Dow Futures Up 250 Points: Stock Market Rally Soars On Fiscal Deal Talks; U.S. Jobless Claims, Tesla, Airlines In Focus

Dow Jones futures are trading higher during the early morning hours, along with the Nasdaq Composite and S&P 500 futures.

The stock market rally is set to build more gains, as hopes remain alive for more fiscal stimulus help. This comes at a time when we are constantly hearing more news about fresh job losses. The job loss pain is likely to become a lot worse if the U.S. lawmakers do not get their act together and pass another round of fiscal stimulus support. 

No Fiscal Help Means More Job Losses

Yesterday, the fiscal stimulus negotiations collapsed between House Speaker Nancy Pelosi and the U.S. Treasury Secretary Steven Mnuchin. However, both agreed to extend the talks before the new fiscal stimulus bill of $2.2. Trillion is presented to House Democrats to vote.

If the U.S. does not pass the new fiscal aid measures, the U.S. airlines will have no other choice but to lay off a large number of their employees. American Airlines and United Airlines are alone expected to lay off nearly 32,000 workers in the absence of government support.

Goldman Sachs and JP Morgan To Slash More Jobs

The U.S. economic recovery remains immensely fragile, and the fact that we are seeing daily headlines about more job losses remains a concern for markets. Even the U.S. banking giants, Goldman Sachs, and JP Morgan are expected to eliminate hundreds of their workers.

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Moderna’s CEO, Stephane Bancel said that he doesn’t expect to apply for emergency use of potential coronavirus vaccine to the Food and Drug Administration (FDA) before the U.S. presidential election on Nov. 3.

According to the CEO, Moderna needs more time to gather safety data so that there is adequate data in an Emergency Use Authorization (EUA) file that is to be sent to the FDA. In addition to this, Moderna doesn’t expect to have full FDA approval before spring next year. 

Stock Market Today

Over in Asia, the stock market experienced a bit of a mix session today. The Shanghai index declined by 0.20%. Trading halted for the Nikkei stock index due to a technical glitch. Hong Kong’s HSI index increased by 0.79%, while the Aussie stock index, the ASX, jumped 1.09%.  

Coronavirus Update

The coronavirus cases around the globe reached 34.15 million, and the deaths caused by this virus are over 1.01 million. The U.S. is the worst country hit in terms of coronavirus cases and virus deaths. Brazil remains the second-worst country hit by the coronavirus.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth remained unchanged yesterday. 63% of the Dow Jones stocks traded above their 200-day moving average.  

The S&P 500 stock breadth recovered some lost ground yesterday. 58% of the shares traded above their 200-day moving average. This is a change of +1% from a day earlier.  

Dow Jones Futures Today

The Dow Jones futures are trading lower by 240 points, chiefly resulting from hopes for additional stimulus. The data that traders and investors are paying the most attention to is the weekly jobless claims number, which is expected to come in at 850K, while the forecast is for 870K.

In addition to this, we also have the U.S. ISM manufacturing PMI numbers, the last important economic reading before the jobs report, due tomorrow. The forecast for the U.S ISM manufacturing PMI is 56, which is the same as the last reading.

Should You Buy or Sell Stocks?  

The Dow Jones futures made a remarkable comeback yesterday as the Dow price has not only remained above the 100-day simple moving average SMA on the daily timeframe but has also crossed above the 50-day SMA. This shows a strong bull signal.

Moreover, the Dow’s future price has taken out yesterday’s high, and the next important resistance level for the Dow Jones Industrial Average is 28,277.

The S&P 500 futures, the wider representation of the U.S. equity market, are also trying to break above the 50-day SMA on the daily time frame. Yesterday, the S&P 500 crossed above the 50-day SMA, but it closed below this moving average.

The bulls are still very much in control of the S&P 500 price, as the price is trading above the 100 and 200-day SMA on the daily timeframe. The next resistance is at 3419, and the possible support is at 3265.

Stocks To Watch: Tesla, Carnival And Norwegian

Tesla stock jumped 2.4% yesterday. Tesla shares have not experienced exuberance in their volatility this week. This may be the calm before the storm as Tesla is expected to report its new car deliveries data very soon. The new car delivery data could be released today or tomorrow.

It is expected that Tesla will report another large number, which could easily smash its old quarterly delivery number of 112K. The anticipation is that the new number could be as high as 143K, and this is primarily due to the fact that Tesla is benefiting from its Shanghai plant and greater demand for its model Y in the U.S.

The U.S. cruise sector is the one to watch today. The Centers for Disease Control and Prevention extended the no-sail order until the end of October. This wasn’t unexpected, given the surge in coronavirus cases on a global scale; however, it is likely that we may see the cruise line industry coming under further selling pressure.

This means Carnival stock, Norwegian cruise line shares, and more are all likely to face more punishment. 

Stock Market Rally

The S&P 500 stock index closed off its highs yesterday. However, the index gained 0.83%. The health care sector led the index higher, and nine out of eleven sectors closed higher. 

The Dow index also broke its losing streak yesterday, and the Dow stocks moved the index higher by 1.20%. Twenty-eight stocks of the Dow Jones Index increased in value, and two shares of the Dow index moved lower. 

The NASDAQ composite, a tech-savvy index, soared 0.84% yesterday. 

S&P 500 Leaders and Laggards: Duke Energy and Micron

Duke Energy stock contributed the biggest gain, soaring 7.46%. Micron stock was the largest drag; it fell by 7.39%. The S&P 500 stock index is up 4.1% so far this year.

Dow Jones Leaders and Laggards: Disney and UnitedHealth

UnitedHealth stock advance higher by 2.51% and was the biggest mover for the Dow, while Disney stock dropped 1.05%, the biggest drag for the Dow Jones industrial average index.