Dow Jones futures rose modestly Friday morning, along with S&P 500 futures and Nasdaq futures, ahead of the March jobs report. Oil prices fell below $100 a barrel. China stocks rose on EV sales and hopes for avoiding a delisting crisis.
The stock market rally sold off into the close on Thursday, while crude oil prices plunged as President Joe Biden announced a major release of U.S. strategic reserves.
GameStop said late Thursday that it would seek shareholder approval for a GME stock split, following a similar plan from Tesla earlier in the week. GME stock leapt overnight, while fellow meme stocks AMC Entertainment and Bed Bath & Beyond also popped.
The March jobs report looms large Friday morning. It's also a big day for auto sales as well. General Motors and other big automakers will release U.S. auto sales data Friday morning. China EV makers Nio, Li Auto and Xpeng reported March EV deliveries before the open.
Tesla could announce global first-quarter deliveries as soon as Friday.
Advanced Micro Devices tumbled on an analyst downgrade, even as rival Nvidia is holding its big recent rebound. The AMD and Nvidia stock charts show the risks and rewards of buying former leaders breaking steep downtrends.
Auto Sales
GM will release first-quarter U.S. auto sales on Friday, while Toyota, Stellantis and others will release U.S. results for March and Q1. Ford Motor may release its results early next week. Industry sales are likely to be down vs. February and off sharply vs. March 2021, as chip woes and other supply-chain constraints limit production, despite strong demand. Shares of GM, Ford, Toyota and Stellantis are slightly below their falling 50-day moving averages.
China EV Sales
Li Auto delivered 11,034 Li One hybrid SUVs, up 125% vs. a year earlier and 31% from February. That was at the high end of the company's implied target of roughly 9,300-11,300 vehicles. Li sold 31,716 vehicles for the first quarter.
Nio delivered 9,985 vehicles in March, up 38% vs. a year earlier, vs. implied company targets of 9,200-10,200. That includes 163 ET7 luxury sedans, which began deliveries on March 28. Nio delivered 25,768 vehicles in Q1, with 9,652 in January and 6,131 in February.
XPeng delivered 15,414 EVs in March, up 202% vs. a year earlier and a 148% increase vs. February. Q1 deliveries hit 34,561 vehicles. That topped company forecasts for 33,500-34,000 EVs in Q1 and implied March deliveries of around 14,600.
Li Auto stock and Nio popped 6% early Friday, signaling returns back above their 50-day moving averages. XPEV stock gained 9%. All three China EV makers are well below any possible buy points.
U.S.-listed Chinese stocks rebounded generally Friday, including Alibaba and JD.com, on a Bloomberg report that Beijing is willing to give U.S. auditors full access to more than 200 Chinese companies listed in New York. That would end delisting fears for all but a few U.S.-listed Chinese companies with sensitive data.
Tesla Deliveries
Tesla deliveries are likely to come on Saturday, though they could come as early as Friday or as late as Tuesday. That report could be a big catalyst for Tesla stock, which currently has a 1,208.10 cup-base buy point, according to MarketSmith analysis. Investors expect strong results for the EV giant, though the Tesla Shanghai plant is temporarily closed again over China Covid concerns. Tesla stock fell 1.5% to 1,077.60.
TSLA stock could be working on a handle, but needs a meaningful pullback to shake out weak holders after a huge run from the bottom of its base.
Microsoft stock and Nvidia are on IBD Leaderboard. Microsoft and Google stock are IBD Long-Term Leaders. Google, Microsoft, Nvidia, AMD and Tesla stock are all on the IBD 50.
GME Stock Split Plan
GME stock shot up 13% overnight as GameStop said it would ask shareholders to approve a stock split of some kind. On Monday, TSLA stock spiked 8% as the EV giant said it would seek approval for a split at the annual shareholder meeting. AMC stock and BBBY stock rose slightly early Friday.
Stock splits had fallen out of favor since the dot-com era, but have recently revived for share prices that have topped 1,000. For Tesla, Google parent Alphabet and Amazon.com, which also plan big splits, a cheaper share price makes options contracts in reach of far more investors. But GME stock, which closed at 166.58 on Thursday, is not in that category. For AMC and BBBY stock, which closed above 20 on Thursday, splits really aren't on the table.
Dow Jones Futures Today
Dow Jones futures rose 0.6% vs. fair value. S&P 500 futures climbed 0.6%. Nasdaq 100 futures advanced 0.7%.
The 10-year Treasury yield jumped 8 basis points to 2.4%. The 2-year yield climbed to 2.38%, threatening to top the 10-year rate, inverting the yield curve.
