Dow Jones futures fell sharply early Friday, along with S&P 500 futures and Nasdaq futures, amid earnings from Apple (AAPL), Amazon.com (AMZN) Atlassian (TEAM), Amgen (AMGN), Gilead Sciences (GILD) and more. President Donald Trump's threat to impose new tariffs or other action on China for the country's role in the global pandemic raised concerns about a new clash amid a massive global recession.
XThe coronavirus stock market rally went into reverse Thursday, along with Tesla (TSLA) and some other top growth stocks, amid continued grim economic data. The pullback was relatively modest, but Dow Jones futures suggest further selling in the current market rally.
Apple earnings beat views while the iPhone giant announced a $50 billion buyback increase, but didn't offer guidance for the current quarter. Apple stock fell modestly in extended trading. Amazon stock and Atlassian stock also fell overnight, along with Amgen stock and Gilead stock.
Apple stock, Amazon stock and Atlassian stock had all closed in buy range, while Gilead stock and Amgen stock were near breakouts.
But, as AAPL stock, AMZN stock, TEAM stock — and Tesla stock — show, buying just before quarterly results can be risky unless using an earnings options strategy.
Tesla stock and Amazon stock are on IBD Leaderboard.
Dow Jones Futures Today
Dow Jones futures fell 1.85% vs. fair value. S&P 500 futures sank 2%. Nasdaq 100 futures retreated 2.4%. Apple stock, Amazon stock and Tesla stock weighed on futures, both directly and by fueling selling in suppliers, rivals and big techs generally.
Boeing (BA) was a drag on Dow Jones futures, announcing a $25 billion debt sale and announcing it wouldn't take coronavirus rescue aid.
Meanwhile, President Trump said Thursday afternoon that his late 2019 China trade deal is "secondary to what took place with the virus." There's growing frustration in the White House and elsewhere about Beijing's lack of transparency regarding the origin and virulence of Covid-19.
While Dow Jones futures haven't been as volatile during the coronavirus stock market rally, big moves are still relatively common. Earnings season adds more volatility to extended trading.
Remember that overnight action in Dow futures, AAPL stock, AMZN stock and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Coronavirus News
Coronavirus cases worldwide are above 3.3 million. Covid-19 deaths have cleared 234,000.
Coronavirus cases in the U.S. have reached 1.09 million, with deaths topped 63,000.
Coronavirus Stock Market Rally
The coronavirus stock market rally retreated somewhat Thursday, though software and big-cap techs held up reasonably well.
The Dow Jones Industrial Average fell 1.2%, the S&P 500 index lost 0.9% while the Nasdaq composite dipped 0.3%.
Big Techs Hold Up
The Nasdaq 100 edged higher Thursday, and it's easy to see why.
Microsoft (MSFT) rose 1% on earnings while Apple stock rose 2% on Thursday, bolstering the Dow Jones, S&P 500 and Nasdaq composite. Amazon stock, the third trillion-dollar U.S.-listed company, climbed 4.3%. Facebook (FB) jumped 5.4% on earnings while Netflix (NFLX) climbed 1.9%.
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Tesla Stock Round Trips
Late Wednesday, Tesla reported a surprise profit, helped by a surprise spike in zero emission vehicle credit revenue. On Thursday, Tesla stock, already in buy range, shot up nearly 9% in the morning to 869.82, but reversed for a 2.3% decline to 781.88. Intraday, Tesla stock fell as low as 763.50, undercutting a 775.05 buy point. In doing so, TSLA stock round tripped a 12% gain. Wiping out a double-digit gain is a fairly strong signal.
It would be understandable if investors sold — especially those who bought on Thursday's earnings gap. But it's also understandable if investors held onto their Tesla stock, which closed in buy range.
However, Tesla stock fell 3.4% to 755 early Friday, sinking below the 775.05 entry.
Top ETFs
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slid 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) rose 0.15%, with Microsoft stock the No. 1 holding and ServiceNow (NOW) the big software winner. The VanEck Vectors Semiconductor ETF (SMH) fell 3.7%.
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Apple Earnings
Apple earnings rose 4% to $2.55 a share, with sales rising less than 1% to $58.31 billion. Wall Street expected Apple earnings of $2.26 on sales of $54.54 billion.
Services revenue and China revenue were better than expected, with CEO Tim Cook saying China demand improved in April.
The iPhone maker raised its AAPL stock buyback by $50 billion while also raising its quarterly dividend by 6.5%. But there was no Apple earnings or sales guidance amid the coronavirus crisis.
Apple stock fell nearly 3% overnight, back below a buy zone. AAPL stock closed up 2.1% to 293.30, just clearing a 288.35 cup-with-handle buy point, according to MarketSmith analysis.
The relative strength line for Apple stock is near a record high.
Amazon Earnings
Amazon earnings fell 29% vs. a year earlier to $5.01 a share. Revenue grew 26.5% to $75.5 billion. Analysts forecast Amazon earnings per share of $6.34 on revenue of $72.9 billion.
While the e-commerce and cloud giant is seeing strong demand during the coronavirus crisis, Amazon guided low on Q2 operating profit, citing substantial coronavirus costs. CEO Jeff Bezos said on the Amazon earnings call that investors "may want to take a seat."
Amazon Web Services revenue climbed 32% to $10.2 billion. Microsoft and Google both reported faster cloud-computing services growth earlier this week.
Amazon stock retreated 5% to 2,350 overnight. AMZN stock rose 4.3% to 2,474 on Thursday, clearing a 2,461.10 entry from a short consolidation. That offered a chance to added a few AMZN shares or take a small initial position.
Amazon stock broke out earlier this month from a traditional 2186.05 cup-base buy point.
Amgen Earnings
Amgen earnings rose 17% to $4.17 a share while sales grew 11% to $6.16 billion. Wall Street had expected Amgen earnings of $3.70 on sales of $6.04 billion.
Amgen earnings guidance for 2020 was a little light, especially given the Q1 EPS beat.
Amgen stock dipped a fraction overnight. AMGN stock rose 1.5% to 239.22 on Thursday. On Tuesday, Amgen stock nearly hit a 245.09 buy point but backed off.
Atlassian Earnings
Atlassian earnings rose 19% to 25 cents a share in fiscal Q3 with revenue up 33% to $411.6 million. Analysts expected Atlassian earnings of 21 cents a share on revenue of $395.1 million.
But the collaboration software maker guided lower for the current Q4
Atlassian stock fell nearly 4% to 149.50 overnight, just below a buy point. TEAM stock earlier closed up 1.8% to 155.49, within range from a 149.80 cup-with-handle base.
Gilead Earnings
Gilead earnings came in at $1.68 a share, up a penny vs. a year earlier. Revenue grew 5.1% to $5.55 billion. Analysts expected Gilead earnings of $1.58 a share on $5.41 billion in sales.
Gilead has been moving on coronavirus treatment hopes, specifically its experimental antiviral remdesivir. But Gilead plans to spend heavily on the coronavirus and give away many vials. Also, the coronavirus crisis could mean fewer patients for Gilead's hepatitis-C and AIDS drugs.
The biotech giant withheld guidance.
Gilead stock fell nearly 5% before the open. GILD stock rose 1% to 84 on Thursday. Gilead stock has an 85.89 handle buy point. The consolidation is very volatile but has been finding support at the 50-day line.
GILD stock has been moving primarily on Gilead remdesivir news. Gilead stock jumped 5.7% Wednesday on data showing Gilead's antiviral helps speed recovery for coronavirus patients. Remdesivir could receive emergency FDA authorization soon.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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