Dow Jones futures edged lower Monday morning, along with S&P 500 futures and Nasdaq futures. A big Apple AI push, the Tesla shareholder meeting and the latest Federal Reserve rate outlook "dot pot" headline major events.
Eli Lilly faces an FDA panel while Oracle, Adobe and Broadcom are key earnings this coming week.
The stock market rally saw the Nasdaq and S&P 500 hit record highs last week, even as the Russell 2000 retreated to back below the 50-day line. Despite weak breadth, a number of stocks flashed buy signals last week.
Nvidia surged again last week to a record high, edging above a $3 trillion valuation and topping Apple stock. A 10-for-1 Nvidia stock split took effect Friday night, with Monday trades reflecting that.
S&P 500 Rebalance
CrowdStrike, KKR and GoDaddy will join the S&P 500 index, S&P Dow Jones Indices announced Friday evening. They'll replace Robert Half, Comerica and Illumina in the benchmark index before the open on Monday, June 24.
These moves are part of the big quarterly rebalances in the S&P indexes.
CrowdStrike and KKR stock jumped early Monday, with GoDaddy also rising.
Meanwhile, Dell Technologies and Palantir Technologies, two profitable big caps seen as possible S&P 500 picks, fell modestly Monday as they were passed over again.
Nvidia and Eli Lilly stock are on IBD Leaderboard. Nvidia stock is on the IBD 50. Broadcom stock and Nvidia are on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures fell 0.1% vs. fair value. S&P 500 futures lost 0.1% and Nasdaq 100 futures edged lower.
The 10-year Treasury yield rose to 4.46%.
Crude oil futures climbed 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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Stock Market Rally
The stock market rally was both strong and mixed in the latest week.
The Dow Jones Industrial Average edged up 0.3% in last week's stock market trading, just regaining its 50-day moving average. The S&P 500 index popped 1.3% and the Nasdaq composite jumped 2.4%, both setting all-time highs.
Nvidia stock soared 10.3% to 1,208.88, giving it a market cap of $3.022 trillion. That passed up Apple stock, even though it extended a weekly win streak, ending with a $3.019 trillion valuation. Nvidia is behind No. 1 Microsoft, which ended the week at $3.149 trillion.
Overall breadth was weak-to-lackluster: The small-cap Russell 2000 and the S&P MidCap 400 both gave up 2.1% for the week, falling below their 50-day lines.
However, a lot of leading stocks flashed buy signals or set up. The First Trust Nasdaq 100 Equal Weighted Index ETF, which can be viewed a very rough proxy for growth stocks, gained 1% for the week, reclaiming the 50-day line.
The 10-year Treasury yield declined 8 basis points to 4.43%, but shot up 15 basis points on Friday.
U.S. crude oil futures fell 1.9% to $75.53 a barrel last week, but came off four-month lows mid-week.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF dipped 0.4% last week, with Microsoft, Oracle and Adobe stock big members and CRWD stock also in the ETF. The VanEck Vectors Semiconductor ETF leapt 4.9%, with Nvidia and AVGO stock key holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF and ARK Genomics ETF both climbed 3.1% last week. Tesla stock is a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF plunged 6.2% last week. The Global X U.S. Infrastructure Development ETF shed 3.6%. U.S. Global Jets ETF descended 0.55%. SPDR S&P Homebuilders ETF and the Energy Select SPDR ETF slumped 3.4%.
The Health Care Select Sector SPDR Fund climbed 1.9%. The Industrial Select Sector SPDR Fund fell 1%. The Financial Select SPDR ETF dipped 0.4%.
Why This IBD Tool Simplifies The Search For Top Stocks
Apple AI Push
Apple holds its annual Worldwide Developers Conference, starting on Monday. The iPhone giant is expected to make a long-awaited artificial intelligence push at WWDC, with CEO Tim Cook giving a keynote address at 1 p.m. ET.
Apple is expected to roll out in-device generative AI tools for the iPhone, iPad and other devices. Apple's digital assistant Siri is likely to get a brain transplant with gen AI features. Apple is likely to rely on an alliance with ChatGPT creator OpenAI, which is backed by Microsoft.
