Dow Giants Stand Out As Trump Trade Fuels Stock Market Rally; Big Chip News Looms

Dow Jones futures were little changed late Wednesday, along with S&P 500 futures and Nasdaq futures, amid fresh Trump impeachment news. The stock market rally had a solid rebound Wednesday with investors focusing on China trade deal hopes vs. Trump impeachment news. Nike stock broke out on blowout earnings, while fellow Dow components Apple stock, Microsoft stock and Boeing stock all rose more than 1%. Looking ahead to Thursday, Micron Technology earnings are on tap, with Micron stock and many chip names in or near buy zones.

Bottom line: Trump trade talk trumped Trump impeachment news, at least for one day.

Dow Jones Futures Today

Dow Jones futures were just below fair value. S&P 500 futures fell a faction while Nasdaq 100 futures sank 0.15%.

As of late Wednesday, a majority of House lawmakers backs Trump impeachment proceedings, according to various tallies. Meanwhile, lawmakers on the House and Senate intelligence committees got access to a whistleblower report regarding Trump and Ukraine. Several urged the report be released to the public.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session. Dow Jones futures were generally slightly lower before Wednesday’s open, not offering any sign of the day’s solid gains.

General Motors and the United Auto Workers are near a tentative deal to end a GM strike that started on Sept. 16, CNBC reported. GM stock rose modestly in late trade.

The current stock market rally came under pressure Tuesday, as the major indexes and leading stocks sold off on Trump impeachment risks.

On Wednesday, the White House disclosed transcripts of President Donald Trump’s call with Ukraine’s president. House Speaker Nancy Pelosi late Tuesday announced the start of Trump impeachment hearings, amid allegations that Trump improperly pressured Ukraine to investigate business dealings of Joe Biden’s son Hunter.

The president said the transcripts revealed nothing improper, while Democrats said it showed a clear abuse of power.

Trump Trade Talk

Trump also said a China trade deal could come “sooner than you think.” He’s generally upbeat about China trade, even when he’s escalating the China trade war. He may have had extra motivation to provide positive headlines for the stock market on Wednesday.

Dow Jones Stocks Stand Out

The Dow Jones Industrial Average and S&P 500 index both rallied 0.6%.

Nike stock jumped 4.2% to 90.81, clearing an 89.45 cup-with-handle buy point. Nike earnings rose 28%, the best in years, as digital sales soared 42%.

Apple  climbed 1.5% to 221.03, just below a 221.47 buy point. The RS line for Apple stock is just below a 2019 high. Microsoft climbed 1.4% to 139.36, rebounding from its 50-day line. Microsoft stock is once again close to a 141.77 buy point. Boeing advanced 1.2%, rising intraday to its best levels since early April. Boeing stock is in range from a 369.79 buy point via a cup-with-handle base within a larger consolidation.

Apple stock has a $999 billion market cap, second only to Microsoft stock’s $1.064 trillion. Boeing stock is the largest weight in the price-weighted Dow Jones.

The Nasdaq composite rose 1.05% on Wednesday, reclaiming its 50-day line after tumbling 1.5% on Tuesday.

Growth Stocks

Software and other growth stocks generally rose, but that was after many reversed big intraday losses, extending Tuesday’s sell-offs.

Among the best ETFs, the Innovator IBD 50 ETF  erased early losses to climb 0.9%, back above its 200-day line.

The iShares Expanded Tech-Software Sector ETF  also rallied 0.9% after rebounding intraday from just above its 200-day line. The relative strength line for the IGV ETF has been at its lowest levels since the end of January, even with megacap Microsoft  holding near record highs.

The VanEck Vectors Semiconductor ETF  rose 1.7%, bouncing strongly from its 50-day line.

Micron Earnings Key

Providing a peek into the semiconductor sector, especially memory plays, Micron earnings are on tap Thursday night. Micron earnings are expected to plunge 86% to 48 cents a share, with revenue down 46% to $4.521 billion. Investors will be hoping for actual Micron earnings to be less terrible. But the real key will be Micron’s outlook. Does Micron see a recovery for memory demand and pricing, and perhaps the broader chip industry?

Micron Stock

Micron stock rose 2% to 49.47 on Wednesday. It’s working on a 51.49 handle buy point within a 16-month consolidation. Micron stock is just above a consolidation that wasn’t quite long enough for a proper base. Before that Micron stock broke out of a base after a long slide, but that pattern was largely below the 200-day line.

Meanwhile, Micron earnings and guidance are also key to several chip-equipment makers that are heavily exposed to the memory market, including Applied Materials  and Lam Research. Applied Materials stock is less than 1% below a cup base buy point. Lam Research stock is extended from an early September breakout, hitting new highs.

Follow The Stock Market, Not Political Twitter

Remember, as an investor, it doesn’t matter if you love or loathe President Trump, or even how you think Trump impeachment moves will affect the stock market over time. What matters is what the stock market is actually doing. Follow the Dow Jones and other major indexes, as well as the leading stocks.

The Dow Jones today is up slightly for the week so far, less than 2% from all-time highs. But breakouts have a had a rough time generally, while growth stocks remain laggards.

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Have a nice day and I sure hope this article helps you in your trading.