Stock futures churned in mixed trade Wednesday as investors responded to earnings news and some strong early jobs data, while waiting on an afternoon policy announcement from the Federal Reserve. Bed Bath & Beyond (BBBY) soared on an e-commerce announcement. Earnings news steered U.K.-based Capri Holdings (CPRI) toward an early breakout. And Nike (NKE) led in early trade on the Dow Jones today, after expanding its partnership with Dick's Sporting Goods (DKS).
XDow Jones futures dropped 0.2%, and S&P 500 futures slipped 0.1% below fair value. Nasdaq 100 futures traded up about 0.2% on the stock market today, as the Nasdaq Composite aims to extend its really to an eighth day.
T-Mobile U.S. (TMUS) jumped 3.6%, leading the S&P 500, after Raymond James upgraded the stock to a strong buy. The firm lifted the stock's price target to 158 from 151 — 37% above where shares closed on Tuesday.
At the top of the Nasdaq 100, Vertex Pharmaceuticals (VRTX) rallied 3% on earnings news.
Lyft (LYFT) rallied on earnings, climbing almost 14% in the premarket session. Camping World Holdings (CWH) vaulted 7% on a strong earnings beat.
Positive earnings sent apparel maker Capri Holdings up more than 12%. If the premarket moves holds through the open, it implies a starting bell breakout past a 61.35 cup-base buy point. Peer stock Tapestry (TPR) appeared to catch some of Capri's updraft, rising 3.6% on the S&P 500.
On the downside of earnings, Zillow (Z), Freshworks (FRSH), Activision Blizzard (ATVI) and Tupperware (TUP) all suffered double-digit losses.
The day's central news item is this afternoon's Federal Reserve policy announcement and press conference. In addition, markets kept a close eye on elections in Virginia, where Republican challenger Glenn Youngkin took the governor's seat, and in New Jersey, where incumbent Democratic Phil Murphy is fighting a tight race for governor with Republican challenger Jack Ciattarelli. Lawmakers in Washington are also a factor in the week's market behavior, as progress toward two massive spending initiatives work their way through Congress.
Commodities were mixed. Oil prices fell hard, with West Texas Intermediate futures down more than 2%, ahead of the Energy Information Administration's weekly inventories report at 10:30 a.m. ET. Also, OPEC+ meets Thursday to determine production quotas. Bond yields backed off, with the 10-year Treasury yield down 1 basis point to 1.54%, and bitcoin traded 0.9% lower, around $62,482.
Dow Jones Today: Nike And Apple's Buy Points
Premarket action showed Nike pacing the Dow Jones today, up 1% after announcing a partnership expanding its marketing relationship with Pittsburgh, Pa.-based Dick's Sporting Goods. Nike shares ended Tuesday less than 4% below a cup-base buy point at 178.44.
The news sent shares of Dick's up more than 3%, suggesting the stock could potentially climb back above its 50-day moving average. Longtime Nike retail partner Foot Locker (FL) fell 3% in premarket action.
Apple (AAPL) shares rose 0.3% in early action. The stock ended Tuesday almost 5% below a 157.36 buy point in a nine-week cup base. But the chart is shaping a possible handle, which could lower the entry to 153.27.
Bed Bath & Beyond, Kroger Partnership
Bed Bath & Beyond stock jetted 55% higher after announcing an e-commerce pact with grocery giant Kroger (KR). The deal set up a digital marketplace selling third-party goods, and featuring products from Kroger. Bed Bath & Beyond also reported its BBBY stock buyback was ahead of schedule.
Short covering was potentially behind a large portion of BBBY stock's premarket gains. Bed Bath & Beyond was one of the original meme stocks earlier this year, and Reddit investors were buzzing about BBBY stock late Tuesday. Kroger stock traded flat.
Strong October Hiring, Fed Announcement On Deck
The National Employment Report from ADP showed nonfarm private employers added 571,000 workers in October. That was just above the 568,000 new hires reported for September, but well above economist projections for a slowdown to 400,000 new workers. Large employers accounted 60% of the month's hiring. Some 80% of the new jobs were in the services sector.
The ADP report is generally seen as a precursor to the Labor Department's monthly payrolls report, due out on Friday.
Researcher Markit releases its composite reading on the economy at 9:45 a.m. ET. The Institute For Supply Management's Services Index is due out at 10 a.m. ET, along with September factory orders data from the Commerce Department.
The Federal Reserve's Open Market Committee wraps its two-day meeting with a 2 p.m. ET policy announcement and a press conference with Fed Chairman Jerome Powell at 2:30 p.m. ET.
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No changes are expected to the Fed's target interest rate, which has been set between zero and 0.25% since March 2020. But markets widely expect the Fed to launch a program backing away from the $120 billion in monthly bond purchases, with $80 billion in Treasuries and $40 billion in government-backed mortgage securities. These purchases have pumped artificial demand into the bond markets, holding interest rates artificially low.
The Fed has sent plenty of signals preparing markets for the shift in stance. It is unclear to what degree bond and stock markets might react to specifics revealed this afternoon.
IBD 50 Stocks To Watch: Monday.com, Freedom Holding, Progyny
Software developer Monday.com (MNDY) is queued up in a nine-week-old cup base. The overall base offers a buy point at 425.94 — almost 17% above where the stock closed on Tuesday. But the June initial public offering is also four days into a possible handle, which it could complete by today. That would lower the entry to 408.08, or 12% above where shares ended on Tuesday. The IBD 50 stock has gained 136% since its June launch. The company reports its third-quarter results on Nov. 10.
Freedom Holding (FRHC), the Kazakhstan-based security brokerage, ended Tuesday in a buy range after narrowly topping a 68.90 entry in a 17-week flat base. The stock has a year-to-date gain of 28.7%, despite spending 33 of the year's 43 weeks in consolidations.
Progyny (PGNY) is just below a 64.45 handle buy point in what IBD MarketSmith analysis charts as a 19-week-old cup-with-handle base. Earnings are due after the close on Thursday, making this a good time for investors to study up on their options buying strategy.
Nasdaq, S&P 500 And Dow Jones Today: 3 Blue Chip Breakouts
Two days of gains have put the Nasdaq, the S&P 500 and the Dow Jones today on track toward a fifth weekly advance. The would be the longest rally for the Nasdaq and S&P 500 since August. It would be the Dow's longest run up since posting an eight-week rally in early 2019.
Goldman Sachs (GS), Microsoft (MSFT) and American Express (AXP) are the Dow's top-gaining stocks so for this year. Goldman has gained more than 60%. Microsoft is up 49.8%, and American Express has a 43.2% gain.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Goldman Sachs is on close watch this week as it breaks out into a buy zone above a flat-base buy point at 420.86. The stock remains in its buy zone through 441.90.
But over the last four weeks, it's been UnitedHealth Group (UNH) that has spearheaded the Dow's advance, posting a 17.3% gain as the overall industrials climbed 4.3%. UnitedHealth's rise included a breakout past 431.46 buy point in a seven-week flat base. UnitedHealth shares have eased less than 2% so far this week, but remain extended above the base's buy range.
Microsoft was next in line, rising 14.7% during the four-week run. In the process, the IBD Leaderboard listing snapped past a 305.94 flat base buy point. Shares ended Tuesday not quite 9% above that entry.
Nike climbed almost 14% to place third among the Dow industrials. The advance moved the stock well up the right side of a 13-week-old cup base, leaving shares on Tuesday less than 4% below a 174.48 buy point.
You can find Alan R. Elliott on Twitter @IBD_Aelliott
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