Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, were squarely higher early Thursday, as China prepares for the potential failure of property developer Evergrande. Apple and Tesla stock extended their bounces in premarket trade. Costco (COST) and Nike (NKE) will report earnings after the close.
Tesla (TSLA) gained 1% premarket Thursday, on pace to add to Tuesday’s 1.3% rise. The stock is just above its latest buy point.
Deckers, Microsoft and Tesla are IBD Leaderboard stocks. Chipotle was featured in this week’s Stocks Near A Buy Zone column. Snap is an IBD SwingTrader stock and featured as Wednesday’s IBD Stock Of The Day.
Dow Jones Today: Evergrande
Ahead of the stock market open Thursday, Dow Jones futures rallied 0.6% vs. fair value, while S&P 500 futures moved up nearly 0.6%. Nasdaq 100 futures gained 0.5% vs. fair value.
China is asking local governments to prepare for the potential failure of property developer China Evergrande Group, according to The Wall Street Journal. Meanwhile, Evergrande has an $83.5 million coupon payment due Thursday on its U.S. dollar bonds, and the company hasn’t indicated whether it will make that payment or not.
Last week’s jobless claims are due out at 8:30 a.m. ET. Initial unemployment claims are expected to fall to 309,000, per Econoday estimates, from the previous week’s 332,000 figure.
Stock Market Breaks Key Support
The Nasdaq broke down sharply below its 50-day line Monday, but closed just above that key level after Wednesday’s strong gain. The S&P 500 remains below its own 50-day line, while the Dow Jones Industrial Average snapped a four-day losing streak Wednesday.
Wednesday’s The Big Picture commented, “A 1% gain Wednesday by the Nasdaq composite, following a limp 0.2% rebound the prior session, failed to recoup all of Monday’s 2.2% thumping. Yet for now, in a partial victory for the bulls, the tech-centered index made its way back above its still-rising 50-day moving average.”
Dow Jones Earnings: Nike
Dow Jones leader Nike is tracing a flat base with a 174.48 buy point, according to IBD MarketSmith chart analysis. But shares are below their key 50-day moving average line even after a two-day win streak. Shares tacked on 0.5% premarket Thursday.
Nike earnings are due out late Thursday. The company is expected to earn $1.12 per share on sales of $12.4 billion, per IBD data.
Stock Market Earnings: Costco
After the close Thursday, Costco will report its fiscal-Q4 results. The warehouse retail chain is expected to earn $3.58 per share. Revenue was seen climbing 15% to $61.4 billion. Same-store sales were expected to rise 12.4%.
Costco stock pulled back to its 10-week level this week, where it is seeking support. Shares are about 16% above a 389.55 buy point in a cup with handle.
Stocks To Buy And Watch: Chipotle, Deckers, Snap
Friday’s IBD Stock Of The Day, Chipotle Mexican Grill, is rebounding from its 50-day moving average. Shares were up 0.3% premarket Thursday. The burrito chain has been trading tightly following a post-earnings jump July 21. Look for continued support around its 10-week line, which would be bullish for the stock’s prospects during the current market weakness. Positively, the stock’s RS line is at new highs.
IBD SwingTrader stock Snap is approaching a flat base’s 80.95 buy point following two straight days of strong gains. Shares rallied about 1% premarket Thursday.
IBD Leaderboard stock Deckers Outdoor is trying to break out past a 444.58 entry in a flat base, according to IBD MarketSmith, but is about 4% below the entry following Wednesday’s 0.6% gain. Shares were up 0.4% premarket Thursday. Per Leaderboard commentary, the top retail stock is below a mini-trendline entry near 433 that provided an early buy point. Its relative strength line is also near new highs.
Tesla stock rallied 1% premarket Thursday, on pace to add to Wednesday’s 1.7% gain. Shares remain in buy range above the stock’s latest buy point at 730. Shares also above their 700.10 aggressive buy point deep inside a correction. Meanwhile, a deep, large base continues to take shape.
On Jan. 25, Tesla stock hit a record-high 900.40, after climbing as much as 93% from a 466 buy point in a cup-with-handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved up 0.7% premarket, on pace to add to Wednesday’s 1.7% advance. Despite a two-day rally, the stock is still below the 50-day line. On Monday, Apple stock hit its lowest level since early July.
Software giant Microsoft rose 0.5% premarket Thursday, as the stock continues to find support at its 50-day line. On Monday, shares briefly traded below their 50-day line for the first time since a June 21 breakout above a 263.29 buy point before closing just above it.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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