Dow Jones futures rose Friday morning, while S&P 500 and Nasdaq futures declined modestly, pending the major jobs report for June. The market rally showed its strength on Thursday, as Chinese stimulus hopes gave a big boost to stocks, commodities and Treasury yields. But the major indicators are entering a major resistance zone.
Chinese e-commerce giant Ali Baba (BABA), leader of gene editing CRISPR treatments (CRSP), coal miner Alliance resource partners (ARLP), a utility infrastructure company Quanta Services (PWR) and solar power operation Energy Enphase (ENPH) Buy signals are flashing on Thursday.
BABA stock has breached key levels on reports of new China stimulus. The CRSP stock has a chart similar to that of Alibaba. ARLP stock rebounded from the 50-day line and took off the short-term levels. Stock PWR and Enphase Energy sparked early entries inside messy handles.
Shares of GME fell 5% in premarket trading after the mall-based video game retailer fired CFO Mike Ricupero and laid off a slew of workers across the company. late on wednesday, Jim Stop (GME) announced plans for a 4-for-1 stock split. GME stock rose 15% Thursday.
TWTR stock fell 4% overnight to just over 37 on reports that Tesla CEO Elon Musk’s Twitter deal is in “grave danger.” Twitter (TWTR) confirmed Thursday that it adheres to its estimate that 5% of accounts are bots, but Musk appears to be unsatisfied. He is also reportedly struggling to raise funding for a deal worth $44 billion and $54.20 per share. Musk may want to walk out of the deal or pay a much lower price, but he has few legal options, according to experts.
cocky (UPST) reported preliminary second-quarter revenue of $228 million vs. Its goal is from $295 million to $305 million. Shares are down 19% in the extended trade. UPST stock collapsed 56% on May 10 on those earlier expectations.
Tesla sales, EV inventory
China Passenger Car Association reported early Friday Tesla (TSLA) sold 78,906 Chinese-made cars in June, a new record, up 138% against. A year ago and 145% vs. mayo. The EV giant has already reported global deliveries in the second quarter. Earlier this week, the CPCA gave Tesla China a preliminary figure of 78,000.
TSLA stock fell less than 1% early Friday.
Tesla stock jumped 5.5% to 733.63 Thursday, racing above the 21-day streak. This came in light of other indications that China will extend subsidies for electric cars. This is despite another NHTSA investigation of a potentially fatal accident involving a Tesla Autopilot. It’s also after a report that Musk gave birth to twins last year with a high-ranking executive.
Giant EV and battery BYD BYDDF stock jumped 4.6% to 42.40, a new closing level, and exited its buying range. Lee Otto (LI) rose 1.8% to 39.26% near the top of the buying zone.
PWR stock is on IBD Leaderboard. Enphase Energy stock is listed on IBD 50. Quanta Services and ENPH stock is on IBD Big Cap 20. Quanta Services was Thursday’s stock of IBD.
The video included in this article discusses and analyzes Thursday’s market action AMD (AMD), Baidu (BIDU) and ARLP.
The Labor Department will release its jobs report for June at 8:30 a.m. ET. Economists expect to see non-farm payrolls rise by 270,000 vs. May gains 390,000 jobs.
The unemployment rate is expected to remain at 3.6%. The drop in the unemployment rate would worry the Federal Reserve, which wants to see labor markets decline.
The jobs report, along with the June CPI next week next week, will be key drivers of the Fed rate hike expectations. But the Fed appears to be closed to another 75bp move in late July. There will be two more CPI and jobs reports before the September meeting.
Dow jones futures contracts today
Dow futures rose 0.1% against stocks. fair value. S&P 500 futures were down 0.1%. Nasdaq 100 futures fell 0.3%.
The 10-year Treasury yield fell 3 basis points to 2.98%. The two-year yield fell 4 basis points to 3%.
Crude oil prices fell. Copper prices are down 2%, giving up much of Thursday’s bounce.
The June jobs report is sure to tip the Dow futures ahead of the open.
Remember that overnight action in Dow Jones futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
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stock market rise
The stock market rally started higher and quickly rallied, closing near session highs with broad-based gains.
Bloomberg reported that China could allow provincial governments to issue bonds of up to $220 billion in infrastructure spending, boosting global economic hopes.
The Dow Jones Industrial Average rose 1.1% in stock market trading on Thursday. The S&P 500 jumped 1.5%. The Nasdaq Composite Index jumped 2.3%. Small cap Russell 2000 rose 2.35%.
US crude oil prices rose 4.3% to $102.73 a barrel, breaking the $100 level. Gasoline futures jumped 5.6 percent and natural gas futures rose 14 percent.
Copper futures rose more than 4%, boosted by China’s stimulus hopes.
The 10-year Treasury yield jumped 10 basis points to 3.01%. The 2-year Treasury yield rose 8 basis points to 3.04%, still pointing to a slight reversal.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) is up 1.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) is up 0.2%. The iShares Expanded Tech-Software Sector (IGV) ETF (IGV) advanced 1.9%. The VanEck Vectors Semiconductor Index (SMH) was up 4.6%.
