Dow Jones futures fell modestly early Friday, along with S&P 500 futures and Nasdaq futures. President Donald Trump late Wednesday signed into law that expresses support for Hong Kong protesters, straining relations with a "phase one" China trade deal still not finalized. Beijing accused America of "sinister intentions," but hasn't taken any concrete retaliation. The stock market rally, fueled in large part by China trade optimism, set fresh all-time highs Wednesday.
XFacebook stock, Mastercard stock, Adobe stock, Disney stock and Costco stock are leaders trading near buy points heading into Friday's half-day session. Should any be on your Black Friday shopping list? Facebook (FB) and Walt Disney (DIS) are in buy zones. Adobe (ADBE), Costco Wholesale (COST) and Mastercard (MA) are just below buy points, but Costco stock and Mastercard stock are arguably already actionable.
Facebook stock leads with a $576 billion valuation. Mastercard stock has a market cap of $294 billion, Disney stock is at $273.1 billion and Adobe at $149.6 billion. Costco stock has the smallest market cap of the bunch, at a still-hefty $132.2 billion.
Disney stock, Costco stock and Mastercard stock are all on IBD Leaderboard. Adobe stock is on the IBD 50.
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Dow Jones Futures Today
Dow Jones futures fell 0.2% vs. fair value, along with S&P 500 futures. Nasdaq 100 futures sank 0.2%. Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Hong Kong Bill Raises China Tensions
Dow Jones futures fell late Wednesday on news that President Trump signed a Hong Kong bill passed almost unanimously by Congress. The new law mandates annual reviews of Hong Kong's special trade status. It also authorizes sanctions against officials abusing human rights or undermining the city's autonomy. Trump also signed a bill barring the sale of munitions like tear gas and rubber bullets to Hong Kong police.
"This so-called bill will only make the Chinese people, including our compatriots in Hong Kong, further understand the sinister intentions and hegemonic nature of the United States," China's foreign ministry said in an online statement. "It will only make the Chinese people more united and make the American plot doomed to fail."
But hopes remain that China trade talks won't be derailed. Despite the rhetorical umbrage, Beijing so far hasn't followed through on previous threats of "countermeasures." Instead, officials said they hoped Trump won't implement some of the law's provisions.
President Trump, who had previously been relatively quiet on Hong Kong amid China trade talks, had sought to soothe ruffled feathers in Beijing.
"I signed these bills out of respect for President Xi, China, and the people of Hong Kong," Trump said in a statement. "They are being enacted in the hope that Leaders and Representatives of China and Hong Kong will be able to amicably settle their differences leading to long term peace and prosperity for all."
The Shanghai composite fell 0.5% Friday and Hong Kong's Hang Seng retreated 1.8%, after both fell modestly Thursday.
U.S. stock markets were closed Thursday for Thanksgiving.
Current Stock Market Rally
The current stock market rally continued to run higher with little or resistance. On Wednesday, the Dow Jones Industrial Average climbed 0.15%, the S&P 500 index 0.4% and the Nasdaq composite 0.7%, all hitting new highs.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) rallied 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 0.5%. The VanEck Vectors Semiconductor ETF (SMH) rose 0.7%.
Facebook Stock
Facebook stock rose 1.5% to 202 on Wednesday, moving higher in the buy zone from a 198.19 cup-with-handle entry. Volume wasn't tremendous on the initial Nov. 19 breakout day, but was 37% above normal. Since the Q3 earnings report, Facebook stock has risen in above-average trade in seven sessions, with no high-volume down sessions.
The relative strength line for Facebook stock has been picking up since late September, though it remains below its July 2018 peak. The RS line, which tracks a stock's performance vs. the S&P 500 index, is the blue line in the charts below.
Disney Stock
Disney stock dipped 0.1% to 151.50 on Wednesday, Shares are in range from a 147.25 buy point in a cup base. Disney stock cleared a short pause on Tuesday, hitting a record 153.41 intraday, on data signaling that Disney+ is getting more than 1 million downloads a day. On Nov. 13, Disney stock surged 7%, blasting past an early entry and the 147.25 conventional buy point after the Dow Jones giant touted strong first-day users for the Disney+ streaming service.
After lagging for several months, the RS line for Disney stock has shot up, nearing the early August peak.
While Disney earnings have been falling for several quarters as it develops streaming and content, Wall Street sees Disney+ as a transformational event that will deliver strong growth for Disney in the coming years.
Mastercard Stock
Mastercard stock climbed 0.8% to 291.74, just below a 293.79 buy point from a flat base. Shares already cleared an aggressive entry at 282.34 earlier this month. Mastercard stock has risen in 14 of the last 16 sessions.
Archrival Visa's stock reclaimed a 182.50 cup-base buy point on Wednesday, rising 1% to 184.37 in heavy volume. Several other payment stocks have recently moved into buy zones.
The RS line for Mastercard stock has lagged somewhat, though it's been moving higher in recent months.
Costco Stock
Costco stock dipped 0.2% to 300.76, slightly below a 304.98 buy point, with 307.20 as another possible entry. Shares have pulled back from the 304.98 to the 50-day/10-week line. Arguably, pullbacks to the 50-day line can offer a better entry for investors with a longtime, slower growing leader like Costco stock.
The RS line has been lagging since early September and especially early October, but that follows a long uptrend.
Adobe Stock
Adobe stock edged up 0.4% to 309.06 on Wednesday. Shares have been running up sharply in recent months toward a potential 313.21 buy point. If Adobe could form a handle, that would provide a useful shakeout and a slightly lower buy point.
Adobe stock was a solid stock market winner for much of 2019, though it's not one of the highflying software names with stronger growth and lofty valuations.
Remember, the stock market will be open Friday, but will close early at 1 p.m. ET. Trading volume will almost certainly be light, as many investors take a long holiday weekend. If China trade concerns rise, trading could be volatile.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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