Dow Jones futures fell slightly Sunday evening, along with S&P 500 futures and Nasdaq futures. China stimulus news is in focus, while earnings ramp up this coming week.
The stock market rally had a solidly positive week. The S&P 500 and Dow Jones hit record highs on Friday while the Nasdaq cleared key levels. The small-cap Russell 2000 rebounded from a key test. A number of leading stocks flashed buy signals while others are setting up, while many others kept running.
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Bulls Charge Ahead As Power Trend Flexes Strength; Uber, CEG, Generac Flash Buy Signals
Uber Technologies (UBER) gapped up as Tesla (TSLA) had a “toothless” robotaxi event. Tesla stock plunged, triggering a big sell signal.
Nvidia (NVDA) flashed multiple buy signals during while Taiwan Semiconductor (TSM) and Broadcom (AVGO) flashed buy signals. Taiwan Semi earnings are due this week.
But there was a breadth to market leadership far beyond AI chip names.
This is a time for investors to be heavily exposed, continuing to look for new buys while also paring laggards. Pay close attention to earnings season, both for what you own and major names that could affect your stocks.
In addition to Taiwan Semiconductor, key earnings this coming week include Netflix (NFLX), UnitedHealth (UNH), Intuitive Surgical (ISRG) and Goldman Sachs (GS). All are trading around buy points or alternate entries.
Nvidia stock is on IBD Leaderboard, SwingTrader and the IBD 50. Uber was Friday’s IBD Stock Of The Day.
Late Friday, Boeing (BA) said it plans cut 10% of its global workforce, roughly 17,000 jobs, delay the launch of its 777x jet and also warned that third-quarter sales will come in well below analyst consensus. That comes amid a crippling strike, with labor talks broken down. The Dow Jones giant fell slightly Friday evening, already trading at 23-month lows.
Dow Jones Futures Today
Dow Jones futures fell 0.1%. S&P 500 futures sank 0.1%. Nasdaq 100 futures declined 0.15%.
Crude oil prices fell 1%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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China Stimulus
China’s Finance Ministry on Saturday outlined new stimulus measures that were generally in line with expectations. They included Beijing borrowing more to help local governments finance their off-balance-sheet borrowing. Local governments can use the funds to buy unsold homes and turn them into subsidized housing. Major state banks will get help raising bolstering their capital. More broadly, officials said there’s room for the central bank to step up deficit spending, but laid out no plans.
There were no measures specifically aimed at bolstering consumers, who have been weak.
Notably, finance officials didn’t give specifics on the actual size of the spending, a potential concern.
Chinese stocks and related plays soared on those initial stimulus efforts, then retreated after the Oct. 8 disappointment.
Chinese consumer prices rose just 0.4% in September vs. a year earlier, lower than expected. Core inflation was only 0.1%, the lowest since February 2021. Producer inflation was negative for a 24th straight month.
Five Chinese Stocks Near Buy Points Amid Stimulus Bets
Stock Market Rally
The stock market rally had modest gains on the key indexes but it was an important week. The S&P 500 and Dow Jones hit record highs while the Nasdaq also cleared key levels.
The Dow Jones Industrial Average rose 1.2% in last week’s stock market trading. The S&P 500 index and Nasdaq composite climbed 1.1%. The small-cap Russell 2000 popped 1%, thanks to Friday’s 2.1% jump.
In addition, Nvidia and AI chip plays, cybersecurity firms and cruise lines had a big week. Several flashed buy signals, including Carnival (CCL) and CyberArk Software (CYBR). JPMorgan Chase (JPM) jumped Friday on earnings, one of several financials flashing buy signals in the session. Insurers, after some ups and downs on Hurricane Milton, are acting well.
Many industrial and aerospace names continue to lead, along with overseas e-commerce plays. Sweetgreen (SG) broke out Friday as a few restaurants look tasty. Oil and gas stocks have come on, with Exxon Mobil (XOM) right around buy points.
A number of medical stocks are setting up.
The 10-year Treasury yield rose nine basis points to 4.07%.
U.S. crude oil futures rose 1.6% to $75.56 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) advanced 1.8% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rallied 3.25%. The VanEck Vectors Semiconductor ETF (SMH) leapt 3.6%. Nvidia stock is the top holding in SMH, with Taiwan Semiconductor and Broadcom major members.
The ARK Innovation ETF (ARKK) eked out a 0.2% gain last week. Tesla stock remains a major holding across Ark Invest’s ETFs. Cathie Wood also owns a lot of Nvidia.
SPDR S&P Metals & Mining ETF (XME) rose 1.5% last week. U.S. Global Jets ETF (JETS) ascended 1.7%. SPDR S&P Homebuilders ETF (XHB) closed a fraction lower. The Energy Select SPDR ETF (XLE) fell 0.4%, with Exxon a huge holding.
The Health Care Select Sector SPDR Fund (XLV) gained 1.5%. The Industrial Select Sector SPDR Fund (XLI) stepped up 2.15%, with Uber stock a key member. The Financial Select SPDR ETF (XLF) climbed 1.8%, with JPMorgan a major member.
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Tesla Stock Sell Signal
Tesla stock dived 12.9% to 217.81, its worst weekly loss since April. Friday’s 8.8% tumble pushed Tesla decisively below its 50-day line in heavy volume. That’s a notable Tesla sell signal. Recent buyers are likely sitting on losses. Longer-term holders, who have a low cost basis, can choose to remain so.
Tesla also didn’t show off an “affordable” model, a still-unseen EV that’s supposed to start production in early 2025. That, along with a refreshed Model Y, is key to Tesla boosting or at least maintaining delivery levels next year.
Tesla Dives After Robotaxi Event; BYD Near Buy Zone After Powerful Move
Uber Technologies Flies
Uber stock skyrocketed 10.8% to 86.34 on Friday, gapping out of a base. Shares vaulted 16.2% for the week. Investors could use the 82.14 consolidation high as a buy point, roughly coinciding with Uber’s intraday low Friday. Shares are now just beyond the buy zone. Investors could wait to see if Uber consolidates for a few days, holding the bulk of Friday’s gains.
Analysts don’t see a Tesla robotaxi as a threat in the next few years, lifting a major overhang on Uber stock.
Stock Market: If Not Now, When
The stock market is at highs, just emerging from some key levels. Leading stocks are acting well. If not now, when?
This is the time to be heavily or fully invested. If you’re an experienced trader and have a large risk appetite, you could go on margin.
Hopefully you’ve been heavily exposed for quite some time. So the goal should be to optimize your portfolio, making incremental buys and various sells. The optimal portfolio should have leading stocks from a variety of top groups.
With the market looking so strong, it’s also a time for owning some highfliers with big daily swings. Even so, you also want some steadier performers.
So spend some time reviewing your holdings individually and collectively. Run through your screens. A large number of stocks are flashing buy signals or setting up.
Earnings season is ramping up, which means the potential for big swings for individual stocks but also sectors and the overall market. Know which of your holdings and top potential buys have earnings due, as well as the earnings dates for key companies that could swing your positions.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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