Dow Jones futures tilted higher Sunday night, along with S&P 500 futures and Nasdaq futures. President Joe Biden mulled his re-election campaign while French parliamentary elections took a hard right.
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Nasdaq Reverses After Hitting 18,000; Uber, JPMorgan, Hilton In Focus
The stock market rally gave some mixed signals last week, but the Nasdaq power trend is intact. Meta Platforms (META), Amazon.com (AMZN) and Tesla (TSLA) broke out last week, with software makers AppLovin (APP), Monday.com (MNDY) and ServiceNow (NOW) flashing buy signals. Nvidia (NVDA) found its footing.
The Justice Department has told Boeing (BA) that it will charge it with fraud, urging the Dow aerospace giant to plead guilty or risk a trial, according to multiple reports. Meanwhile, Boeing reportedly has agreed to buy supplier Spirit AeroSystems (SPR) for $4.7 billion in an all-stock deal.
Meanwhile, China EV makers report June sales on Monday.
Dow Jones Futures Today
Dow Jones futures edged higher vs. fair value. S&P 500 futures rose 0.15% and Nasdaq 100 futures climbed 0.2%.
The 10-year Treasury yield rose several basis points to 4.41%.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Biden Mulls Campaign
President Biden discussed his re-election campaign at Camp David Sunday with members of his family, who urged him to fight on, the New York Times reported citing sources. That followed Biden’s disastrous performance during Thursday night’s presidential debate, which raised concerns about his fitness for office.
Top Democratic officials have publicly voiced their continued support, despite many privately having serious concerns.
Biden’s Odds Fall
According to PredictIt, Biden’s odds of receiving the Democratic nomination are at 60% as of Sunday night vs. 72% on Friday and 85% before the debate. Biden’s odds of winning the presidency are at 30%, up from 25% Saturday evening but down vs. 36% on Friday and 48% on Thursday before the debate.
Donald Trump’s odds of winning have barely risen even as Biden’s chances have faded. PredictIt sees Trump with a 55% chance vs. 59% on Friday and only up from 53% before the debate.
Still, rising speculation of a second Trump presidency with a GOP-led Congress hit solar and hospital stocks Friday.
Trump’s Debate Win Gave The S&P 500 A Boost. Then This Happened.
French Takes Right Turn
France’s far-right National Front party, led by Marine Le Pen, won a big victory in the first round of parliamentary voting Sunday. A left-wing alliance is set to finish second, while President Emmanuel Macron’s centrist party lags in third place.
The leftist group reportedly is seeking alliances, willing to moderate its agenda to stop Le Pen’s National Front.
A hung parliament is likely after the final round of voting on July 7, though the National Front could end up with a majority.
Macron called the snap election on June 9, triggering market disruption in France and Europe.
But the euro rose overnight.
Stock Market Rally Last Week
The Dow Jones Industrial Average edged down 0.1% in last week’s stock market trading after a solid start to the week. The S&P 500 index dipped 0.1% and the Nasdaq edged up 0.2% after both reversed from record highs Friday morning.
The small-cap Russell 2000 popped 1.3%, reclaiming its 50-day line.
Looking on a weekly chart, the Nasdaq hasn’t shown any real weakness, rising for the past four weeks and nine out of the last 10.
The Nasdaq is 5.9% above its 50-day, slightly extended even with recent sideways action A longer pause or mild pullback would let stocks set up and give more room for the next advance.
China EV Sales
Investors will get June and second-quarter sales from China EV makers Nio (NIO), Li Auto (LI), XPeng (XPEV) and Zeekr (ZK) early Monday and perhaps EV and battery giant BYD (BYDDF).
Tesla and Rivian (RIVN) should release figures early Tuesday. Most automakers will release Q2 U.S. sales on Tuesday as well.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.4% last week.
The iShares Expanded Tech-Software Sector ETF (IGV) jumped 2.4%, its fourth straight strong weekly advance. ServiceNow stock and AppLovin are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) sank 1.6%, but came off lows somewhat. Nvidia stock is the dominant SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 1.4% last week and ARK Genomics ETF (ARKG) tumbled 3.5%, back toward the April lows. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
Time The Market With IBD’s ETF Market Strategy
Megacap Stocks
Nvidia stock fell 2.4% for the week to 123.54. But after tumbling 6.7% on Monday, capping a three-day sell-off, the AI chip leader rebounded and steadied above the 21-day moving average. NVDA stock could use a longer break, forging a new base and letting the 50-day line catch up.
Meta stock rose 1.9% to 504.22. Shares cleared a 514.01 cup-with-handle buy point on Thursday, but fell nearly 3% on Friday. However, it’s still around some early entries within the handle.
Amazon stock gained 2.2% to 193.25, moving past a 191.70 flat-base buy point. Shares fell 2.3% on Friday.
Tesla stock jumped 8.1% to 197.88, breaking out from a 191.08 handle buy point. The buy range extends to 200.63. TSLA stock hit resistance at the 40-week line on Friday, but did close higher.
Tesla’s big weekly gain came as several analysts slashed second-quarter delivery estimates ahead of the EV giant’s Tuesday news release.
Tesla may cut China prices in the next few days, according to local media.
Amazon Hit This Milestone In The Andy Jassy Era. What’s Next?
Software Stocks In Buy Zones
AppLovin stock leapt 5.9% for the week to 83.22, clearing a tight trendline and a short-term high of 82.66 on Thursday, offering an early entry. The official flat-base buy point is 88.50, according to MarketSurge.
Monday.com stock jumped 7% last week to 240.76, rebounding from the 50-day line within a short, mini-double-bottom consolidation next to another base. The official buy point is 249. However, MNDY stock cleared a trendline on Thursday. On Friday, the software maker tested a short-term high of 239.54, which roughly coincides with the prior base’s buy point of 239.22.
ServiceNow stock rallied just over 5% to 787.19, breaking a trendline. Shares have surged 23% from the May 31 intraday low of 637.99. The official buy point is 815.32. Ideally, NOW stock would forge a handle.
Meanwhile a number of software stocks are running up from the bottom, trading within bases, while a few leaders are extended.
Investors could use IGV — which has a chart a lot like ServiceNow’s — or other software ETFs to play this sector move.
Market Rally Analysis
There are lots of ways for active investors to play the current stock market rally.
A highly active trader might have made numerous trades over the past couple of weeks, catching some winners while also exiting a number of stocks that quickly faded amid the mini-rotations. Other traders may have chosen to take little or no action depending on how their existing positions behaved.
The key is to find the investing style and rules that work for you.
Pay attention to the market and sector action. Many software names should be on your watchlists. And while financials and industrials backed off, many stocks in those areas are very close to being actionable.
The presidential race is a huge wild card, with Biden’s debate performance and the related fallout creating a lot more uncertainty months ahead of Election Day.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Nvidia stock, Amazon and Meta are on IBD Leaderboard. Amazon and Meta stock are on SwingTrader. Nvidia, Monday.com and ServiceNow stock are on the IBD 50. AppLovin was Friday’s IBD Stock Of The Day while Amazon stock was Thursday’s pick.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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