Dow Jones Futures Signal Stock Market Rally On President Trump's Prognosis, Stimulus Deal Hopes

05 Oct 2020, 21:03 · Views 476

Dow Jones futures rose solidly Monday morning, along with S&P 500 futures and Nasdaq futures, amid hopes that President Donald Trump is improving and possibly could leave the hospital soon. Stimulus hopes also may be lifting futures.

President Trump said in video posted on Twitter late Sunday that he's "getting great reports from the doctors." He also took a short motorcade ride around Walter Reed Medical Center to wave at his supporters.

Trump could be discharged as soon as Monday, according to one of the doctors on his medical team at Walter Reed. "Our hope is that we can plan for a discharge as early as tomorrow to the White House," said Dr. Brian Garibaldi, in a late Sunday morning briefing.

The president "has continued to improve," said his doctor, Dr. Sean Conley, in Sunday's briefing. "As with any illness, there are frequent ups and downs over the course."

However, Trump is now taking the steroid dexamethasone, Conley said. That suggests that the president's condition is fairly serious. A study showed the steroid could help severely ill coronavirus patients, but hurt those with milder cases. Then again, President Trump may be urging more-aggressive treatments.

The president also is continuing a five-day course of the antiviral Remdesivir from Gilead Sciences (GILD). The antiviral has been shown to help reduce hospitalization times.

The White House and doctors provided a little more detail on Trump's condition currently and going back to Friday morning, after conflicting messages raised doubts about the president's status.

Conley confirmed other accounts that the president was given supplemental oxygen for about an hour Friday morning as his blood oxygen levels fell and his fever spiked to a "high" level. Conley wouldn't say how low the blood oxygen levels got.

Trump went to Walter Reed Medical Center on Friday evening.

The doctors also said Sunday that Trump's lung scans show "expected findings," but didn't say if there was any damage.

Saturday's Mixed Messages

On Saturday, Conley wouldn't say if Trump had received oxygen, only that he wasn't currently receiving it.

Minutes after Dr. Conley's upbeat Saturday assessment, a source familiar with Trump's health told White House pool reporters that "the president's vitals over the last 24 hours were very concerning and the next 48 hours will be critical in terms of his care." The person, who apparently was White House chief of staff Mark Meadows, added, "We're still not on a clear path to a full recovery."

A few hours later, Meadows had a far more-positive assessment: "The president is doing very well," he told Reuters. "The doctors are very pleased with his vital signs."

Also, at the Saturday briefing, one of the doctors said Trump was doing well "72 hours" after diagnosis, but that would imply the president tested positive by Wednesday midday. That was significantly earlier than the White House had previously indicated. The White House said the doctor misspoke.

Trump Risk Factors

President Trump is being treated by some of the top medical professionals in the country. Still, Trump is 74 and overweight, putting him at higher risk from the coronavirus. It is less than one month from Election Day in the middle of a fragile economic recovery and negotiations over a new coronavirus stimulus bill.

Stimulus Bill

Politico reported that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin consulted Federal Reserve Chairman Jerome Powell about their stimulus talks. The Fed played a role in the first coronavirus stimulus plan.

Trump tweeted Saturday that America needs a new stimulus deal, urging Congress to reach an agreement soon: "Work together and get it done."

Stock Market Reaction To Trump Coronavirus News

On Friday, the stock market rally suffered losses, especially on the Nasdaq, after the president tweeted that he and first lady Melania Trump had contracted the coronavirus.

The market hates uncertainty, especially when headlines can send the major indexes sharply in either direction. So it's not a surprise that the stock market rally is flashing healthy and sickly indicators.

The Dow Jones staged a follow-through day on Wednesday to confirm the new stock market rally amid stimulus deal hopes. The S&P 500 index and Nasdaq composite also had solid gains but not enough for their own follow-through days. On Friday, stocks sold off on the Trump coronavirus bombshell. The Nasdaq was the big laggard, falling back below its 50-day moving average along with the S&P 500 index. But the Dow limited its losses.

Meanwhile, many leading stocks broke out or were setting up last week, even on Monday. Twilio (TWLO) and LGI Homes (LGIH) cleared buy points Friday, reflecting strength in many software and housing stocks.

Big-Cap Techs Struggle

But some megacap stocks had a tough time. Apple stock, Amazon.com (AMZN) and Microsoft (MSFT) all fell back below their 50-day lines. Adobe (ADBE) and Nvidia were big tech losers, but held their 50-day lines. Tesla (TSLA) tumbled following its Q3 delivery figures, though it held its 21-day exponential moving average.

Nvidia stock, Adobe, Microsoft, LGI Homes and Tesla are on IBD Leaderboard. Microsoft stock and Adobe are on IBD Long-Term Leaders. Amazon stock, Adobe, Nvidia and Microsoft are on the IBD 50.

Dow Jones Futures Today

Dow Jones futures rose 0.7% vs. fair value. S&P 500 futures climbed 0.7% and Nasdaq 100 futures advanced 0.7%.

