Dow Jones Futures: RH Nears Breakout With Earnings Due; Is Nike A Buy After This Ad Buy?

Dow Jones futures edged higher early Tuesday orning, along with S&P 500 futures and Nasdaq futures, after U.S. stock markets were closed Monday for the Labor Day holiday. Trump trade war news will be key, as President Donald Trump threatens to leave Canada out of a U.S.-Mexico trade deal and escalate the China trade war.  Dow Jones stock Nike (NKE), which is in a buy zone, embraced controversy by choosing ex-NFL QB Colin Kapernick as the key athlete of its new “Just Do It” campaign. Meanwhile, home furnishing retailer RH (RH) is near a buy point with earnings due Tuesday. Facebook (FB), Twitter (TWTR) and Alphabet (GOOGL) unit Google will testify before Congress regarding their responses to foreign interference in elections. Finally, JD.com (JD) will be in the spotlight after CEO and billionaire founder Liu Qiangdong was arrested and then released by Minneapolis police on a “criminal sexual misconduct” allegation.

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Dow Jones Futures Today

Dow Jones futures rose 0.1% vs. fair value. S&P 500 futures advanced 0.1%. Nasdaq 100 futures climbed nearly 0.2%. The major stock averages rallied last week, with the S&P 500 index and Nasdaq composite setting fresh all-time highs.

Trump Trade War Vs. China, Canada

The U.S. could impose tariffs on $200 billion worth of Chinese goods as soon as Sept. 6, after the public comment ends. That would be on top of 25% Trump tariffs on an initial $50 billion worth of Chinese imports. The China trade war escalation is expected. The big question is whether the $200 billion will face a 25% Trump tariff or 10%.

Meanwhile, U.S.-Canada trade talks ended Friday without a deal, but with negotiations set to resume this week. But Trump signaled Saturday that he is ready to leave Canada out in the cold.

There is no political necessity to keep Canada in the new NAFTA deal. If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off…

— Donald J. Trump (@realDonaldTrump) September 1, 2018

Nike Taps Colin Kapernick

Nike is using Colin Kapernick as the main athlete in its latest “Just Do It” campaign. Kapernick sparked the ongoing take-a-knee protest by NFL players during the national athlete, dividing fans and inspiring outrage from President Trump. Nike must see an upside from courting supporters of the NFL protests and Trump opponents, but risks turning off millions of customers as well.

Nike stock reclaimed an 81.10 buy point from a flat base on Aug. 20 in heavy volume. Nike stock closed Friday at 82.20.

RH Earnings

The luxury home-furnishings retailer formerly known as Restoration Hardware reports late Tuesday. Analysts expect RH earnings to surge 166% to $1.73 a share. Sales should grow 7.5% to $661 million. Investors will close attention to how the RH membership model is going, as well as its showrooms.

RH stock is in a cup-with handle base with a 161.49 buy point. RH stock closed Friday at 159. The relative strength line, which tracks a stock vs. the S&P 500 index, is a little below the old high. It’s bullish to have the RS line moving into new high ground along with or ahead of a stock breaking out.

RH stock skyrocketed 22.5% and nearly 31% after the last two RH earnings reports. Then again, investors may have already priced in good news.

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Facebook, Twitter, Google On Capitol Hill

Twitter CEO Jack Dorsey and Facebook Chief Operating Officer Sheryl Sandberg will testify before the Senate Intelligence Committee Wednesday morning on how their companies have responded to foreign disinformation campaigns in the wake of Russia’s use of social media to influence the 2016 election. Google CEO Sundar Pichai declined to attend but the Alphabet unit will have a representative to testify. Twitter’s Dorsey also will testify that afternoon before the House Energy and Commerce Committee.

The social media giants are testifying before Congress as Trump has hammered Google, accusing the tech giant of “rigged” search results vs. conservatives. He’s also said that the power of Google, Facebook and Amazon (AMZN) represent a “very antitrust situation.” More broadly, there is growing support from the left and right for regulation of various kinds vs. internet giants.

Facebook stock crashed in late July after warnings of slowing growth. Shares have risen slightly, but the Facebook RS line has edged lower, falling to a 16-month low on a weekly chart.

Twitter stock also crashed in late July following its latest earnings report, though shares found support at the 200-day line. Twitter saw user levels fall vs. the prior quarter and said that could happen again in Q3. That’s due to Twitter suspending fake or suspicious accounts, a move that might mollify critics on Capitol Hill. Twitter stock has edged higher in the past several weeks, but its RS line has not made much headway.

Google parent Alphabet is still in buy range from a 1,201.59 high-handle buy point cleared in July. Investors should probably turn their attention to a new flat base within a base-on-base pattern. The new Google stock buy point is 1,291,54, with shares closing Friday at 1,232.11. Google stock’s RS line is at consolidation lows, however.

JD.com CEO

Liu Qiangdong is back in China after a Friday night in Minneapolis. Local police released Liu without bail and put no travel restrictions on Chinese internet billionaire. But they are still investigating  the “criminal sexual misconduct” allegation involving a Chinese student at the University of Minnesota. Liu is a doctoral student at the university, and was in Minneapolis for his studies.

It’s unclear how this will affect JD.com stock, which hit a 17-month low Friday. Chinese internet giant Tencent (TCEHY) owns a major stake in JD. Walmart (WMT) and Google also have JD stock holdings and partnerships.

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