Stock futures shifted lower Monday despite strong action in several market areas. Media names rallied on news of an AT&T/Discover combination. China-based names dominated the Nasdaq 100. Trade was relatively quiet on the Dow Jones today, as Walmart, Home Depot and Cisco Systems prepare to deliver earnings this week.
Dow Jones futures dropped 0.4% as Apple (AAPL) dragged 0.5% at the bottom of the index. S&P 500 futures also traded 0.4% below fair value. Nasdaq 100 futures slipped almost 0.5% on the stock market today.
Discovery (DISCA) ran far ahead on the S&P 500, spiking more than 18% after confirmation that AT&T (T) would combine its Warner Media division with the Silver Spring, MD.-based company. The deal would provide $43 billion to AT&T, and would leave AT&T shareholders holding 71% of the new company. AT&T shares rose 4.6%. ViacomCBS (VIAC) surged 3.2%. Comcast (CMCSA) dropped 1.6%.
Trade was otherwise relative quiet across the S&P 500 list. Tesla (TSLA) lagged at the bottom of the index, down 1.6% in morning trade.
On the Nasdaq 100, China’s Trip.com (TCOM) led the index with a 3.2% gain. Morgan Stanley upgraded the travel-booking site to overweight, with a price target at 50, on an outlook for normalizing travel markets.
China-search giant Baidu (BIDU) rose 1.3%. A regulatory filing late Friday showed Soros Fund Management reported Baidu, Vipshop Holdings (VIPS) and Tencent Music Entertainment (TME) among its new buys during the first quarter.
Scooter maker Niu Technologies (NIU) gained 3% after reporting first-quarter results. Tencent Music gained 2.4% following its quarterly results.
Dow Jones Today: Apple Stock Drags
Apple dropped 0.5% to the bottom rung on the Dow Jones today. Shares fell 2.1% last week to 127.45, but found support at their 200-day moving average, then reclaimed the 50-day line on Friday.
The stock ended Friday 7.6% below a 137.17 cup-with-handle buy point. An aggressive trader might see AAPL stock as being on the cusp of an early entry from the 50-day line and breaking a downtrend in its handle.
But Apple’s relative strength rating is a weak 47, and its RS line is just off 2021 lows, showing that it’s not a leader right now.
IBD 50: B. Riley, Evercore, Ameris Near Entries
On the IBD 50 list, PLBY Group (PLBY) hopped almost 13% higher, apparently on NFT (non-fungible tokens) speculation related to the company’s collection of nude photos and artwork. PLBY spiked 16% on Friday, sending shares back above their 21-day moving average.
Among IBD 50 stocks near buy points, B. Riley Financial (RILY) is just below a 74.10 entry in a three-weeks-tight pattern. Ameris Bancorp (ABCB) is just below a 57.91 buy point in an eight-week cup base. Evercore (EVR) is in a buy range over a 144.23 buy point — the buy zone runs to 151.44.
Bitcoin Veers Lower On Musk Tweet
Bitcoin collapsed to just above $42,000, its lowest mark since February, early Monday, before retaking some ground to above $45,000, according to CoinDesk. Tesla Chief Executive Elon Musk implied in a Sunday tweet that Tesla might have sold or will sell its remaining Bitcoin. He tweeted early Monday that Tesla has not sold further Bitcoin so far.
The cryptocurrency had run up to a new high above $64,800 on April 14. Bitcoin is down more than 22% so far in May, but remains up about 55% since Dec. 31, after starting the year just above $29,000.
Vital Signs: Oil, Copper, Bond Yields
West Texas Intermediate oil prices held steady around $65 a barrel — up 34.5% so far this year, but down from the $66.76 high from May 5, and well off the 33-month high of $67.98, recorded on March 8.
Copper added 0.3% to around $4.67, after climbing to new record territory above $4.78 per pound last week. Copper broke past its previous record, set in February 2011, on May 5.
The 10-year Treasury yields was at 1.63%, down from the CBOE settle of 1.66% on Friday. April inflation data tripped a surge in the 10-year to above 1.69% on Wednesday. Yields had skirted pre-pandemic levels late in March, climbing to almost 1.76%, the highest level since January 2020.
Dow Jones Today: Walmart, Home Depot Earnings
Wrapping up the Dow industrials’ March-quarter earnings calendar this week are Walmart (WMT), Home Depot (HD) and Cisco System (CSCO). Walmart and Home Depot report first-quarter results first thing Tuesday morning. Cisco reports its fiscal third quarter after Wednesday’s close. That leaves all of the 30 Dow components accounted for after the quarter, except for Nike (NKE), which runs on a staggered calendar and will report later in June.
Home Depot staged a steep pullback last week, sending the Home Depot stock almost to its 50-day moving average. The move stopped a bit short for a possible rebound from 10-week support. But it also put shares back below a 38.93 buy point in a three-weeks-tight pattern. Analysts expect Home Depot to post EPS of $2.91, a 40% jump, as sales rise 21% to $34.1 billion.
Walmart stock is struggling to regain support at its 200-day moving average, after a quick dip to test support at its 50-day line. Wall Street expects Walmart to earn $1.21 per share, up 3%, as revenue slips 3% to $131.31 billion.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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