Dow Jones Futures: Stock Market Rally Rides Stimulus Deal Buzz, Twilio Soars Late; Jobs Report, Tesla Deliveries On Tap – Investor's Business Daily

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Dow Jones futures fell early Friday, along with S&P 500 futures and Nasdaq futures, after President Donald Trump tested positive for the coronavirus just one month before Election Day. That comes amid ongoing stimulus talks and ahead of the August jobs report and Tesla (TSLA) deliveries for the third quarter.


Shortly after midnight, President Trump tweeted shortly after midnight that he and first lady Melania Trump tested positive for Covid-19 and would both quarantine.

President Trump and Melania took coronavirus tests after White House aide Hope Hicks, who had recently traveled with Trump, tested positive for Covid-19. Trump and his wife reportedly are feeling fine. But President Trump is 74 years old, putting him at higher risk from the coronavirus. Democratic nominee Joe Biden is 77.

Trump has cancelled all public events, including a Florida rally on Friday. Normal quarantine protocol could keep him isolated for 10 days.

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Dow Jones Futures Today

Stock market futures tumbled on the Trump coronavirus news. Dow Jones fell 1.1% vs. fair value. S&P 500 futures sank 1.3%. Nasdaq 100 futures lost 1.6%.

That suggests that much of this week’s solid stock market gains could be wiped out at Friday’s open.

Treasury yields also fell sharply. Remember that premarket action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Stimulus Talks, Jobs Report, Tesla Deliveries In Focus

Friday was already set to be a big day. Coronavirus stimulus talks, which have fueled the stock market this week, are likely to continue, but the two sides are far apart. The Democrat-led House went ahead and passed a $2.2 trillion stimulus plan.

It’s unclear if Trump testing positive for the coronavirus will affect stimulus talks. Treasury Secretary Steven Mnuchin has been leading negotiations with House Speaker Nancy Pelosi.

The Labor Department will release its September jobs report at 8:30 a.m. ET, likely swinging Dow Jones futures. Economists expect nonfarm payrolls to rise by 894,000, with the unemployment rate dipping to 8.2% from August’s 8.4%. This is the last jobs report before Election Day.

Tesla delivery and production figures could come any day, with Friday morning seen as most likely.

Communications software leader Twilio (TWLO) gave bullish guidance late Thursday. Twilio stock jumped overnight to near a buy point.

Meanwhile, Pool Corp. (POOL) will join the S&P 500 index, replacing E-Trade Financial (ETFC), which is being acquired by Morgan Stanley (MS). But Pool stock, which is setting up near a buy point, edged lower overnight.

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Coronavirus News

In addition to the President Trump coronavirus bombshell, (AMZN) said late Thursday that nearly 20,000 employees have contracted the coronavirus during the pandemic. The e-commerce giant says its Covid-19 testing has been ramping up, with 50,000 per day planned by November.

Coronavirus cases worldwide reached 34.51 million. Covid-19 deaths are at 1.02 million.

Coronavirus cases in the U.S. have hit 7.49 million, with deaths above 212,000.

Stock Market Rally Thursday

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 27817.37 +35.67 +0.13
S&P 500 (0S&P5) 3380.76 +17.76 +0.53
Nasdaq (0NDQC ) 11326.51 +159.00 +1.42
Russell 2000 (IWM) 152.14 +2.35 +1.57
IBD 50 (FFTY) 37.78 +0.48 +1.29
Last Update: 4:30 PM ET 10/1/2020

The stock market rally continued to rise Thursday, though techs took the lead.

The Dow Jones Industrial Average edged up 0.1% in Thursday’s stock market trading. The S&P 500 index climbed 0.5%. The Nasdaq composite popped 1.4%.

On Wednesday, the Dow Jones staged a follow-through day, confirming the new stock market rally. The Dow rose 1.2%, about the minimum gain looked for, with volume surging vs. the prior session. The S&P 500 index and Nasdaq composite, which had looked like they were going follow through on Wednesday, slashed intraday gains on stimulus deal concerns.

Stimulus talks also fueled and cooled the major indexes on Thursday, though this time the tech-heavy Nasdaq closed near session highs. Volume was slightly below Wednesday’s level, so Thursday wasn’t a follow-through day for the Nasdaq. But the Nasdaq did move above its Sept. 10 intraday high, a key short-term resistance area.

Growth stocks performed much better Thursday than on Wednesday. Among the best ETFs, the Innovator IBD 50 ETF (FFTY) climbed 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 1.9%. The VanEck Vectors Semiconductor ETF (SMH) popped 2.5%. On Wednesday, all three growth ETFs lagged the major indexes, with SMH fractionally lower.

Amazon stock and Microsoft (MSFT) finally closed back above their 50-day moving averages after both hit resistance at that key level multiple times. Amazon stock rose 2.3% and Microsoft tacked on 1%.

The Stock Market Outlook Amid Election Day, Coronavirus Crosswinds

Twilio Stock Jumps On Guidance

Twilio disclosed in an SEC filing that revenue for the just-ended third quarter will top its prior guidance of $401 million to $406 million. The communications software specialist didn’t give any specifics, but that was good enough for investors. Twilio stock jumped 9% early Friday, moving close to a 283.44 double-bottom-base buy point. On Thursday, TWLO stock popped 4% to 256.96, moving back above its 50-day line.

Tesla Stock

Tesla stock rose 4.5% on Thursday and 10% so far this week. It’s now erased virtually all of its Battery Day-related losses and is nearing its Sept. 15 short-term high. The pattern remains wide and loose. While Tesla stock tends to be volatile, it has calmed down for periods, offering lower-risk buy points.

Shares fell 4% early Friday. That likely reflects broad selling due to the Trump coronavirus news. Also, the S&P 500 adding Pool Corp. means Tesla has been passed over again for the big-cap index.

Early Thursday, Tesla confirmed that it’s cutting the price of its made-in-China Model 3 electric cars by 8% to 10%. Some of that may reflect lower costs from Tesla using off-the-shelf batteries from CATL, but electric vehicle competition is growing in China and set to intensify in 2021.

There’s speculation that Tesla will cut U.S. Model 3 and Model Y prices later this month, along with Model 3 prices in Europe.

Tesla deliveries and production figures for the third quarter will come out soon, with Friday morning the most likely time. Tesla will smash its old quarterly delivery record of 112,000 vehicles, the only question is by how much. The most-accurate forecaster is predicting just over 143,000.

In addition to deliveries, production data will be important. If Tesla produces substantially more than it delivers, that would be a concern, given the automaker’s huge capacity expansion over the next year. Notably, its Fremont, Calif., plant will soon be serving only North America aside from the Model S and X.

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Tesla and Microsoft stock are on IBD Leaderboard. Microsoft is on the IBD Long-Term Leaders list, while Pool Corp. is on the watchlist.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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