Dow futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally crossed an inflection point, making a decisive move higher in the past week.
Investors should add cautious buying to their positions, not rush to increase exposure.
apple (AAPL), ExxonMobil (XOM) and chevron (CVX) made bullish moves on Friday after earnings. Exxon and CVX stock featured early entries above their 50-day streaks as they moved to the right side of the appropriate bases.
Apple stock became the first huge company to regain the 200-day streak, while its relative strength streak has already reached a new high. With earnings risk excluded, investors can use this as a potentially solid buy, and possibly a place to initiate a position in AAPL stock.
ON stock moved past a trendline entry on Friday, while RS line is at a new high. This would normally be a buy signal for this flagship game on chips, although the volume was light. but, anemme Earnings (ON) are due before Monday’s open, making any new buying very risky.
China EV makers New (NIO), Exping (XPEV) and Lee Otto (LI) must report deliveries in July before opening on Monday. China EV and battery giant BYD (BYDDF) That will likely follow in a day or two. All four of these devices are low-powered and deliveries of new models will begin in the next few weeks or months. BYD started selling its Seal on Friday, acquiring Tesla (TSLA) Model 3.
ON stock is at IBD Big Cap 20. Exxon was IBD Friday stock for the day. Apple and Chevron stocks are components of Dow Jones.
The video included in this article looks at Apple, Exxon Mobil, and Vertex Pharmaceuticals (VRTX).
Dow jones futures contracts today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
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 fell higher at the start of the week amid a Walmart (WMT) Earnings Warning and Other Concerns. But the major indices have moved sharply upwards over the past three days, closing at their weekly highs.
The Dow Jones Industrial Average rose 3% in stock trading last week. The S&P 500 jumped 4.3%. The Nasdaq Composite Index jumped 4.7%. Small cap Russell 2000 jumped 4.25%.
The 10-year Treasury yield fell 14 basis points to 2.64%, the lowest since early April, and continued to slip sharply from the June 14 peak of 3.48%. The yield curve inverts from 1 year to 10 years, even with the six-month rate (2.89%) much higher than the 10-year Treasury yield.
US crude oil futures rose 4.1% to $98.62 a barrel last week after topping $101 a barrel at one point on Friday. The nearest month oil contract is still down 6.8% in July.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) jumped 6.1% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 4.2%. The iShares Expanded Tech-Software (IGV) Index rose 2.8%. The VanEck Vectors Semiconductor Index (SMH) was up 4.6%.
The SPDR S&P Metals & Mining ETF (XME) rose 10.3% last week, with steelmakers in particular escalating. Global X US Infrastructure Development Corporation (PAVE) jumped 8.5%. The US Global Jets ETF (JETS) rose 2.7%. The SPDR S&P Homebuilders ETF (XHB) is up 2.9%. The Energy Select SPDR ETF (XLE) jumped 10.2%, with XOM and Chevron stocks two dominant holdings. The Financial Select SPDR ETF (XLF) is up 2.9%. SPDR Healthcare Sector Choice Fund (XLV) up 2%
Reflecting the speculative story stocks, the ARK Innovation ETF (ARKK) fell 2.4% last week and the ARK Genomics ETF (ARKG) fell 0.3%. Tesla stock remains a major ownership across Ark Invest ETFs. Ark also owns some shares of BYD and Xpeng.
Top 5 Chinese stocks to watch right now
China sales EV
Ahead of Monday’s opening, Chinese electric car makers Li Auto, Nio and Xpeng will release July shipments. There are reports that sales of electric and hybrid cars calmed somewhat in July after new subsidies and the end of lockdowns drove sales up sharply last month.
All three are expanding aggressively. Xpeng, which doubled its annual production capacity to 200,000 earlier this year, will reach 400,000 by the end of the year, or 600,000 in two shifts. But the electric car maker is said to be already offering discounts to boost sales. Is this a sign of weaker car prices in China’s electric car market in the coming months?
A new EV SUV later this year could boost demand for the Xpeng. Nio is adding two new models in the third quarter, while Li Auto will begin deliveries of its luxury L9 hybrid SUV in late August.
