Stock futures trimmed their early gains only slightly Wednesday after August hiring data came in below expectations. International markets moved higher and financials led premarket action on the Dow Jones today, ahead of key manufacturing data. Biotech Moderna climbed on positive vaccine news, while earnings reports powered big premarket moves from Ambarella, PVH, Anaplan and Conn’s.
Dow Jones futures came off early highs, trading 0.3% higher in premarket action. S&P 500 futures swung 0.35% above fair value. Nasdaq 100 futures traded 0.35% higher on the stock market today.
Small caps cooled their early pace, with Russell 2000 futures paring back to a 0.4% gain. Fabless chip outfit Ambarella (AMBA) led the index, up more than 9%, with Stifel and Deutsche Bank raising price targets following above-forecast second-quarter results. St. Louis-based footwear retailer Caleres (CAL) also ran high on the Russell, bolting ahead 8% on strong second-quarter results.
Apparel maker PVH (PVH), the former Phillips-Van Heusen brand, topped the S&P 500 in early trade. The stock sprung 9.5% higher as JPMorgan raised its price target to 125, after the New York-based company clobbered analysts’ second-quarter estimates.
Some pandemic recovery plays also rose in early action, with Wynn Resorts (WYNN) and Las Vegas Sands (LVS) trading high on the S&P 500. Vaccine maker Moderna (MRNA) rose 1.8%, after data released late Tuesday showed patients dosed with its Covid vaccine produced higher levels of antibodies than those vaccinated with Pfizer‘s (PFE) product. Moderna is an IBD 50 stock.
Early earnings news also included efficiency and planning software specialist Anaplan (PLAN). It rocketed 15% higher as three analysts raised price targets on the stock after its late Tuesday earnings report. The Woodlands, Texas-based retailer Conn’s (CONN) jetted more than 10% higher on a Q2 earnings win.
Dow Jones Today: JPMorgan’s Buy Point
Goldman Sachs (GS), Visa (V) and JPMorgan (JPM) climbed more than 0.5% each to lead the early action on the Dow Jones today. Goldman was the Dow’s top advancer in August, rallying 10.3% for the month as the 10-year bond yield reversed a four-month slide and rebounded 5.3% for the month. The 10-year yield held steady around 1.30% early Wednesday.
Goldman stock is extended from an early August breakout. It has a year-to-date gain of 57%.
JPMorgan stock easily outpaced the overall stock market with a 5.4% advance in August. It briefly topped a 162.47 buy point in a two-month cup-with-handle base. Shares had eased to not quite 2% below that entry on Tuesday.
Econ News: August Hiring Misses Target, Manufacturing PMIs Coming Up
An initial look at hiring in August came in well below forecasts, as ADP’s August National Employment Report showed U.S. nonfarm private employers adding 374,000 workers for the month. That was an increase over July’s 326,000 employee increase, but will below estimates for 500,000 new hires.
Service sector employers did almost 88% of the month’s hiring, while goods-producing employers accounted for 12%. The ADP report is often viewed as a precursor to the Labor Department’s monthly payrolls report, due on Friday. But results can vary widely between the two reports.
Researcher Markit delivers its final manufacturing purchasing managers index at 9:45 a.m.ET. The Institute for Supply Management’s manufacturing PMI is set for a 10 a.m. ET release. The Commerce Department’s July construction spending data is on tap at 10 a.m.ET. And the Energy Information Administration plans to release weekly oil inventory stats at 120:30 a.m. ET.
China Rebound Continues; Europe Climbs
China’s markets plotted another positive session, extending a rebound begun on Aug. 23. The Shanghai Composite gained 0.65% on Wednesday. Hong Kong’s Hang Seng rallied 0.6%. That left the Shanghai benchmark ending August with a 4.3% gain, and up 2.7% since Dec. 31. The Hang Seng dipped 0.3% in August and is down 4.4% so far this year.
Among China-based ETFs, the iShares MSCI China ETF (MCHI) and the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) were inactive in premarket trade. The KraneShares CSI China Internet ETF (KWEB) rallied 1.3%.
Europe’s markets were showing nice strength near midday, after extending their seven-month rally through August. Frankfurt’s DAX added 0.2%, while London’s FTSE 100 jumped 0.6%. The CAC-40 in Paris swung 1% higher. The SPDR Portfolio Europe ETF (SPEU) was unchanged in early action, after bouncing 1.6% last week following a test of support at its 10-week moving average. The fund is trading less than 2% below a 44.06 entry in what IBD MarketSmith analysis marks as an 11-week flat base.
Stocks To Watch: International Money, Chipotle, Facebook, Matson
International Money Express (IMXI) is riding a five-day rally as it works on a seventh straight weekly advance. That climb lifted the stock briefly above an 18.79 buy point in a 53-week saucer base. Shares ended just a fraction below the entry on Tuesday.
Chipotle Mexican Grill (CMG) is sitting on a powerful six-week advance, closing Tuesday just below a 1,912.85 buy point. The buy point is in a four-weeks-tight pattern, a more bullish variation of a three-weeks-tight setup. The buy range extends to 2,008.49.
Matson (MATX) reversed an early gain and ended narrowly lower Tuesday, after a solid second-quarter sales and earnings beat reported late Monday. The stock held just pennies above a 79.15 entry in what IBD MarketSmith analysis charts as a 27-week cup base. The buy zone extends to 83.11.
Dow Jones Today: August Leaders
After above-average gains for the market’s major benchmarks in August, half of the 30 Dow industrials stocks are currently in valid bases or are pulled back and testing support at their 10-week moving averages.
On the Dow Jones today, Apple (AAPL) and Microsoft (MSFT) are the two stocks currently listed in IBD’s Leaderboard lineup. Microsoft is extended following a breakout in June, with a 6% gain in August and up more than 35% since Dec. 31. Apple is climbing above the high that followed a breakout in June. It is in a technical buy range through 155.40, after passing a trend line entry. Apple stock gained 4.1% in August, and has a year-to-date gain of 14.4%
For more detailed analysis of the current stock market and its status, study the Big Picture.
Goldman Sachs posted the largest gain in August among Dow Jones stocks, rising 10.3% and ending the month narrowly extended above a 393.36 buy point. Salesforce.com (CRM) was next in line with a 9.7% advance. That lifted Salesforce stock briefly above a 271.02 buy point in a 10-month saucer base.
Shares were 2% below that entry at the closing bell on Tuesday, with a year-to-date gain of 19.4%. Salesforce has a 94 Composite Rating from IBD. The stock’s relative strength rating is a weak 58, and its relative strength line lags well below its year-ago highs. This is not unusual as top stocks exit long basing periods.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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