Futures could swing dramatically overnight on headlines about President Trump's health.

Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.

Coronavirus News

Coronavirus cases worldwide reached 35.44 million. Covid-19 deaths topped 1.04 million.

Coronavirus cases in the U.S. have hit 7.63 million, with deaths above 214,000.

New York City on Wednesday will close schools and nonessential businesses within nine ZIP codes with rising positive test rates as the city tries to head off another coronavirus wave.

President Trump and his wife tested positive for the coronavirus after White House aide Hope Hicks did. Trump campaign manager Bill Stepien has the coronavirus. Also, former White House counselor Kellyanne Conway confirmed Friday night that she has Covid-19. GOP Sens. Mike Lee, Ron Johnson and Thom Tillis also recently tested positive for the coronavirus. So did former New Jersey Gov. Chris Christie.

Nearly all of these people were connected to the White House announcement for the Supreme Court nomination on Sept. 26 or Tuesday's presidential debate.

Joe Biden has tested negative for Covid-19. So have Vice President Mike Pence and House Speaker Nancy Pelosi.

In addition to Gilead's Remdesivir and now the steroid, Trump on Friday, he took an experimental antibody cocktail from Regeneron Pharmaceuticals (REGN).

Regeneron stock rose 5% early Monday on news that Trump had taken its coronavirus antibody cocktail, which has not yet had late-stage trials. Gilead stock climbed 3%.

Stock Market Rally Last Week

The coronavirus stock market rally ended last week with solid advances, but finished poorly.

The Dow Jones Industrial Average closed up 1.9% in last week's stock market trading, not giving up much ground on Friday. The S&P 500 index and Nasdaq composite rose 1.5%. But they slashed weekly gains on Friday and closed back below their 50-day lines.

Among the trillion-dollar stocks, Apple rose 0.7% last week, but fell 3.2% to drop back below its 50-day line. Microsoft shed 0.8% on Friday and nearly 3% for the week. Amazon stock gained 1% for the week, but lost 3% on Friday.

Adobe stock and Nvidia both sank 4.1% on Friday, with the former losing 0.2% for the week while the latter clung to a 1.5% gain.

Twilio, LGI Homes Soar

Meanwhile, Twilio stock surged 18% last week, including a 13% pop to 290.36, clearing a 283.43 buy point from a double-bottom base. The communications software maker said late Thursday it would top its third-quarter sales target. At Thursday's investor day event, Twilio said it expects sales growth to exceed 30% in each of the next four years. Wall Street had forecast 25% growth in 2021 and 23% in 2022.

LGI Homes stock climbed 2.5% on Friday, clearing a 124.04 buy point, according to MarketSmith. Shares sprinted 17% last week. Several other homebuilders are in or near buy zones.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rose 2.1% last week. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 0.9%. While some software stocks did well on Friday, Microsoft and Adobe stock are IGV's top two holdings. The VanEck Vectors Semiconductor ETF (SMH) climbed 2.3%.

Tesla Stock

Tesla stock was up strongly through Thursday, but tumbled 7.4% on Friday. Still, it held its 21-day line and closed the week 1.9% higher. Tesla deliveries came in at a record 139,300, officially beating lowered views. But there were widespread expectations of more than 140,000.

In recent months, Tesla stock rose in part on expectations of bullish catalysts. But S&P 500 inclusion so far hasn't happened, Battery Day failed to wow (or at least justify certain analysts' visions) and now Q3 deliveries were at best in line. Shares fell in all three cases. On the other hand, TSLA stock, despite wild volatility, has held up better than many big-cap techs.

Tesla rose 1% early Monday.

Stock Market Analysis

A confirmed stock market rally is still valid until it undercuts its low. For the Dow Jones, that is its Sept. 24 low. It's a bad sign for a newly confirmed stock market rally to close below the low of its follow-through day. The Dow fell below its Sept. 30 low on Friday, but closed well above it. The Nasdaq did close below its Sept. 30 low, but that index hasn't had a FTD.

As for leading stocks, there have been plenty of quality names breaking out and setting up, even if the likes of Apple and Microsoft are more sluggish.

It's hard to analyze a stock market that's so headline-driven. Stimulus deal talk fueled the rally, and now President Trump's coronavirus diagnosis triggered selling.

If Trump's condition worsens over the weekend and coming days, the stock market rally could come under pressure. If he's on the mend, the market may quickly rebound.

Investors would still face of gantlet of uncertainty, including the election, stimulus deal talks and coronavirus wave fears vs. Covid-19 vaccine hopes.

Step Cautiously

For now, it's a confirmed stock market rally and a number of leaders are actionable, so investors can make buys. But the mixed signals and heightened uncertainty suggest this is a time for moderate exposure. Don't go heavily into margin.

Reprinted from yahoofinance, the copyright all reserved by the original author.

#DOW##StockMarket##TrumpTestedPositive##US#

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.