All three stocks have fallen significantly since late June. LI stock rose to a 52-week high, so its dip to the 50-day line looks more correct. In another week, Li Auto will have a new base. Nio and Xpeng stock is down again from its 200-day streak, with XPEV stock decisively down from its 50-day streak now as well.
Li Auto pared its losses to stay on the 50-day streak on Friday. Nio and Xpeng turned higher, with Nio’s stock moving above the 50-day line.
A government council has confirmed that electric vehicles and plug-in hybrid vehicles will be exempt from car purchase taxes next year, according to Friday reports.
EV giant BYD will likely announce July sales on Tuesday or Wednesday. BYD continues to rapidly expand its capacity, with massive expansion into Asia and Europe just about to begin. BYD Seal sales began Friday, with deliveries scheduled to begin in August. It’s BYD’s first apparent case going head-to-head with Tesla, with the Seal costing $10,000 less than the Model 3.
BYD stock is trading below the 50-day line, but could work on a new base as well after hitting record highs in late June.
Tesla China sales won’t end for a few weeks. Tesla Shanghai is undergoing some upgrades that will greatly boost capacity production. Tesla stock is up 9.15% over the past week to 891.47 after rising 13% the previous week on solid earnings. She is racing towards the 200 day streak but she hasn’t made it yet.
Tesla vs. BYD: Which EV giant is the best one to buy?
Market Rise Analysis
Last week was an inflection point in the stock market rally, which showed a real change of character. Amidst the biggest week of earnings season, important economic data and the latest rate hike and guidance from the Federal Reserve, the leading indicators rose – even when the news wasn’t positive.
After testing the 50-day lines early in the week, the major indicators rebounded to move decisively above this key level. The Nasdaq, which also crossed its highs in early June, had its best month since April 2020, when the coronavirus rally began.
The 50-day NASDAQ line is rising, and this is another sign that the “trend” is positive.
The market rally has returned to a confirmed uptrend.
The market is likely to have bottomed out. This does not necessarily mean that the major indicators will return to all-time highs.
The S&P 500 and Dow Jones are still facing early-June highs. Above that, the 200-day line looms as an important test for the market’s rally.
Investors seem to be betting that the economy is in the midst of a soft landing that will cool inflation to incentivize the Federal Reserve to slow down and then stop raising interest rates. If this outlook changes, markets could suffer.
Next week, investors will get jobs for June and the jobs report for July. Are labor markets beginning to decline significantly?
Another potential issue is energy prices. Higher energy prices are good news for XOM stock and other oil and gas operations. Gasoline futures – still far from all-time highs in June – rebounded from their recent lows, suggesting that prices at the pump will soon halt their recent decline. This can limit low inflation, and prevent consumers from shifting spending back to other areas.
Aside from energy, some names for lithium sound interesting Albemarle (ALB) and Levent (LTHM) earnings will appear next week. Some steel plays are trying to break down downtrends while recovering key levels.
Pharmaceutical and biotech stocks, such as VRTX stocks, are falling, but many of them are still doing well. A little force can introduce new inputs.
Hershey (HSY) and other food product stocks are showing strength.
Growth names are moving away from the bottom, but they are still mostly far from the highs.
Time to Market with IBD’s ETF Market Strategy
What are you doing now
With the market rally taking huge strides in the past few weeks, investors should add more exposure. Do this gradually and look for early entries. There is still a risk that this is a bear market rally that will lose steam, while sector turnover remains an issue.
There is not a lot of stock in a position to buy. Some of the ones that look interesting have earnings on click in the next few days, like Vertex or ON stock, complicating new buys.
With a lot of big profits out of the way, the next wave of results is likely to be less important for the entire market, but it will still be very relevant to individual stocks and sectors.
Market or sector ETFs are still a good way to ride the current market. Software, chips, or other technology ETFs are a way to make a rebound in growth stocks that are still out of position.
Keep working on your watchlists, and find emerging leaders.
Read the big picture every day to stay in sync with market trend, stocks and leading sectors.
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