Shares rose a fraction early Monday.
Apple stock rose 2.4% to 196.89 last week, moving closer to a 199.62 cup-base buy point. Shares ended Friday at a 2024 closing high, up 2.2% for the year.
AAPL stock has rallied 20% from a 52-week low of 164.07 on April 19. That's largely in anticipation of Apple's AI push.
So there's a risk of "buy the rumor, sell the news" for Apple stock, even if the AI announcements are generally seen as positive.
Microsoft Seen Winning AI Race With OpenAI Partnership
Tesla Shareholder Meeting
Tesla holds its annual shareholder meeting late Thursday, where votes will be tallied for reapproving a massive 2018 pay deal for Elon Musk as well as reincorporating the EV giant in Texas, from Delaware. Those proposals follow a Delaware court striking down the pay deal earlier this year. If the votes pass, Delaware could still reject the $56 billion pay deal for various reasons.
Musk has given multiple not-so-veiled threats that he could shift AI and robotics efforts to his other companies if he doesn't get the pay deal — and perhaps more beyond that. Indeed, Musk apparently diverted thousands of Nvidia AI chips from Tesla to his social site X and AI startup xAI, CNBC reported this past week.
While Tesla's business is overwhelmingly related to EVs, most of Tesla stock's valuation is tied to AI, robotics and Full Self-Driving.
So Tesla stock could rally on "yes" votes, even though the pay deal is heavily dilutive for shareholders.
Meanwhile, Musk wrote Saturday night that a Model Y refresh won't happen in 2024.
Tesla stock dipped 0.4% to 177.40 last week, holding above the 50-day. It has a four-weeks-tight entry of 186.88, and is on track to craft a base in another week. However, TSLA stock is some distance below its 200-day line.
FDA Panel Reviews Eli Lilly's Alzheimer's Drug
An FDA advisory panel on Monday will review Eli Lilly's experimental Alzheimer's drug donanemab, which removes built-up plaque in the brain known as beta amyloid. But there are potentially serious side effects.
Eli Lilly stock has boomed over the past year primarily on excitement about its diabetes and weight-loss treatments, but donanemab is among the other irons in the fire.
Eli Lilly stock popped 3.6% to 849.90, its seventh straight weekly gain. LLY stock hit record highs, and is now extended from a buy point.
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Fed Meeting, CPI Inflation
The two-day Fed meeting ends Wednesday with a policy statement at 2 p.m. ET followed by Fed chief Jerome Powell at 2:30 p.m. No action is expected, but the Fed's latest economic projections and policymakers' updated "dot plot" rate outlook will be key, along with Powell's comments.
In March, Fed policymakers narrowly favored three cuts in 2024, with hawks favoring two. This time, dovish officials may back two Fed rate cuts, with hawks at one or zero.
The Fed news will come hours after the May consumer price index, due before Wednesday's open.
The CPI inflation report may show cooler headline figures, with gasoline prices heading lower. Core CPI is likely to show modest monthly gains but not enough to satisfy the Fed.
On Thursday, the producer price index is due. Several components of the PPI feed directly into the Fed's favorite inflation gauge, the core PCE price index.
Here Are The Latest Fed Rate-Cut Odds As 'Dot-Plot' Looms
Big Tech Earnings
Oracle reports late Tuesday, Broadcom on Wednesday and Adobe on Thursday.
Oracle stock is near early entries within a consolidation. Broadcom stock is just below a buy point, and arguably already actionable if it weren't for earnings. Adobe stock is just above a 52-week low in a sharp, four-month downturn.
These represent the last flurry of Big Tech earnings for several weeks, so will have extra importance for investors. All three stocks have claims to be AI plays.
Market Rally Analysis
The Nasdaq and S&P 500 are at record highs. Most importantly, a large number of stocks have flashed buy signals over the past week, as others set up.
So while market breadth hasn't been stellar, leading stocks' breadth and depth has been sufficient for new buys. You can continue to do so as long as the market and your own holdings are acting well.
Review your portfolio, grading your various stocks. Are there "A" stocks that you'd like to add a few more shares to? Do you have "C" stocks that could make way for potentially better names?
Run your screens to have watchlists up to date.
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