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Good morning. Thursday brings Walmart and Alibaba earnings before the bell, plus weekly jobless claims and a couple of economic reports, so there is more than the usual amount to watch before the open.
The Market Gauge
The S&P 500 closed at 7,707.98, up 0.21%. The Nasdaq composite closed at 26,331.09, up 0.16%. The Dow Jones Industrial Average closed at 53,463.05, up 0.22%. The Russell 2000, which tracks smaller companies, rose 0.50%.
A Treasury Department move to buy back more long-term bonds pulled yields lower, and a landmark cancer-vaccine trial result from Moderna and Merck sent biotech and drug stocks sharply higher across the board. IBD still calls this a healthy uptrend, in what it terms a power trend since the August 4 follow-through day, though chips, software, and several AI-related names lagged underneath the surface.
Beginner note: a power trend is IBD's label for a market that has strung together an unusually strong run of gains soon after a new uptrend begins. It is not a guarantee, but it is historically one of the more reliable signs that a rally has real staying power, which is why IBD treats it as a green light for adding exposure rather than just holding what you already own.
On today's calendar
Weekly jobless claims (8:30 AM ET): the government's weekly count of new unemployment filings. A rising trend can be an early sign the labor market is cooling.
Philadelphia Fed manufacturing index (8:30 AM ET): a regional survey of factory activity that often gives an early read on the health of manufacturing nationally.
Leading Economic Index (10:00 AM ET): a Conference Board gauge that blends several indicators into one number meant to hint at where the economy is headed over the next several months.
Walmart (WMT) reports before the open. The retail bellwether follows Target's beat-and-raise Wednesday, when Target shares hit a new high. Walmart shares slipped Wednesday, holding their 50-day line but still below their 200-day line, so today's report is a real test.
Alibaba (BABA) also reports before the open. The Chinese e-commerce, cloud, and AI giant has been rising in small steps but remains well below its 200-day line.
On the radar: Eli Lilly
$LLY ( ▲ 4.46% ) is a pharmaceutical giant best known these days for its diabetes and weight-loss drugs, Mounjaro and Zepbound, alongside a broad lineup of other medicines. Wednesday the stock jumped 4.46% to close at 1,280.34, on volume well above its recent daily average, clearing a 1,249.45 buy point from a flat base after triggering two days of earlier, more aggressive entries. Its relative strength line, which compares the stock's performance against the broader market, hit a new high the same day.
Why it's worth watching: a specific buy point, volume well above average, and a relative strength line at a new high are three signals CAN SLIM investors like to see arrive together before trusting a breakout. Tonight's lesson looks at how a new product can trigger this same kind of setup, worth having in mind the next time a chart like this one crosses your screen.
ONE FOR THE ROAD: IBD just called this a power trend, one of its strongest bullish signals. Does a label like that change how aggressively you'd look to add new positions, or does it take more than a label to move you? Reply and let me know.
Educational content only. Not financial advice. Past performance does not predict future results. Read the full financial disclosure.