The S&P 500 index hit a 14-month high after last week’s stock market rally. The Dow Jones and Nasdaq Composite are back near their 2023 highs. apple (AAPL) closed Friday with a market cap of $3 trillion for the first time.
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Dow Jones futures will open Sunday night along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) and Chinese EV rivals will be in the spotlight over the weekend. Li Auto has already reported delivery in June.
Nvidia (NVDA), hubspot (hub), Marriott International (March), general electric (GE) and JP Morgan Chase (JPM) are all flashing buy signals.
The only concern is that the Nasdaq market has already extended again, increasing the risk of another market decline in the near future.
Tesla stock, Nvidia and HubsSpot are on the rise IBD Leaderboard. HubSpot is IBD50. hubspot and tesla stocks IBD Big Cap 20.
The video embedded in this article discusses major market moves and analyzes stocks from Nvidia, HubSpot, and JPM.
Lee Auto (Lee) reported record overnight deliveries in June and Q2 with Chinese EV startup Nio (NIO) and XPeng (XPEV) will announce the results on Saturday.with Tesla BYD (BYDDF), June and Q2 sales may be released over the weekend.
dow jones futures today
Dow Jones futures open Sunday at 6:00 pm ET along with S&P 500 and Nasdaq 100 futures.
Note that overnight trading such as Dow Futures does not necessarily translate into actual trading in the next regular stock market.
IBD experts analyze hot stocks during the stock market rally on IBD Live.
stock market rise
The stock market rally on Monday extended a temporary pullback, but then rebounded strongly.
The Dow Jones Industrial Average rose 2% in last week’s stock market trading. The S&P 500 Index rose 2.35%. The Nasdaq Composite rose 2.2%.Small-cap Russell 2000 jumped 3.7%
In the first half of 2023, the S&P 500 Index rose 15.9%, marking its best six-month start since 2019. The Nasdaq rose 31.7%, its highest since 1983.
The Dow Jones Industrial Average rose 3.8% and the Russell 2000 rose 7.4%.
AAPL shares rose 3.9% last week, up 49% year-to-date, to a market cap of $3.05 trillion. This is the first time Apple or any other company has completed a deal at his $3 trillion valuation.
Yields on 10-year U.S. Treasuries rose 8 basis points to 3.82%, hitting a three-month high on Friday morning.
U.S. crude futures rose 2.1% last week to $70.64 a barrel, but fell 6.65% in the quarter. Copper futures fell 1.6% for the week, but ended a six-day losing streak on Friday.
ETFs
Among Growth ETFs, Innovator IBD 50 ETF (FFTY) rose 5.3% last week to a seven-month high, but the Innovator IBD Breakout Opportunity ETF (game) jumped 5.25%. iShares Augmented Technology Software Sector ETF (IGV) rebounded 2.7% in IGV-held HUBS shares. VanEck Vectors Semiconductor ETF (SMH) rose 3.2%. Nvidia shares are SMH’s number one holding.
A stock that reflects a more speculative story, the ARK Innovation ETF (Arkuk) was up 4.75% last week, while the ARK Genomics ETF (Argu)Four%. Tesla shares are the number one holding of all Ark Invest ETFs. Kathy Wood’s Ark also owns a small stake in BYD.
SPDR S&P Metals & Mining ETF (XME) rose 4.4% last week, returning to the 200-day line for the first time in two months. Global X US Infrastructure Development ETF (pave) rose 4.6%, setting a new all-time high. US Global Jets ETF (Jets) surged 6% to a 52-week high. SPDR S&P Homebuilders ETF (XHB) rose 4.5%, rising for the fifth straight week. Energy Select SPDR ETF (XLE) rebounded 4.9%, while the Healthcare Select Sector SPDR Fund (XLV) increased by 0.55%. Industrial Select Sector SPDR Fund (XLI) rose 3.9%, just below its all-time high. GE shares are the primary component of XLI.
Financial Select SPDR ETF (XLF) rose 3%, ending above the 200-day line for the first time since early March. JPM shares are major holdings. SPDR S&P Regional Banking ETF (KRE) rose 3.2% after falling 8.1% the week before.
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Stocks in the buy zone
Nvidia shares rose 0.2% last week to 423.02, but rebounded 3.6% on Friday, rising from near the 21st line and breaking a brief downtrend. This provided a place to start a position or add a few shares to an existing position. This week, NVIDIA ignored reports that the Biden administration would expand restrictions on chip exports to China and add more NVIDIA products.
HUBS shares surged 3.9% last week to 532.09, rebounding from the 21-day line and breaking much of the tight four-week pattern. During the day on Friday, HubSpot temporarily rose above the buy point at 535.12.
MAR stock rose 7.1% to 18.69, creating a big week of gains, retracing the 50-day line and clearing the buy point just above 183 to hit a 52-week high. Marriott’s trading volume was below average throughout the week.
