Futures Lower As Evergrande Misses Payment, Bitcoin Tumbles

Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were lower early Friday, as China Evergrande missed a key interest payment. Bitcoin tumbled on China’s crackdown. Apple and Tesla shares took a breather from their recent rebounds in early morning trade. Nike (NKE) dived after missing sales estimates.


Among the Dow Jones leaders, Apple (AAPL) lost 0.7% premarket Friday, while Microsoft (MSFT) moved down 0.3% in today’s stock market. Salesforce (CRM) is in buy range following Thursday’s strong breakout.

Tesla (TSLA) dropped 1% premarket Friday, on pace to snap a three-day win streak. The stock is just above its latest buy point. Coinbase (COIN) and Roku (ROKU) skidded ahead of the market open.

Among the top stocks to buy and watch, Chipotle Mexican Grill (CMG), Deckers Outdoor (DECK) and Snap (SNAP) are in or near new buy zones.

Deckers, Microsoft and Tesla have been named Leaderboard stocks by Investor’s Business Daily. Chipotle was featured in this week’s Stocks Near A Buy Zone column. Snap is an IBD SwingTrader stock and featured as Wednesday’s IBD Stock Of The Day.

Dow Jones Today: China Evergrande

Ahead of the stock market open Friday, Dow Jones futures lost 0.4% vs. fair value, while S&P 500 futures moved down 0.5%. Nasdaq 100 futures declined 0.65% vs. fair value.

Evergrande let a Thursday deadline pass to pay a $83.5 million coupon payment on its U.S. dollar bonds without notifying bondholders. Despite missing the payment deadline, the company has a 30-day grace period before the bondholders can signal a default. The Wall Street Journal reported Thursday that China is asking local governments to prepare for the potential failure of property developer China Evergrande Group.

Among exchange traded funds, Innovator IBD 50 (FFTY) had yet to start trading premarket Friday. Nasdaq 100 tracker Invesco QQQ Trust (QQQ) lost 0.6%. And the SPDR S&P 500 ETF (SPY) moved down 0.4%.

Stock Market Regains Key Benchmark

The Nasdaq and S&P 500 decisively regained their 50-day lines Thursday, while the Dow Jones Industrial Average logged two straight days of solid gains. The blue-chip index remains below its 50-day line.

Thursday’s The Big Picture commented, “The IBD 50 gave an early sign that the stock market’s slide may be brief. The index gapped down in Monday’s global sell-off but found support at the 50-day moving average. It rebounded quickly, rising the next two days. On Thursday, the IBD 50’s outperformance shined even brighter, as the index roared 1.5% and came close to a new high.”

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Dow Jones Stocks To Buy And Watch: Salesforce

Dow Jones leader Salesforce in the 5% buy range past a cup with handle’s 275.32 buy point following Thursday’s breakout move. The buy area goes up to 289.09. Shares rose nearly 1% in premarket trade.

Through Sept. 22, Salesforce is the No. 7-performing stock on the Dow Jones industrials this year. Year to date, CRM stock has climbed 24.9%. The No. 1 performer is Goldman Sachs (GS) with a 48.6% advance through Thursday’s close.

Dow Jones Earnings: Nike

Dow Jones retailer Nike is tracing a flat base with a 174.48 buy point, according to IBD MarketSmith chart analysis. But shares closed Thursday below their key 50-day moving average line even after a three-day win streak.

Nike’s earnings report was mixed late Thursday. Nike earnings rose 22% vs. a year earlier to $1.16 per share. Sales grew 16% to $12.2 billion. Shares dived about 5% premarket Friday.

Stock Market Earnings: Costco

After the close Thursday, Costco (COST) reported strong fiscal fourth-quarter results. Costco earnings rose 7% vs. a year earlier to $3.90 a share adjusted, above estimates for $3.58. Revenue including membership fees rose 17% to $62.675 billion. That beat estimates for $61.4 billion. Same-store sales grew 15.5%, above FactSet estimates for a 12.4% gain.

Costco stock pulled back to its 10-week level this week, where it is seeking support. Shares are about 16% above a 389.55 buy point in a cup with handle. The stock rose nearly 1% ahead of the open.

Stocks On The Move: Coinbase, Roku

Cryptocurrency exchange Coinbase declined 3.5% premarket Friday, as the price of Bitcoin tumbled 5% over the last 24 hours, according to Coindesk. Bitcoin traded around $41,200 Friday morning. Early Friday, China’s central bank cracked down on cryptocurrencies, saying all cryptocurrency transactions are illegal. “Financial institutions and non-bank payment institutions cannot offer services to activities and operations related to virtual currencies,” The People’s Bank of China said on its website Friday.

Roku stumbled nearly 3% Friday morning after Wells Fargo downgraded the stock from overweight to equal weight due to rising competition. Shares closed Thursday more than 30% off their 52-week high.

Stocks To Buy And Watch: Chipotle, Deckers, Snap

Friday’s IBD Stock Of The Day, Chipotle Mexican Grill, is rebounding from its 50-day moving average. Shares were unchanged premarket Friday. The burrito chain has been trading tightly following a post-earnings jump July 21. Look for continued support around its 10-week line, which would be bullish for the stock’s prospects during the current market weakness. Positively, the stock’s relative strength line is at new highs.

According to IBD Stock Checkup, CMG stock boasts a perfect 99 IBD Composite Rating. The rating measures a blend of fundamental and technical characteristics.

IBD SwingTrader stock Snap is trading just below a flat base’s 80.95 buy point following three straight days of solid gains. Shares lost about 0.5% premarket Friday.

IBD Leaderboard stock Deckers Outdoor is trying to break out past a 444.58 entry in a flat base, according to IBD MarketSmith, but is about 3% below the entry following Thursday’s 0.5% gain. Shares lost about 1% premarket Friday. Per Leaderboard commentary, the top retail stock is below a mini-trendline entry near 433 that provided an early buy point. Its relative strength line is also near new highs.

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Tesla Stock

Tesla stock lost 1% premarket Friday, on pace to snap a three-day win streak. Shares remain in buy range above the stock’s latest buy point at 730. Shares also above their 700.10 aggressive buy point deep inside a correction. Meanwhile, a deep, large base continues to take shape.

On Jan. 25, Tesla stock hit a record high of 900.40, after climbing as much as 93% from a 466 buy point in a cup-with-handle.

Dow Jones Leaders: Apple, Microsoft

Among the top Dow Jones stocks, Apple moved down 0.7% premarket Friday, on pace to give back the entirety of Thursday’s 0.7% gain. Despite a three-day win streak, the stock is still below the 50-day line. On Monday, Apple stock hit its lowest level since early July.

Software giant Microsoft fell 0.3% premarket Friday, as the stock continues its rebound from the 50-day line. On Monday, shares briefly traded below their 50-day line for the first time since a June 21 breakout above a 263.29 buy point before closing just above it.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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