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Stocks Rally Into 2018: Disney, Netflix Lead As China, Chip Stocks Rise | Stock News & Stock Market Analysis

Stocks leapt up to a strong start Tuesday’s open, as international markets provided a starkly mixed backdrop for the first session in 2018.

X Walt Disney (DIS) and McDonald’s (MCD) were the clear front runners among Blue Chips, leading the Dow Jones industrial average up 0.5% at the start of trade. The Nasdaq Composite and S&P 500 each posted early 0.4% gains, as Netflix (NFLX) and Illumina (ILMN) staked out strong early moves.

The economic calendar opens the year on Wednesday, with automakers reporting December sales, ahead of Friday’s December payrolls report. Global stock markets started the year with sharply contrasting action.

China’s stocks charged out of their three-day holiday weekend and into their first trading session of 2018 on Tuesday, with Hong Kong’s Hang Seng index roaring 2% higher and the Shanghai Composite grabbing a 1.2% gain. Real estate, auto and consumer goods all saw powerful gains.

Stocks in China received a lift from the Caixin-Markit General Manufacturing Purchasing Manager’s Index, which showed that growth in China’s manufacturing and consumer activity accelerated in December to a four-month high.

Europe and Japan were off to softer starts. Tokyo’s Nikkei 225 dipped a fraction on Tuesday. In Europe, data showing weak auto sales and registrations placed pressure on the session: the CAC-40 in Paris dropped 0.7%, Frankfurt’s DAX fell 0.8% and London’s FTSE 100 sagged 0.5% in afternoon action.

Disney, Netflix, Illumina, Incyte Upgraded; Bitcoin Pares Losses

Disney ran at the head of the Dow, up 1.5%. Disney’s “Star Wars: The Last Jedi” continued to lead at the box office in its third weekend, topping $500 million in cumulative domestic box office sales.  The stock also received an upgrade on Tuesday from Macquarie, to outperform from neutral and a 12% price target hike to 125. The gain put Disney shares just a fraction below a 110.93 buy point in a double-bottom base.

Apple flattened at the open. The tech heavyweight has had trouble breaking free of its 10-week moving average, below a flat base buy point at 176.34.

Netflix led the FANG stocks, jumping 2.3% after an upgrade to outperform, from neutral, from Macquarie. The stock has technically built a base with a 204.48 buy point but, like many others, is starting the year wrestling to regain support at its 10-week line.

China-based stocks were showing a healthy early response to the overnight gains in China.

Tencent Holdings (TCEHY) rumbled ahead 3.5% in early action.  The move lifted the online gaming titan to less than 5% below a flat base buy point of 56.15.

Changyou (CYOU) popped 1.2% at the open. The thinly traded online gaming name has been battling resistance at its 10-week moving average since August.

IBD 50 stock Alibaba Group Holding (BABA) climbed 2.1%. The online commerce giant is also trading below its 10-week line, in the sixth week of a possible base pattern.

Chip stocks were behaving well, sketching out modest early gains. Taiwan Semiconductor (TSM) was an early leader, up 2.1%. Shares are below a 43.12 buy point in five-week flat base.

Illumina (ILMN) swung up 2%, following an upgrade to outperform, from market perform, from Wells Fargo. The stock is in a five-week flat base with a 230.82 buy point.

Biomed leader Incyte (INCY) jumped 1.5%. The developer of cancer treatments including Jakafi and Iclusig was upgraded to outperform, from market perform, by RBC Capital. The stock has been in a deepening consolidation since March.

Bitcoin traded near $14,000, about 2% below its late-day price on Friday. Futures were down around 4% each on the Cboe and CME exchanges. Bitcoin-related stocks were generally lower:

  • Riot Blockchain (RIOT): -1.9%
  • Bitcoin Investment Trust (GBTC): +2.7%
  • Parateum (TEUM): +9.2%
  • Marathon Patent Group (MARA): +1.2%
  • Long Blockchain (LTEA): +8.4%


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