Stocks jumped at the starting bell Friday, boosted by a tentative federal infrastructure agreement, a strong round of Federal Reserve stress test results for banks bolstered early trade, and a May inflation gauge that came in below expectations. Virgin Galactic rallied after the FAA Ok'd hauling passengers into space. Nike blew past a buy point on the Dow Jones today, soaring 15% after its fiscal fourth-quarter earnings report.
XThe Dow Jones Industrials Average powered up 0.5%, while the S&P 500 jumped 0.2% — enough to notch its fourth straight new high.
The Nasdaq Composite opened higher, then reversed to a 0.2% loss as Trip.com (TCOM), Zoom Video (ZM) and Peloton (PTON) slipped to the bottom of the Nasdaq 100.
China's JD.com (JD) and Baidu (BIDU) led the Nasdaq 100, up around 3% each. Splunk (SPLK) and Netflix (NFLX) also rallied, following analyst upgrades.
Nike (NKE) topped the S&P 500, with CarMax (KMX) and IBD 50 stock Enphase Energy (ENPH) also high in the mix. CarMax rallied almost 6% after its fiscal first-quarter report.
Space vehicle maker Virgin Galactic (SPCE) soared 17%, after the Federal Aviation Commission granted the company permission to carry passengers into space. The stock had already rallied almost 29% in June, and ended Thursday up nearly 74% since Dec. 31.
Dow Jones Today: Nike Is Breakout Ready
Nike stock was the early leader on the Dow Jones today, while Apple (AAPL) tinkered with its buy point and Microsoft (MSFT) remained in a buy range.
An above-forecast 96% revenue spike and earnings almost double analyst expectations sent Nike shares soaring more than 14%. The move scored an early breakout above a 148.05 buy point, lifting out of a seven-month consolidation. The buy range extends to 155.45.
Apple continues toiling away at its four-week advance, ending Thursday up 9% from a mid-May low and within 3% of a flat base buy point at 137.17.
Microsoft remains in its buy range, after topping a 263.29 buy point in an eight-week cup base on Monday. The stock is outpacing the market, up 2.8% for the week through Thursday, and tracking toward its fifth straight weekly advance.
Stocks To Watch: CrowdStrike, Shopify
At the top of the IBD 50 list, China-based Up Fintech (TIGR) rallied 6.2% and Israel-based new issue Global-E Online (GLBE) jumped 4.6%. Up Fintech is in a buy range on a rebound from support. Global-E finished Thursday up 128% from its May 12 initial offering price. The stock has not yet paused long enough to form an IPO base.
Among other stocks to watch for Friday, Alphabet (GOOGL), Crocs (CROX), Shopify (SHOP), CareDX (CDNA) and CrowdStrike (CRWD) remain in buy ranges.
Infrastructure Deal, Stress Test
A tentative infrastructure agreement announced Thursday by the White House and a bipartisan group of senators helped stir early market optimism. The group packaged the $973 billion deal, which did not touch any 2017 tax cuts, to attract votes from moderate GOP Senators. But the White House pledges it will be placed within a larger "reconciliation" effort, which could include as much as $6 trillion in spending and cut into the 2017 tax cuts to help fund the bill.
Also late Thursday, the Federal Reserve unveiled results for its annual stress test of big U.S. banks. All 23 banks tested remained "well above" the required minimum capital levels, the report said. That put banks in a strong position to weather further economic downturn.
The result opens the door to increased flexibility for banks with regard to capital used for dividends and stock buybacks. Expectations call for eh industry to boost dividends and buybacks by many billions of dollars beginning in July. Announcements for those moves are expected to begin on Monday afternoon.
Visa Flush Eyes Buy Point, Dow Jones Today
Credit payment leader Visa (V) Visa is also a blue chip to watch. Visa stock on Thursday briefly topped a 237.60 buy point in a seven-week flat base. The base has bullishly formed mostly above the stock's short-term 21-day exponential moving average, with one quick drop to confirm support at the 50-day moving average. Shares ended less than 1% below the entry on Thursday.
Inflation Gauge Jumps Less Than Expected
Personal income slipped and consumer prices rose, each less than expected in May, the Commerce Department reported. Incomes fell 2% month-over-month, well below April's drastic 13./1% decline. Projections called for a 2.5% decrease.
The Personal Consumption Expenditures Price Index rose 0.4%, vs. a 0.6% rise in May and expectations for a 0.5% increase. ON a year-over-year basis, the PCE Index jumped 3.4%, reportedly its largest gain in nearly three decades, but below expectations for a 3.5% advance.
Personal spending was flat for the month, sharply below April's 0.9% gain, disappointing estimates for a 0.5% improvement.
The University of Michigan's June consumer sentiment numbers are set for a 10 a.m. ET release.
Bitcoin Holds At $33,000
Bitcoin slipped off early highs and dropped near $33,000, according to CoinDesk. The cryptocurrency cut below $29,000 on Tuesday for the first time since last year.
Reports out of China on Sunday said as much as 90% of the country's Bitcoin mining sector had been taken offline, after orders from China's government for electrical power providers to "screen, clean up and terminate" mining operations.
Bitcoin touched a record high above $64,800 on April 14. It is down about 9% since the start of June, and has a year-to-date gain of 15%.
What The Infrastructure Deal Means For Stocks
Nasdaq, S&P 500 and Dow Jones Today
After a four-day run up, the Nasdaq Composite is stalking its first five-day advance since January. The index has now blown past resistance at the 14,000 level, which had kept a lid on the Nasdaq's consolidation since February.
The Nasdaq has so far gained 4.5% in June, vs. a 1.5% advance for the S&P 500 and the Dow's 1% dip. On a year-to-date basis, the Nasdaq is now up 11.5%. The S&P 500 has a 13.6% gain, and the Dow has advanced 11.7%.
Small caps outpaced the overall market action on Thursday, with the Russell 2000 rallying 1.3%. The Russell is now up 16.7% year-to-date. The iShares Russell 2000 ETF (IWM) ended Thursday less than 1% below a 233.74 handle buy point in what IBD MarketSmith analysis plots as a 15-week flat base.
Growth stocks have perked up and are running ahead of the market for the week. The Innovator IBD 50 ETF (FFTY) and the Innovator IBD Breakout Opportunities ETF (BOUT) are each up 3.6% for the week through Thursday. Meanwhile, the Nasdaq and the S&P 500 have climbed 2.4% apiece.
Uptrend Expands In News-Driven Market
The market status shifted back to "confirmed uptrend" on Tuesday, and has increasingly shaken off doubts during the week. Some added clarity from the Fed, and the appearance of progress toward a federal infrastructure spending deal broadened optimism and, for now, spurred a risk-on mood for the market.
That mood expands institutional buying across broader segments of the market. And it signals an improved environment for growth stock investors.
The message for investors is to continue rotating from cash into stocks and ETFs, with the focus on well-vetted leaders passing buy points in valid bases. But it is important to note that, while many growth stocks are performing well, many recent breakouts have struggled.
For more detailed analysis of the current stock market and its status, study the Big Picture.
Among those are the stock mentioned earlier, Alphabet and Crocs, as well as Shopify, CareDX and CrowdStrike. All five stocks remain in buy ranges.
And keep in mind, the market faces a long list of new risks heading into the second half of the year. It is likely to remain a news-driven environment. Things like an infrastructure turnaround in Washington, or new regulatory moves in China could scare the market into a sharp reversal.
Pyramiding and sell rules remain two best friends in helping to limit the cost of such a turn.
Find Alan R. Elliott on Twitter @IBD_Aelliott
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