Dow Jones futures were up solidly Friday morning, along with the S&P 500 and Nasdaq. Crude oil futures and government bond yields edged up after falling in recent days on recession fears.
Zendesk (ZEN) surged after agreeing to a buyout, but was well off premarket highs. In the meantime, note (MRK) is reportedly on the verge of an acquisition of blessings (SGEN).
FedEx (FDX) rose on upbeat earnings forecast despite slightly missing fourth quarter outlook. FDX stock is up almost 4% before the open, signaling a move above its 200-day moving average.
US-listed Chinese equities continued to perform well Li car (LI), Xpeng (XPEV) and no (NOK) runs higher. Giant of electric vehicles BYD (BYDDF) is about to erupt. In the meantime, Alibaba (BABA) and Pinduo (PDD) emerged amid growing optimism about China’s economy after painful Covid lockdowns.
Tesla (TSLA) edged up as the Shanghai plant prepares to close to significantly expand production capacity. The EV maker has also reintroduced an improved Autopilot offering.
Dow Jones futures today
Dow Jones futures were up 0.8% from fair value. S&P 500 futures were up 0.9% and Nasdaq 100 futures were up 1%.
The 10-year government bond yield rose to 3.09% from 3.07% after falling 24 basis points on Wednesday and Thursday.
Crude oil prices rose 2%, pushing West Texas Intermediate futures above $106 a barrel. Oil is headed for its first monthly decline since November.
However, copper prices dipped somewhat after falling more than 5% to a fresh 16-month low on Thursday.
Keep in mind that premarket action in Dow futures and elsewhere doesn’t necessarily translate to actual trading in the next regular trading session.
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Stock market rally Thursday
The Dow Jones Industrial Average rose 0.6% in trading on Thursday. The S&P 500 index rose 0.95%.
The Nasdaq Composite rose 1.6%, a sharp gain on Day 4 of its rally attempt. However, according to IBD data, Nasdaq volume was slightly lower than the previous session. So there was no follow-up day to confirm the new rally attempt.
Even with this week’s gains, the Nasdaq has only managed to look above its 10-day moving average, while the S&P 500 and Dow Jones are right at that level. All are below their 21-day moving averages and 50-day moving averages.
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Shares of Zendesk rose early Friday after the cybersecurity company agreed to a $10.2 billion ($77.50) share purchase by private equity firms Hellman & Friedman and Permira.
Shares jumped 30% to 75.50 before the open. But ZEN stock was previously up more than 50% on the takeover frenzy.
Zendesk stock was trading near a two-year low.
Over the past year, several acquisitions have taken place in the cybersecurity space.
Meanwhile, Merck is stepping up negotiations to buy biotech company Seagen, the WSJ reported. SGEN shares rose more than 3% early Friday after surging last week on reports of talks. Seagen ended Thursday with a valuation of $32 billion.
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Li Auto stock continued its strong run on an upcoming new model and anticipation of expanded subsidies for electric vehicles in China. LI stock plummeted 4% ahead of the open. On Thursday, Li Auto stock rose 6.6% to 39.24 on Thursday and surpassed a buy point of 37.55 after a long very deep consolidation. But LI stock closed slightly extended from the buy point and 54% above its 50-day moving average.
Xpeng shares are up 4% and Nio shares are up 1%, both moving towards their 200-day moving averages.
BYD stock, which was yet to trade as of Friday, is on the cusp of a buy point at 39.81 from a 48%-deep cup-with-henkel basis, according to MarketSmith analysis.
Meanwhile, Alibaba stock surged 3% and neared its long-time moving 200-day moving average. Pinduoduo stock is up 3%, already above its 200-day price.
Tesla vs BYD: Which EV Giant is the Better Buy?
Tesla stock rose a fraction before the open, attempting to scale above its 21-day moving average, but remains deep in a long, chaotic consolidation.
Tesla will reportedly halt production of the Model Y at its Shanghai plant for two weeks in early July, Bloomberg reported. From July 18, the Model 3 line will be closed for 20 days. After the plant’s capacity increase, Tesla Shanghai’s Model Y production capacity will increase from about 11,000 to 14,000 per week. Model 3 capacity will increase from 5,500 to 7,700 per week.
Meanwhile, Tesla is reintroducing an expanded Autopilot deal for $6,000. Its features fall between those of the standard autopilot and the $12,000 full self-driving.
Read The Big Picture every day to keep up to date with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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