Dow Jones futures fell modestly Monday morning, along with S&P 500 futures and Nasdaq futures.
Tesla earnings are on tap amid signs that a Model Y refresh is coming soon. ServiceNow and GE Aerospace also are big names in a busy week.
The stock market rally is riding a six-week win streak, with the Dow Jones and S&P 500 hitting fresh highs last week. Market leadership is broad in terms of sectors and temperament.
Nvidia, Tesla rival BYD, cybersecurity play SentinelOne, insurance play Chubb and Spotify are all actionable. Warren Buffett's Berkshire Hathaway has significant stakes in BYD and Chubb stock.
While potential risks loom on the horizon, this is a time for investors to be heavily invested, making modest moves now to optimize portfolios.
Nvidia stock is on IBD Leaderboard and the IBD 50. Nvidia and Spotify stock are on SwingTrader. ServiceNow stock is on the IBD Big Cap 20. Chubb was Thursday's IBD Stock Of The Day.
Dow Jones Futures Today
Dow Jones futures fell 0.3% vs. fair value. S&P 500 futures lost 0.35%. Nasdaq 100 futures retreated 0.6%.
The 10-year Treasury yield rose a few basis points to 4.13%. Crude oil futures climbed more than 2%, back to nearly $71 a barrel.
China cut its one-year loan prime rate by 25 basis points to 3.1% vs. views for a drop to 3.15%. The five-year loan prime rate declined 25 basis points to 3.6% vs. views for 3.65%. But Hong Kong's Hang Seng fell 1.6%.
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 continued to trend higher, with the major indexes all rising for a sixth straight week.
The Dow Jones Industrial Average rose nearly 1% in last week's stock market trading, hitting another record high Friday. The S&P 500 index climbed 0.85%, setting an all-time high Thursday and record close Friday. The Nasdaq composite advanced 0.8%, not far from record highs.
The small-cap Russell 2000 jumped 1.9%, hitting a two-year closing high on Wednesday.
More-speculative names are making big moves, including in the nuclear, bitcoin and China spaces. But plenty of traditional growth, defensive growth and even more-defensive names from a variety of sectors are showing strength.
The 10-year Treasury yield was flat at 4.07% after testing the 4% level during the week.
U.S. crude oil futures tumbled 8.4% to $69.22 a barrel last week.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF advanced 0.8% last week. The iShares Expanded Tech-Software Sector ETF fell 0.5%, with ServiceNow stock a significant holding. The VanEck Vectors Semiconductor ETF slumped 2%, with Nvidia stock the No. 1 component.
The ARK Innovation ETF climbed 3% last week and ARK Genomics ETF finished flat. Tesla is a major holding across Ark Invest's ETFs, but Cathie Wood also has built up a big stake in Nvidia in recent months. Ark also owns a small stake in BYD stock.
SPDR S&P Metals & Mining ETF popped 3.1% last week. U.S. Global Jets ETF soared 7.2%. SPDR S&P Homebuilders ETF leapt 3.5%.
The Energy Select SPDR ETF retreated 2.6% and the Health Care Select Sector SPDR Fund lost 0.6%.
The Industrial Select Sector SPDR Fund rose 0.6%. The Financial Select SPDR ETF rallied 2.4%.
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Tesla Model Y Refresh
Over the weekend, online chatter suggested that the Tesla Shanghai plant is about to start low-level production of the updated "Juniper" Model Y. That might indicate actual deliveries in China by early 2025. It's unclear when Tesla's Berlin and Austin plants might begin output.
Like the Model S, X and 3 updates — which didn't boost sales much — the "Juniper" Model Y likely will have cosmetic exterior changes.
Tesla Earnings
Tesla earnings are expected to fall 9% which would be the fifth straight year-over-year decline, though much smaller than in the prior four quarters. Sales growth should climb 9%, buoyed by China deliveries.
But the focus likely will be on Elon Musk and the Tesla earnings call. Investors and analysts may want some clues about the still-unseen "affordable" vehicle set to start production in the first half of 2025. Any confirmation that production of the Model Y refresh is starting or about to start would be welcome.
Tesla stock rose 1.3% to 220.70 last week, but remains below its 50-day line. Shares have plunged 15.6% in October in the wake of less-than-stellar Q3 deliveries and the Oct. 10 robotaxi event. TSLA stock has a 264.86 cup-with-handle buy point.
Tesla shares declined 1% early Monday.
Stocks In Buy Zones
Nvidia stock rose 2.4% to 138 last week. The AI chip leader is still in range of a 131.26 buy point. Shares did hit a record 140.89 intraday Thursday, but haven't closed above the left-hand high of the consolidation, at 140.76. That would be the traditional buy point.
Strong earnings and guidance from Nvidia chipmaker Taiwan Semiconductor helped lift NVDA stock and other AI plays.
SentinelOne stock rose 2.5% to 26.36, flirting with a 26.62 consolidation buy point, according to MarketSurge. Investors could have used 25.54 or a downward-sloping trendline for an earlier entry in the prior week. Several cybersecurity stocks are trading around buy points.
Spotify stock climbed 3.3% to 378.81, moving off the 21-day line. That cleared a trendline within a tight pattern that was mostly in the buy zone of a prior flat base. Investors could have used Friday's move as its own buy signal or place to add to shares.
Chubb stock jumped 5.2% to 301.66 for the week, breaking out past a 294.18 flat-base buy point. The Warren Buffett-backed insurer popped Thursday as industry peer Travelers gapped higher on earnings.
BYD stock fell 3.1% for the week, but jumped 7.2% to 36.86 on Friday. That pushed the China EV giant back above a 32.69 buy point from a long, deep cup base. Shares have surged and pulled back in recent weeks with other Chinese stocks as investor sentiment shifts on China stimulus moves.
BYD stock is up 33.2% so far this year, the only EV maker that's up in 2024.
The profitable, Warren Buffett-backed BYD is likely to hit 4 million EV vehicle sales in 2024 vs. just over 3 million in 2023, while Tesla sees deliveries fall slightly from last year's 1.8 million.
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What To Do Now
While earnings season, the presidential election and geopolitical issues are potential risks over the next few weeks, the market rally is acting very well. Leading stocks are thriving. In fact, having some market concerns means that there's a wall of worry for stocks to keep climbing.
Still, sentiment indicators show investors are solidly bullish, though not dangerously so.
Investors should be heavily invested for some time, so you don't need to make big moves now. Optimize your portfolio, making incremental purchases or add-on buys while trimming some losers. You could also make changes to make sure you have leaders from a variety of sectors as well as having some mix of steady performers to highfliers, depending on your risk tolerance.
Doing this means you need your watchlists up to date. Also pay close attention to key earnings reports for your portfolio.
It's also vital to stay engaged. If earnings season or other news changes the character of the market rally or individual holdings, you need to be ready to adjust.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
