Stock futures edged up early Friday, as investors played cards close to the chest ahead of the June payrolls report. Markets were also waiting on an oil production decision from OPEC and Q2 deliveries news from Tesla. Meanwhile, a rebounding Walgreens boosted the Dow Jones today.
Nasdaq 100 futures led, rising 0.3% in early trade. S&P 500 futures traded 0.1% above fair value. Dow Jones futures defended a fractional gain, as JPMorgan (JPM) and Cisco Systems (CSCO) dipped to the bottom of the index.
Tesla (TSLA) traded up 0.5%, placing it high on the S&P 500 in the lull before the payrolls report. Investors are still waiting on the EV industry star to report Q2 production and delivery numbers. China-based EV makers Nio (NIO) and Xpeng Motors (XPEV) reported sales Thursday and Li Auto (LI) gave strong numbers on Friday.
IBD 50 stock Cerence (CRNC) jetted 9% higher, after Standard & Poor’s announced late Thursday the stock would be added to the S&P MidCap 400 beginning on Wednesday. The maker of automotive software ended Thursday about 11% below a 120.10 buy point in a cup-with-handle base.
Virgin Galactic (SPCE) soared 28% after the company scheduled the first fully crewed flight of its SpaceShipTwo space plane, including company founder Richard Branson, on July 11. Virgin shares were down almost 23% for the week through Thursday.
Biotech Alector (ALEC) bolted 12% after announcing it would partner with GlaxoSmithKline (GSK) to develop two treatments targeting Alzheimer’s and other neurodegenerative diseases. The $700 million deal includes another $1.5 billion in potential milestone payments, linked to trial results.
Wireless services provider Shenandoah Telecommunications (SHEN) rallied 8.7% in early trade. The Edinburgh, Va., company declared a special dividend of $18.75 a share, after closing the $1.95 billion sale of its ShenTel wireless business to T-Mobile U.S. (TMUS) on Thursday.
Dow Jones Today: Walgreens, JPMorgan
Walgreens Boots Alliance (WBA) bounced 0.6% to lead the Dow Jones today, following its 7.4% post-earnings nosedive on Thursday. At least three analysts lowered price targets on the stock early Friday.
JPMorgan hung at the bottom of the Dow, down 0.6% ahead of the early payrolls data. JPMorgan shares are up almost 24% for the year, even after a two-week breakdown in June. But the stock is below its 10-week moving average, with no proper buy point in sight.
June Payrolls Report
Economists expect the Labor Department’s June payrolls report to show an acceleration in hiring to 675,000 new workers, following a gain of 599,000 new jobs in May. The consensus estimate for the jobless rate is 5.7%, down from 5.8%. The report is due at 8:30 a.m. ET.
Monthly payrolls roundups from the Labor Department are always closely watched reports. They have become even more so in the recovery from the Covid-19 shutdowns, as employers struggle to find workers, and workers fight to get jobs as the economy feels its way toward a new normal.
The reports have struck even more vital notes for markets, following the Federal Reserve’s shift in strategy to link policy action to employment data. That shift, away from the more abstract 2% inflation gauge traditionally used by the Fed as its policy guardrail, may be giving jobs and hiring data an even more immediate influence over financial markets.
Stocks To Watch: Investment Bankers, IPOs
Investment bankers are among the top names to watch on the IBD 50 list for Friday. Cowen (COWN) is 4% below a 43.27 buy point in what IBD MarketSmith analysis labels a 14-week consolidation. B. Riley Financial (RILY) is less than 2% below a 79.05 entry. Jefferies Financial Group (JEF) is 3% from a 34.95 proper buy point, although aggressive investors might opt to get in early using an alternative entry at 34.52.
IPO stocks to watch for Friday include China’s Didi (DIDI), which reversed early gains and dived almost 9% in premarket action after Beijing announced a cybersecurity probe. The ride-hailing network had posted a 14% gain in its first two days of trade. Shares of Pop Culture Group (CPOP) rallied almost 20% ahead of its third day of trade. The stock ended Thursday almost 900% over Wednesday’s initial offering price.
Vital Signs: Oil, Bitcoin, Bond Yields
Oil prices remain front and center on the market radar, after the Organization of Petroleum Exporting Countries and partners led by Russia delayed their meeting to discuss production strategy until Friday. U.S. benchmark West Texas Intermediate hovered just above $75 a barrel early Friday, up not quite 55% since the start of the year. BakerHughes weekly rig count census, due out at 1 p.m. ET, could also have an influence on oil prices.
Bitcoin leveled off at around $33,000, according to CoinDesk, after reaching above $40,000 in mid-June and diving below $29,000 on June 22.
Bonds remained highly active ahead of the payrolls report. The 10-year Treasury bond yield dipped to 1.44% early Friday, after settling Thursday at 1.48%. Yields ended Thursday down about 3.7% for the week, and tracking toward the sixth decline in the past seven weeks.
The bond market will close early, at 1 p.m. ET on Friday, ahead of the holiday weekend. Stock markets will remain closed on Monday in observance of the July 4 holiday.
Dow Jones Today: A 42% YTD Gain
Walgreens stock broke down after its fiscal third-quarter report on Thursday, in a steep bout of profit taking for what had been one of the Dow’s highest fliers of the year. Walgreens shares entered the session up almost 32% for the year, trailing only Goldman Sachs (GS) and American Express (AXP) among the industrials’ top advancers.
On the Dow Jones today, Goldman Sachs enters the session with a year-to-date gain of 42%. The stock is angling toward a second weekly rebound following a sharp two-week pullback. It has regained its 10-week moving average, and is technically poised to retake a three-weeks tight buy point at 377.08.
On the blue chip watchlist for Dow Jones stocks in bases, Microsoft (MSFT) is working to complete the sixth week of its rebound to new highs. The stock remains in a buy range above a 263.29 entry. The buy zone runs to 276.45.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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