Dow Jones futures rose vs. fair value Sunday evening, along with S&P 500 futures and Nasdaq futures, amid several big merger deals and coronavirus vaccine news. The stock market rally is still in force, but it's livin' on the edge following a second week of violent selling.
The Nasdaq composite ended last week below its 50-day moving average. Apple (AAPL) and Tesla stock, among the market rally's big winners, especially in the final weeks to the top, sold off hard. Shopify (SHOP), DocuSign (DOCU) and Microsoft (MSFT) are below their 50-day lines.
The most important element of CANSLIM investing is the M. If the market conditions are not favorable, most stocks will struggle. Without the M, it's CANSLI. You may be sly and a better man than I, but you're not smarter than the market.
So here's what investors should do. Be defensive. Have a correction game plan. And build a watchlist of leading stocks such as Taiwan Semiconductor (TSM), PerkinElmer (PKI), Target (TGT) and Chipotle stock.
Merger Deals
Nvidia (NVDA) will acquire wireless chip designer Arm Holdings from SoftBank for $40 billion. U.K.-based Arm designs chips for Apple, Intel (INTC), Samsung and more. An Nvidia-Arm deal will likely face serious antitrust concerns.
Gilead Sciences (GILD) will acquire Immunomedics (IMMU) for about $21 billion, or $88 a share, the companies said Sunday. Immunomedics, which has a breast cancer drug Trodelvy, closed Friday at 42.25.
China's ByteDance reportedly is in exclusive talks with Oracle (ORCL) for the U.S. operations of TikTok, though it may not be an outright sale. That comes after Microsoft said Sunday that ByteDance had rejected its bid. It's not clear why, but ByteDance reportedly decided not to sell the algorithm that drives TikTok results. Oracle supposedly was still open to buying TikTok under that restriction.
President Donald Trump has threatened to ban TikTok in the U.S. by mid-September without a deal, though Americans likely could continue to use the service.
Apple stock, Tesla (TSLA), Chipotle Mexican Grill (CMG), Nvidia and Microsoft are on IBD Leaderboard. Taiwan Semiconductor stock is on the Leaderboard watchlist. Microsoft stock is on IBD Long-Term Leaders list. Microsoft, Nvidia and PerkinElmer stock are on IBD 50.
Coronavirus News
Coronavirus cases worldwide have reached 29.17 million. Covid-19 deaths topped 927,000.
Coronavirus cases in the U.S. have hit 6.70 million, with deaths above 198,000.
AstraZeneca (AZN) and Oxford University have restarted their final-stage trial of their coronavirus vaccine. The trial was paused last week after one participant became violently ill. It's still unclear what the cause was.
Pfizer (PFE) and BioNTech (BNTX) are looking to expand their late-stage coronavirus vaccine trial to 44,000 people, from 30,000. That would allow testing on a more diverse population, including older teens and some Hepatitis B and C sufferers.
The AstraZeneca and Pfizer-BioNTech vaccine candidates are generally seen as furthest along, with Moderna (MRNA) close behind.
Dow Jones Futures
Dow Jones futures rose 0.55% vs. fair value. S&P 500 futures advanced 0.6% and Nasdaq 100 futures climbed 0.9%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session. As the past few days have shown, Dow Jones futures are even less predictive during stock market volatility.
Reprinted from yahoofinance, the copyright all reserved by the original author.
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