Dow Jones Futures: Key Week For Stock Market Rally; Watch These 5 Stocks

Dow Jones futures were little changed early Monday morning, along with S&P 500 futures and Nasdaq futures. The current stock market rally is in the midst of its first real pullback with the Dow Jones, S&P 500 index and Nasdaq composite falling every day last week. Boeing stock will be in focus Monday after a second Boeing 737 Max suffered a deadly crash. Nvidia (NVDA) appears to have outbid Intel (INTC) for data-center chip specialist Mellanox Technologies (MLNX). Meanwhile Coupa Software (COUP) reports earnings Monday.


Boeing and Intel stock are both Dow Jones Industrial Average components. Coupa stock is on IBD Leaderboard.

Dow Jones Futures Today

Dow Jones futures fell 0.2% vs. fair value. S&P 500 futures rose 0.15%. Nasdaq 100 futures were up 0.15%. Overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. That’s certainly been true in recent days, as Dow Jones futures have done a poor job of predicting the stock market close.

Current Stock Market Rally

The current stock market rally is in its first real pullback after a long run, as investors shift focus from China trade deal optimism to concerns about global economic growth.

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The S&P 500 index and Nasdaq composite have fallen below their 200-day lines while the small-cap Russell 2000 looks worse. But Friday’s stock market rally from intraday lows by the major indexes and top stocks was encouraging.

Among best ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) did lose 3.1% last week, more than the major averages, but most of the damage was done Monday. The IGV ETF closed down just 0.1% on Friday after a 0.2% dip Thursday.

Boeing 737 Max Crash

A Boeing 737 Max operated by Ethiopian Airlines crashed soon after takeoff Sunday, killing all 157 people. That follows a Lion Air Boeing 737 Max crash on Oct. 29.

China ordered Chinese airlines to ground Boeing 737 Max jets. China is a huge market for the Boeing 737 Max 8 and other jets.

Boeing Stock Impact?

How will this affect Boeing stock? After the Lion Air 737 Max crash, Boeing stock tumbled 6.6%. However, Oct. 29 also marked the low of the first leg of the late 2018 stock market correction. Then again, Boeing stock has a big influence as the most expensive stock in the price-weighted Dow Jones and a major S&P 500 index component.

Boeing stock recouped its Oct. 29 loss within three days. Shares sold off again as the stock market correction intensified, but hit a record high in early February, soon after the Q4 Boeing earnings report.

Boeing stock fell 2 cents on Friday to 422.54. Shares lost 4.1% for the week after hitting a record high March. 1. But the relative strength line remains near highs. The RS line, the blue line in the charts below, tracks a stock’s performance vs. the S&P 500 index.

Boeing 737 Max orders have been strong. Will airlines cancel existing orders or delay new orders?

Boeing stock has a 97 IBD Composite Rating of a best-possible 99. The Aerospace/Defense group is now rated No. 9 out of IBD’s 197 industry groups, according to the IBD Stock Checkup tool.

Nvidia Outbids Intel For Mellanox?

According to multiple reports, Nvidia has outbid Intel for Mellanox Technologies, an Israeli chipmaker specializing in data centers. Nvidia will pay more than $7 billion for Mellanox, which closed Friday with a $5.9 billion market cap. It could announce its biggest-ever acquisition early Monday.

Mellanox stock has rallied amid takeover buzz, though earnings growth has been strong too. Mellanox stock closed at 109.38, 1.5% below its March 4 peak.

Chip sales to data centers have been a growth area for Nvidia and Intel.

Nvidia stock rose 0.9% to 150.64 on Friday, holding support at its 50-day. But shares are still 49% off their Oct. 2 peak thanks to two big revenue warnings. Nvidia’s RS line has been holding close to 22-month lows.

Intel stock is building the right side of a nine-month cup base, according to Marketsmith, some 9% below a buy point of 57.70. However, Intel stock needs one more day to complete a handle, giving it a 54.20 entry. The RS line is at its best levels since last June.

Coupa Earnings

Coupa earnings are due late Monday. Analysts see Coupa Software breaking even vs. a 2-cent gain a year earlier. However, the business spending management software maker has run past EPS views by 10-17 cents in each of the last four quarters. Revenue should climb 26% to $68 million.

Coupa stock is slightly extended from an 84.63 cup-base entry. On Friday, Coupa stock was one of many top stocks with bullish rebounds from their 50-day or 10-week lines. Shares plunged 8.9% at the open to 83, but within a few minutes was back in the buy zone. Coupa stock ended Friday off 0.55% at 90.59.

Coupa stock has a 94 Composite Rating.

Stock Market Rally Focus

U.S. and China economic reports will be key for the current stock market rally this week, after anemic U.S. job growth and plunging Chinese exports soured sentiment last week. U.S. retail sales are due Monday, durable goods Wednesday and new-home sales Thursday. Chinese data on retail sales, industrial production and fixed-asset investment are on tap Wednesday night.

Fed Chairman Jerome Powell, in his “60 Minutes” interview airing Sunday night, reiterated “patience” on further Fed rate hikes but also confidence in the U.S. and global economy. But he said “principle risks” are coming from China and Europe.

The current stock market rally is still in a confirmed market uptrend, but has been racking up high-volume selling days, or distribution. It’s not a time to be aggressively buying stocks. Consider taking profits on some winners.


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