Dow Jones Today, Futures Lagging As China Stocks Down, Bitcoin Rallies; Moderna, Square Rise; Hiked Microsoft Destination

Stock futures were down on Monday as volatility rippled across global markets in a heavy week of earnings and business news. Education stocks led to an aggressive sell-off in China-based stocks. Hasbro and Lockheed Martin derived the full reporting calendar. Microsoft today gained an early lead over the Dow Jones by raising its target price ahead of its earnings report on Tuesday.

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Dow Jones futures saw an early 0.2% decline, enough to push the index back below 35,000 in the last week of trading in July. S&P 500 futures fell 0.15% and Nasdaq 100 futures fell 0.2% after both indices closed at new highs last week.

Small caps showed early resilience, with Russell 2000 futures defending a 0.1% gain.

Based in China Pinduoduo (PDD), NetEase (DETECT), Trip.com (TCOM), JD.com (JD) and Baidu (BIDU) posted the steepest early losses on the Nasdaq 100.

Modern (MRNA) topped the index, possibly bolstered by comments from senior infectious disease official Anthony Fauci on Sunday that people with compromised immune systems may need a booster vaccination as the delta variant of the Covid virus continues to spread.

On the S&P 500, Hasbro (HAS) rose nearly 3% when early earnings reporting began. Lumen Technologies (LUMN) rose 2.9% after agreeing to sell its Latin American operations to private investor Stonepeak for $ 2.7 billion.

Moderna and city ​​square (SQ) led to early gains in IBD 50 shares, each up 2% in pre-market trading. Square ended Friday in a buy zone reaching 267.62 above a buy point of 254.88.

Dow Jones today: Boeing vs. Microsoft

Boeing (BA) slid from the Dow Jones low today, 0.9% ahead of its second quarter report on Wednesday.

Microsoft (MSFT) rose 0.1%, a lonely advance on Monday among the blue chips. Jefferies maintained its buy rating on the stock and raised its target price to 335, about 16% above Friday’s closing price.

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Microsoft announces the results of the fourth quarter after close of trading on Tuesday. Microsoft stock, listed on IBD’s leaderboard and Big Cap 20, closed nearly 10% from a buy point of 263.29 on Friday after breaking out in June. Microsoft is also an IBD Long-Term Leader.

Bond yields, Fed meeting, new home sales

Bond yields are likely to remain the focus of a big week of business news ago, led by the Fed’s two-day Federal Open Market Committee meeting that ends Wednesday. Yields fell to 1.24% early Monday after hovering just below 1.29% on Friday. Yields have fallen sharply in the past 10 weeks after hitting a high of over 1.76% in April.

The Department of Commerce reports new data on June home sales at 10 a.m. ET.

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China stocks are catching up in global markets

Monday’s market moves reflected some big moves from China over the weekend. The regulators revised the rules for educational companies in the country, called for a switch to non-profit business models and prevented public ownership. Stocks of US-traded New oriental education and technology (EDU), which had fallen 54% on regulatory warnings last week, fell 23% in pre-trading hours. peer Valley training (TAL) down 70% last week, down 22%.

China referred to the trade war that the US started in January 2018 as a “state” in negotiations between US Deputy Secretary of State Wendy Sherman and China’s Deputy Secretary of State Xie Feng in the northeastern port city of Tianjin.

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In its high-level negotiations with the Biden administration, China has set out a number of issues on which it seeks cooperation with the US.

The education sell-off spread to other segments of the market, bringing the Hang Seng Index down 4.1% in Hong Kong and the Shanghai Composite down 2.3%. In Japan, the Nikkei 225 in Tokyo rose 1% and caught up with strong global action late last week, while Tokyo was closed on Thursday and Friday for bank holidays and the opening of the Olympics.

Europe’s markets were in the red around noon. The Frankfurt DAX was down 0.4%. The Paris CAC-40 and the London FTSE 100 were each 0.25% lower.

Bitcoin surges

Bitcoin came to life after hovering between $ 29,000 and $ 36,000 for most of July. The cryptocurrency rose to $ 39,544, its highest level since June, and then settled at a 12% gain, just over $ 38,500 in the early stages. The cryptocurrency hit a record high of $ 65,000 in April.

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Bitcoin-related stocks responded with big early gains. Mara Digital Holdings (MARA) screwed 18% higher. Riot blockchain (RIOT) achieved an increase of 18%. MicroStrategy (MSTR) exceeded 16%.

Stocks to watch: Pool, Icici, Discover, CarMax

Some of the stocks that should be highlighted in IBD’s investment action plan this week include: swimming pool (SWIMMING POOL), Icici Bank (IBN), Discover financial services (DFS) and CarMax (KMX)

The pool is in the buy range from its buy point of 449.54. The stock retired on Friday after pulling back to test support at its 50-day moving average.

India-based Icici Bank just passed an 18.27-mug-with-handle buy point on Friday.

Discover Financial ended about 2% below a buy point on Friday with a flat base of 125.48. The stock recently saw some high volume drops below its 50-day line. But its relative strength rating remains at a strong 93 and its relative strength line is hovering near new highs.

CarMax is trading at a buy point of 137.63 just below a cup-and-handle base.

Dow Jones is gearing up for a big earnings week today

The Dow was preparing for its biggest reporting week of the reporting season, with seven blue-chip reports. Apple (AAPL), Microsoft, Visa (V) and 3M (MMM) start with reports on Tuesday. Boeing and MC Donalds (MCD) deliver reports on Wednesday. Merck (MRK) Bats clean up on Thursday.

Apple is being extended after breaking a buy point of 137.17 in early July. Visa is at the top of a buy range that goes as high as 249.48.

Meanwhile, Boeing is struggling to support the 200-day moving average. 3M manages to hold steady on a flat 10-week basis and is on top of its 50-day and 21-day converged moving averages.

McDonald’s retook a buy point of 238.28 in a strong move last week. It remains in a buy zone that extends to 250.19.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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