aggressively urged Congress to provide additional economic stimulus, to counter the ongoing impact of the coronavirus pandemic.
Talks continued between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi on Sunday, with Bloomberg reporting the two discussed federal funding and pandemic relief in a phone call. The pair agreed to talk again on Monday.
For detailed analysis of the current stock market and its status, study the Big Picture.
A bipartisan group of lawmakers is reportedly preparing to present, on Monday, two bill proposals, totaling $908 billion in pandemic relief measures. Secretary Mnuchin’s $916 billion proposal also appears to be in play. Specific amounts of stimulus checks for consumers, supplemental weekly payments to unemployed persons, and protections for businesses against Covid-19-related lawsuits are all issues remains sharply divided along party lines.
Europe’s markets traded unevenly higher, after U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen extended what was to be a Sunday night deadline for a Brexit trade agreement. The news rekindled some hope in talks that appeared broken down several days ago. Fishing rights have been the major sticking point, along with some level-playing-field competitive rules. The negotiators did not set a new deadline. More than four years after the U.K. voted to part with the EU, the official exit is set to occur on Dec. 31.
Frankfurt’s DAX rose 1.2%. The CAC-40 in Paris climbed 1%, while London’s FTSE 100 defended a fractional gain in afternoon trade.
Buy Points, Buy Ranges: Vipshop, Shutterstock
China ecommerce apparel leader Vipshop Holdings (VIPS) ended Friday in a buy range above a cup-base buy point at 24.56. Shares remain in a buy zone through 25.79. Vipshop stock, an IBD 50 listing, moved up 1.9% early Monday.
Online photo and image marketplace ShutterStock (SSTK) traded flat early Monday. Shares are pulled back below a three-weeks tight buy point in a test of support at the stock’s 50-day moving average. If the stock rebounds in strong volume, it could be bought as a rebound from support. Or, investors can wait for a possible retake of the buy point at 71.71.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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