Stock market futures rallied solidly Monday morning, with Nasdaq futures, S&P 500 futures and Dow Jones futures solidly higher vs. fair value. Crude oil topped $70 a barrel. Starbucks (SBUX) rallied on a big Nestle (NSRGY) alliance. Top-rated chipmaker Nvidia (NVDA) looked set to clear a buy point at the open, while Alibaba (BABA) continued Friday’s earnings rally. Nvidia customer Tesla (TSLA) said in an SEC filing that it “may raise additional capital,” but that didn’t worry investors.
The major market averages rebounded late last week, fueled by Apple’s huge rally on earnings, buyback and Warren Buffett’s latest stock buys. The Nasdaq cleared the 50-day moving average Friday while the Dow Jones and S&P 500 are within 1% of that key support level.
Stock Market Futures Today
Stock market futures today were solidly higher vs. fair value. Dow Jones futures climbed 0.4%, with Apple and Exxon Mobil (XOM) among the Dow stocks tilting up in early stock market trading. S&P 500 futures rose 0.4%. Nasdaq 100 futures advanced 0.6%.
The 10-year Treasury yield nudged up to 2.96%. The 2-year yield was at 2.51%.
Starbucks Gets Nestle Pick-Up
Nestle will pay Starbucks $7.15 billion cash upfront for the right to sell the U.S. coffee giant’s products worldwide. Starbucks said it’ll use the cash to speed stock buybacks, with some $20 billion devoted to repurchases and dividends through fiscal 2020. It expects the deal boost earnings per share by 2021 at the latest.
Swiss-based Nestle aims to bolster its position as the globe’s top coffee company. The deal could help in the U.S., where the Nespresso maker has a relatively low market share.
Starbucks shares jumped 3.6% in premarket trading. Starbucks is trying to rebound, retaking its 200-day line on Friday. But the stock has gone nowhere since late 2015, while its relative strength line has been steadily declining.
U.S. shares of Nestle were not yet active.
Nvidia Eyes Breakout
The top-rated chipmaker, whose products serve PC gaming, artificial intelligence, autonomous driving and more, is set to report earnings Thursday night. Nvidia rose 1.9% to 243.60 in the premarket. That signals a move above a 239.35 buy point from a double-bottom base.
Nvidia rose 2.6% on Friday to 239.05, retaking its 50-day line. Keep in mind that Nvidia has had a long run and is a late-stage base. Late-stage breakouts are less likely to succeed.
Tesla May Raise ‘Additional Capital’
Tesla and CEO Elon Musk stressed last week that the electric car company has no plans to sell additional stock or debt this year, even though Tesla burned $1 billion in cash in Q1. Musk blasted “boring” analysts for making “not cool” questions about Tesla’s finances and production outlook.
Tesla was less definitive with the Securities and Exchange Commission. Tesla’s latest quarterly SEC filing released Monday said that the company “may raise additional capital to fund the rapid growth of our business”
Of course, companies have to lay out possibilities, even when unlikely.
Tesla stock rose 2% in the premarket as investors seemed unconcerned.
Alibaba Edges Higher
Alibaba got several analyst price target hikes Monday after the Chinese e-commerce giant delivered strong quarterly results on Friday. Alibaba’s stock shot up nearly 12% last week, including Friday’s 3.5% pop to 188.89, back above its 50-day line.
The stock climbed 0.75% in early trading.
Alibaba, like Nvidia, is working on a double-bottom base. It has a 201.60 entry.
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