Categories: BusinessFinance

Dow Jones futures rise amid technology boosts and airline sell-offs

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Stock futures soared in off-hours trading as investors await on the re-opening of the U.S. economy. The airline sell-offs were cushioned with technology stock boosts.

The Dow Jones futures climbed over 200 points along with S&P 500 and Nasdaq futures also pointing to positive territory as well.

If yesterday investors were doubtful in the re-opening of the U.S. economy, it seems that the tables have turned, for now.

The overnight moves on Wall Street had modest gains with the U.S. technology companies including Microsoft, Apple, Amazon, and Netflix lifting the broad market out of the negative territory. The S&P 500 closed the session above 0.4%, while the Nasdaq went a little over 1.2%.

Investment strategy analyst at Wells Fargo Ken Johnson says that the current major capital stocks are currently masking their weak rallies as he adds on Monday’s note:

“This concentration raises concerns about the rally’s long-term health and durability as it suggests that ample liquidity, rather than broadly improving fundamentals, may be fueling it.”

TD Ameritrade: retail investors buy airline stocks

After the futures drop yesterday, a report from Warren Buffett along with others mentioned during the Berkshire shareholders meeting that they have dumped all of their airline stocks and look for opportunities elsewhere.

Berkshire’s move may have been one of the catalysts that made the Dow Jones rally weak, despite the positive cushioning received from the technology stocks.

However, despite the firm’s announcement, retailers continued on buying airline stocks to further cushion the negative sentiments the sector currently has.

According to TD Ameritrade data, traders bought mostly Boeing and Carnival Corp. stocks in April.

In addition, TD Ameritrade clients focused on “highly correlated stocks,” according to JJ Kinahan, the firm’s chief market strategist. He also noted that clients bought Dow Jones stocks such as Exxon Mobil, Disney, and AT&T.

Cramer: Wall Street is ‘in denial’

Mixed sentiments from CNBC’s Mad Money host Jim Cramer and Warren Buffett about the Dow Jones seems to show this week.

Cramer warned his viewers that Warren Buffet’s airline dump may have exposed the S&P 500’s weakness in the markets. He recommends “selling some position” in the S&P 500 index if the upward rally continues despite Buffett’s advice to buy an index fund.

He has also been a solid advocate for stock picking over index investing in this uncertain market as the host warns its viewers that a basket of stocks — such as the S&P 500, which is a representation of the largest traded companies — forces investors to take the high-performing holdings with the laggards.

Investors may need to be cautious about the Dow Jones this week after the big moves done by Warren Buffett.

Featured image courtesy of Free-Photos/Pixabay

Alec Padua

Alec a former mobile app developer turned independent singer-songwriter and busker based in the Philippines, who goes by the stage name "Alex Corner". He has released songs on Spotify and other music digital platforms. A self-taught trader and financial market enthusiast, he also started his own YouTube channel and blog called "The Trading Comedy" where he documents his trading journey in the Philippine Stock Market and beyond. He is also a casual gamer and streamer who enjoys FPS, RPG, and strategy games as well as conducting live charting sessions in the financial markets.

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