Crude oil prices fell more than 1% to $99 a barrel. Gold and copper prices also retreated.
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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Jobs Report
The Labor Department will release the March jobs report at 8:30 a.m. ET. Economists expect nonfarm payrolls to show a gain of 455,000, with the jobless rate dipping to 3.7%. Wage gains and labor force participation will be closely watched.
The jobs report will likely swing Dow Jones futures and bond yields.
Stock Market Rally
The stock market rally pulled back for a second straight session, adding to losses late in the day as the major indexes closed out their first losing quarter in two years.
The Dow Jones Industrial Average fell 1.6% in Thursday's stock market trading. The S&P 500 index also slumped 1.6%, with AMD stock its biggest loser. The Nasdaq composite gave up 1.5%. The small-cap Russell 2000 retreated 1%.
U.S. crude oil prices plunged 7% to $100.28 a barrel, the lowest close in two weeks. President Joe Biden announced a major release of strategic oil reserves, supplying 1 million barrels a day for the next six months. That will provide an incremental boost to global oil supplies amid Russia's Ukraine invasion. Energy stocks fared relatively well.
The 10-year Treasury yield fell 3 basis points to 2.33%.
ETFs
Among the best ETFs, the Innovator IBD 50 ETF sank 0.9%, while the Innovator IBD Breakout Opportunities ETF fell 0.7%. The iShares Expanded Tech-Software Sector ETF pulled back 0.75%. The VanEck Vectors Semiconductor ETF retreated 2%, with AMD stock and Nvidia major components.
SPDR S&P Metals & Mining ETF dipped 0.6% and the Global X U.S. Infrastructure Development ETF declined 1.15%. U.S. Global Jets ETF edged up 0.3%. SPDR S&P Homebuilders ETF plunged 3.9%. The Energy Select SPDR ETF slid 1.35%. The Financial Select SPDR ETF stumbled 2.3%. The Health Care Select Sector SPDR Fund lost 1%
Reflecting more-speculative story stocks, ARK Innovation ETF skidded 3.5% and ARK Genomics ETF 1.8%. Tesla stock remains the No. 1 holding across Ark Invest's ETFs. Ark also owns some Nio and XPEV stock.
Five Best Chinese Stocks To Watch Now
AMD Stock
AMD stock plunged 8.3% to 109.36, knifing below its 50-day and 200-day moving averages in heavy volume. Barclays downgraded AMD stock on Thursday, fearing slower growth in its PC and gaming markets next year. On Monday, Goldman Sachs downgraded the chipmaker.
On March 24, AMD stock jumped above its 50-day and 200-day lines and broke a downtrend, offering an aggressive entry. But while such trades certainly can work, they involve high risks.
Nvidia Stock
Nvidia stock, meanwhile, reclaimed its 200-day on March 17, a week ahead of AMD. Shares surged on March 18 and then again on March 24, as NVDA stock cleared some short-term resistance. Those moves offered a couple of early entries.
On Thursday, shares fell 1.5% to 272.86. While Nvidia competes with AMD in gaming and data centers, it's not in PC chips.
Nvidia stock could be working on a handle, but that would be, at best, at the midpoint of a deep, undefined base. A handle would look more appealing if Nvidia rose to 300 or a little above that.
Market Rally Analysis
The stock market rally retreated for a second straight session. The Nasdaq has stopped just short of its 200-day line. The Dow Jones fell back below that level and the S&P 500 moved back toward it.
Though it's not fun to see the indexes pull back, this is still normal and healthy action so far.
Ideally, the market would move sideways or slightly lower for at least a few more days. That would help the likes of Apple, Tesla stock or even Nvidia form handles — or pull back to bullish support levels. A market pause that just starts to make investors nervous about the market or various stocks would likely be positive — assuming the upside momentum returns.
The market rally still seems broad-based, though the leading sectors shift day to day. New highs trumped new lows on the NYSE, 108 to 50. On the Nasdaq, new highs just edged lows, 77 to 74.
Time The Market With IBD's ETF Market Strategy
What To Do Now
The stock market rally looks healthy, but that doesn't mean you have to be doing much buying right now. It's probably a good time to be sitting and watching, holding on to current positions that are working, and waiting to see what the market and leading stocks do next.
When a new market rally is racing higher, the vast majority of stocks will join in. A less-heated advance and occasional pullbacks will separate the leaders and laggards.
There aren't a lot of great setups right now, with many stocks extended from breakouts or from running up from the bottom. A few names, such as Apple stock, could be working on handles, but those are still days away.
Build up those watchlists so you'll be ready if and when the market firms up and buy signals flourish.
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