The SPDR S&P Metals & Mining ETF (XME) rebounded 5.2% and the US Global X Infrastructure Development Index (PAVE) (PAVE) rose 2.3%. The US Global Jets ETF (JETS) rose 1.3%. SPDR S&P Homebuilders ETF (XHB) added 1.5%. The Energy Select SPDR ETF (XLE) is rebounding 3.6% and the Financial Select SPDR ETF (XLF) is up 1.45%. The SPDR Healthcare Sector Choice Fund (XLV) rose 0.4%.
Reflecting speculative stories stocks, the ARK Innovation ETF (ARKK) jumped 6.5% and the ARK Genomics ETF (ARKG) jumped 6.4%. Tesla shares are principal ownership via Ark Invest’s ETFs. CRSP stock is a notable ARKG property. Cathie Wood’s Ark also owns some shares of BYD.
Top 5 Chinese stocks to watch right now
flashing stock buy signals
BABA stock rose 2.75% to 122.39, moving above its 200-day moving average. It can also be said that it is clearing a bottom base, with resistance just above 121 over the past month. Alibaba’s stock fell to the bottom in March, along with many other Chinese names, but almost all bottom base formed under 200 days. However, the BABA stock’s relative strength line is at its highest level since November.
Bindudu (PDD) and Baidu have been trading above the 200-day lines recently.
CRSP stock jumped 7.6% to 78.20, above the 200-day line and ditched resistance from the past few weeks. But unlike Alibaba, Crispr stock does not have a bottom base, although it did make its lows in May. Crispr and Vertex Pharmaceuticals VRTX is testing a genetically modified drug that could offer a functional treatment for two blood diseases, sickle cell disease and beta thalassemia.
Alliance Resource Partners stock rose 5.6% to 19.41, rebounding above the 50-day line, breaking the downward sloping trend line and erasing the short-term resistance at 19.35. All of these provide reasons for early entry into this coal stockpile. ARLP stock is consolidating, but it needs more time to form a new base after strong gains for most of 2022.
ENPH stock jumped 6.1% to 206.84. Enphase has a buy point of 217.33 on a double bottom base. On Thursday, ENPH stock broke a downtrend in the handle, and on the day it topped the short-term level at 210.10. Investors looking to at least enter the Enphase stock may want to start a position on an early entry, given the large daily volatility in solar play.
Quanta stock rose 4.7% to 132.25, working towards 138.56 buying points from a somewhat embarrassing cup-handle base. Inside the deep handle, PWR stock broke the trend line and surpassed last week’s high at 129.86. But volume was light on Thursday, while Quanta stock rose 9.9% above the 50-day line.
Market Rise Analysis
The stock market rally continues to regain strength, with strong to strong gains for the major indices. Size decreased vs. Wednesday session, however.
Unlike on Wednesday, when stock losses easily outnumbered winners, market breadth was strong.
Pharmaceuticals remains the leading sector, although there are some tentative signs of broader strength.
The market rally remains under pressure, although conditions were less direct than they were at the end of last week.
The S&P 500, Dow Jones and Russell 2000 have regained their 21-day moving averages. The Nasdaq, which crossed the 21-day line on Wednesday, ran below the 50-day line in late June.
Notably, the compound is slightly above the 10-week moving average. This is where the Nasdaq hit resistance last week, which led to a sharp sell-off. The Nasdaq hit resistance at the 10-week line in early June and late April.
The ten-week line has been a resistance area for many individual stocks, but like apple (AAPL) and father of Google the alphabet (GOOGL) You get it right. TSLA stock is now slightly above the 10-week line after reversing lower from that key level last week.
Even if the major indicators convincingly liquidate their 10-week lines, they will meet resistance almost immediately at the early June highs.
Friday’s jobs report could be a big catalyst for the market, up or down. Given the market’s gains this week, especially for the Nasdaq, to the major resistance, a pullback after the jobs are out would not be surprising.
Copper, crude oil and other commodities rose again on Thursday, while Treasury yields rebounded. But herein lies a dilemma. If Treasury yields continue to rise, will this affect stocks, especially growth operations? If commodities rebound towards higher levels, this could revive inflation fears and prompt the Federal Reserve to raise interest rates for a longer period.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
With the market rally stabilizing somewhat, investors can add more exposure, and possibly expand temporarily into the medical sector. But the upside is still under pressure, and indicators are heading straight to levels that have served as fierce resistance for most of the year.
Stocks that are rising now, especially high-octane names like Crispr, could sell out quickly if the market reverses.
If the major indices liquidate their 10-week and 50-day lines, investors may gradually reduce their cash position. But the market rally will still encounter multiple resistance levels in quick succession.
After the jobs report and CPI data next week, earnings season will start to pick up. As the economy changes, corporate stewardship will be key and can have a significant impact on individual stocks, sectors, and the market in general.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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