fundamental News - DJI5R
Dow Jones futures rose solidly late Wednesday along with S&P 500
futures and Nasdaq futures, with Snowflake stock and other software
earnings in focus overnight. The stock market rally suffered a bearish
reversal Wednesday after the CDC confirmed the first
U.S. case of the omicron Covid variant, in California.
expectation today: bearish
The major indexes opened by bouncing above or from key levels, only
to break moving averages on the downside. Decliners beat advancers
easily after a promising start for market breadth.
Bottom line: The stock market rally is under increasing pressure. Investors should take a more defensive stance.
Megacap techs Apple (AAPL), Microsoft (MSFT) and Google parent
Alphabet (GOOGL) led the morning rally, but even they gave up gains to
close fractionally lower. Chipmakers started strong with Ambarella
(AMBA) skyrocketing on earnings. But several breakouts
faltered with the afternoon sell-off.
Meanwhile, ugly action continued for software stocks.
Salesforce.com (CRM) dived on weak forecasts. Zscaler (ZS), the clear
cybersecurity leader in recent weeks, reversed lower despite strong
results and guidance.
Dow Jones Futures Today
Dow Jones futures climbed 0.8% vs. fair value. S&P 500 futures rose 0.7% and Nasdaq 100 futures advanced 0.7%.
Remember that overnight action in Dow futures and elsewhere doesn't
necessarily translate into actual trading in the next regular stock
market session.
Omicron Variant Case In U.S.
While it's no surprise, the omicron Covid variant has reached the
U.S. The CDC announced that an omicron case in California has been
found. The patient returned on Nov. 22 from South Africa, where the
omicron variant was first detected, and tested positive
on Nov. 29. The World Health Organization said on Wednesday that
omicron has been reported in at least 23 countries.
The California omicron patient had been vaccinated, but had not yet
received a booster shot, the CDC said. The patient has mild symptoms so
far.
It may be another two weeks or so before health officials have a
grasp on how transmissible the omicron variant is, said White House
chief medical advisor Dr. Anthony Fauci. Coronavirus vaccine makers also
may give an indication by then on how effective
their treatments are in stopping omicron infections and limiting
hospitalizations.
Moderna (MRNA) tumbled 12% on Wednesday, below its 50-day line.
BNTX stock gave up 4.9%. BioNTech (BNTX) vaccine partner Pfizer (PFE)
rallied 1.8%.
New York Fed President John Williams said Wednesday the omicron
variant could slow economic growth while increasing inflationary
pressures. This quasi-stagflation warning echoed Fed chief Jerome
Powell's comments to Congress on Tuesday. Powell also said
he was open to talking about speeding up the bond taper at the Fed
meeting on Dec. 14-15.
Coronavirus cases worldwide reached 263.73 million. Covid-19 deaths topped 5.24 million.
Coronavirus cases in the U.S. have hit 49.57 million, with deaths above 805,000.
Stock Market Rally
The stock market rally started off with strong, broad gains, but
reversed to close at session lows as omicron variant fears returned.
The Dow Jones Industrial Average fell 1.3% in Wednesday's stock
market trading. The S&P 500 index retreated 1.1%. The Nasdaq
composite slumped 1.8%. The small-cap Russell 2000 skidded 2.3%.
Apple stock hit a record high, but reversed for a 0.3% drop, and
has become increasingly extended from a Nov. 17 breakout. Apple has told
suppliers than iPhone demand has waned as holidays near, Bloomberg
reported. That follows an analyst report that Apple's
iPhone demand surged in China during Octobe.
Microsoft stock dipped 0.15%. Google stock sank 0.6% after retaking its 50-day line and coming right up to an early entry.
Crude oil futures rose more than 4% intraday, but closed down 0.9%
at $65.57 a barrel. The 10-year Treasury yield nearly hit 1.5% intraday
but closed down 1 basis point to 1.43%.
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