Stocks let back early losses Friday, with the Dow showing some early resilience as earnings news fueled some dramatic early moves. PayPal jumped on management commentary. Vocera set up in a possible rebound of support. Canada’s GreenPower peaked on an EV deal with a Warren Buffett company. Disney shares faded today on the Dow Jones, despite the number of subscribers for its Disney + service approaching the 100 million mark.
X
The Dow moved higher and then dropped back to 0.1%. The S&P 500 was trading less than 0.1%. The Nasdaq Composite limited its opening drop to 0.2% in today’s stock market as FANG stocks are generally lower and DexCom (DXCM) sank to the bottom of the Nasdaq 100 after a lost win.
Illumina (ILMN) rallied at the head of the Nasdaq 100, up more than 10% after fourth-quarter earnings and sales beat late Thursday. IBD Leaderboard Stock PayPal Holdings (PYPL) climbed 3% as at least nine analysts raised price targets following positive comments from management on Thursday.
Mobile communication plays Spokeswoman (VCRA) rebounded strongly after 10 weeks of support, up 10% after the fourth quarter report late Thursday. Biotech Immunogenic (IMGN) jumped 17% higher on revenues.
New IPO Bumble (BMBL) was up 5.7%, after an increase of more than 63% on the first day of trading on Thursday. Aurora Cannabis (ACB) was down 5.1%, despite reporting above expected second-quarter results for the second quarter on Thursday.
Dow Jones Today: Disney Earnings
Walt Disney (DIS) lost its premarket profit and fell 1.5% on the Dow Jones today after a solid fiscal performance in the first quarter. Disney + subscribers rose to 94.9 million on January 2, up 9% from 86.8 million on December 2 and 258% from a year ago. The monthly rate for US subscribers will increase from $ 1 to $ 7.99 per month in March.
IBD Live: a new tool for daily stock market analysis
Streaming video has helped make up for some of the loss of theme parks and movie theaters closed due to the coronavirus pandemic. Disney’s revenues are now down three quarters in a row. Earnings are now down nine consecutive quarters, and in two consecutive years.
Meanwhile, Disney stock cleared a buy point of 183.50 on a flat basis on Monday. Shares still ended in a buy range running as high as 192.68 on Thursday.
Income news: Hubspot, GreenPower
HubSpot (HUBS) snapped 17% higher and left a buy reach after it crossed a buy point on a cup basis on Monday. The CRM software developer reported fourth quarter earnings and revenue well above analyst expectations and raised expectations for the first quarter. If the premarket move holds through the open, the stock would expand beyond its buy range and the eight-week hold rule will be triggered.
Raymond James and Mizuho have upgraded the stock. Piper Sandler raised his target price from 488 to 600. HubSpot was featured in IBD’s New Highs segment on Monday.
British Columbia established GreenPower engine (GP) was up 6.4% in early action. The maker of electric buses for commercial fleets reported third quarter fiscal results and also announced a deal to sell 150 cabs and chassis to Forest River RV, a division of Warren Buffett’s Berkshire Hathaway (BRKB).
The units, due to be delivered in the first quarter, will form the basis for a line of Forest River electric shuttle buses and utility vehicles, the companies said.
GreenPower shares ended up 44% higher Thursday than the close on their first day of public trading in August.
Included other stocks moving for profit 2U (HOLE), Cognex (CGNX), Vocera and J2 Global (JCOM). American ash and production (AXL) was up 6.6% after Friday’s report.
PayPal withdrawals for 750 million users
PayPal held its annual investor day on Thursday – virtually, of course. Chief Executive Dan Schulman said the company could have 750 million active accounts by 2025, up from 377 million at the end of the fourth quarter. Factors including installment and in-store payment options and cryptocurrency trading are driving increasing engagement trends and as a result, the CEO said, saw the company “begin to bend and accelerate historic engagement curves.”
Shares of IBD 50 and Leaderboard declined on February 4, following the fourth quarter earnings report. The shares are renewed, about 32% higher than in December.
Dow Jones today: chasing small caps, growth stocks
The Dow Jones is heading to the starting bubble today, up 0.9% for the week and on top of new highs. The S&P 500 has a gain of 0.8%. The Nasdaq is up 1.2% despite a modest loss on Thursday. The Nasdaq and S&P 500 are also at new highs.
Small caps and growth stocks performed by a wide margin. Both the Russell 2000 and Innovator IBD 50 ETF (FFTY) gained 4.2% through Thursday. The number of escape targets may be declining, but the outbreaks themselves are generally holding up well and the earnings season action has been largely positive.
For a more detailed analysis of the current stock market and its status, study the big picture
But it’s important to note that the Russell is now trading more than 38% above its 200-day moving average – the highest levels in the index’s history. The Russell peaked at 32% above his 200-day limit, 15.2% above his 50-day limit on March 10, 2000, just as he rolled into the dot-com bust.
The Nasdaq was 17% above its 50-day line at the time. So while the Russell looks a bit overheated, the Nasdaq’s current 7.5% margin over 50 days looks tame by comparison. Still, margins of more than 6% over 50 days on the Nasdaq usually indicate a downturn, or at least periods of flat trading that could allow the moving averages to catch up.
This and a number of other warning flags hovering above the “confirmed uptrend” status of the market give investors good reason to remain cautious and alert.
Following the energy / transport paradigm shift
Paradigm shift is always a dangerous term. As soon as investors begin to buy new or reconfigured horizons for both the US and the global economy, the new paradigms tend to collapse or fade, and markets return to the status quo.
However, the stock market, the US, and the global economy have gone through a surprising number of paradigm shifts since the turn of the century. The emphatic rise of the Chinese economy, smartphones, oil shale and natural gas, and social media are just a few examples of massive industrial / economic shifts over the past 20 years.
Receive alerts for stocks close to buying points with IBD SwingTrader
Now the stock market appears to be reflecting a new, even greater revolution as the energy and transportation markets enter a post-fossil fuel era. Solar, electric autonomous vehicles, battery storage, fuel cells, hydrogen and other technologies are all reaching competitive levels of cost-effectiveness and efficiency for the first time. The world’s largest investors and funds recognize this and are steering a tectonic shift in global capital.
Reflecting the value of such a shift is hard work and unknown territory for the stock market. And right now, that seems to be driving, at least in part, the kind of unusual, extended map behavior we’re seeing with the Nasdaq and the Russell 2000.
Find Alan R. Elliott on Twitter @BuienRadarNL
YOU MAY ALSO LIKE THIS:
Why This IBD Tool Simplifies the Search for Top Stocks
Best growth stocks to buy and keep an eye on
IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today