GE shares rose 5.85% to 109.85, rebounding from the 10-week line and clearing the three-week tight buy point of 108.90, according to MarketSmith’s weekly chart.
JPM shares rose 4.75% last week to 145.44, with all gains from Thursday to Friday. It broke the buy point of 143.37 on a flat basis, hitting a 16-month high. JP Morgan and other big banks passed the Fed’s stress test late Wednesday as expected. Large banks, especially JP Morgan, may have a long-term competitive edge against local banks following the recent crisis.
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Chinese EV sales
Li Automobile announced that it sold 32,575 units in June, surpassing the 30,000-unit mark for the first time. This is a 150% increase from the previous year and a 15.2% increase from May. Sales in the second quarter were 86,533 units, an increase of 201.65% compared to the second quarter of 2022, when production and consumption in China were hit by the COVID-19 shutdown.
Li Automobile CEO Li Xiang said on Friday that sales in June exceeded 32,000 units, setting a new record and easily surpassing the target of 30,000 units.
In the third quarter, the hybrid SUV maker aims to surpass 10,000 monthly deliveries of the L8 and L9 and reach 15,000 monthly sales of the L7. In the fourth quarter, Li aims to deliver 40,000 units per month. It will also launch its first all-electric model in the fourth quarter.
Nio is looking to catch up by picking up momentum with the delivery of the fully refurbished ES6 SUV. Nio has also made several price cuts in the past few weeks. XPeng sales are likely to be sluggish, but EV makers have high hopes for the G6 crossover, which will begin delivering cars in July.
EV giant BYD is expected to report record monthly and quarterly sales of perhaps around 250,000 vehicles in June.
Lee Motors shares rose 5.7 percent to 35.10 last week, the highest level in nearly 10 months. Nio stock rose about 15% to 9.69, approaching the 200-day line. Xpeng’s stock rose 36% to his 13.42, ending a seven-month collapse.
BYD shares fell 1.7% last week to 32 shares, but rebounded from the 50-day line on Friday. The stock is in a buy range of 31.07 points.
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Tesla delivery
Tesla deliveries are expected to rise to about 445,000 in the second quarter, according to FactSet. This is an increase from 422,875 in the first quarter and 405,278 in the fourth quarter.
After big price cuts around the world in the first quarter, Tesla made some formal price cuts and a few small price increases in the second quarter. But it also offered significant discounts on inventory, as well as other incentives that could further squeeze gross margins. But that won’t be clear until the second-quarter earnings report in late July.
Production may have again outpaced shipments, even though Tesla curbed production well below capacity.
Tesla shares rose 2% last week to 261.77 after falling 6.1% on Monday. The stock has more than doubled in 2023, well above its recent buy point.
market rise analysis
Last week’s stock market rally staged an almost textbook bullish rally. The Dow Jones, S&P 500 and Nasdaq Composite all posted gains after weeks of testing or falling below their 21-day moving averages. The S&P 500 hit a 14-month high and the Nasdaq hit a 14-month high. The Dow is just below its 2023 high.
The Russell 2000 has not had a very solid week outside, but has roared toward its recent highs.
Invesco S&P 500 Equal Weight ETF (RSP) rose 3.4% to its highest level in nearly four months and outperformed the S&P 500.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 2.8%, outpacing the 1.9% rise of the Nasdaq 100.
The up/down line has improved over the last few days, especially on the New York Stock Exchange, after weakening in the recent pullback.
A number of strong stocks in various groups, including chips, software, travel, housing, industrials, retail/restaurants and even some financials, issued and flashed various buy signals.
The only yellow flag is that the market is bullish too strong.
The risk of a rally increases when the Nasdaq rises 6-7% above the 50-day line. Over the past few years, the Nasdaq stock has climbed as high as 10% or more, including a mid-June high. The market decline was so shallow and short-lived that the Nasdaq is already 7.6% above the 50-day line. The Nasdaq 100, which includes Apple, Nvidia, Tesla and other big companies, is 8.3% above the 50-day line.
The S&P 500 index is also 5.3% higher than the 50-day line, and extension is imminent.
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what to do now
The stock market selloff was short-lived, creating many buying opportunities across sectors.
Investors may have added exposure in the past few days. You can still do so, but do so gradually and be prepared to cut your losses quickly. The risk of the market falling again is already high.
Mike Webster returned to IBD Live on Friday to discuss the importance of rating stocks and buy potential across a variety of fundamental and technical factors. Review your portfolio to see which stocks you want to let go and which stocks you want to add.
Run screens to enhance your watchlist. Pay close attention to stocks near or in the buy zone that deserve an A grade.
Read “The Big Picture” daily to stay on top of market direction and key stocks and sectors.
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