Dow Jones futures were little changed Monday morning, along with S&P 500 futures and Nasdaq futures. Tesla stock jumped ast the EV giant's deliveries easily beat second-quarter views.
EV and battery giant BYD reported record sales on Sunday after China EV startups Li Auto, Nio and XPeng reported June deliveries on Saturday. Li Auto, Nio and XPEV stock leapt early Monday as well.
The S&P 500 index hit a 14-month high as the stock market rally roared back this past week. The Dow Jones and Nasdaq composite are back near 2023 highs, as Apple closed Friday with a $3 trillion market cap for the first time.
Nvidia, HubSpot, Marriott International, General Electric and JPMorgan Chase are all flashing buy signals.
The only concern is that the Nasdaq is already extended again, raising the risk of another market pullback in the near future.
Tesla stock, Nvidia and HubsSpot are on IBD Leaderboard. HubSpot is on the IBD 50. HubSpot and Tesla stock are on the IBD Big Cap 20.
In other news, Elon Musk imposed Twitter "rate limit" curbs starting Saturday, restricting how many tweets that users can read in a day.
The video embedded in this article discussed the big market moves and analyzed Nvidia, HubSpot and JPM stock.
Dow Jones Futures Today
Dow Jones futures lost 0.15% vs. fair value. S&P 500 futures edged lower and Nasdaq 100 futures rose about 0.1%. Tesla stock is giving a boost to the S&P 500 and especially the Nasdaq 100.
The 10-year Treasury yield rose 3 basis points to 3.85%.
Crude oil climbed slightly.
The Caixin China manufacturing index edged down 0.4 point to 50.5, still just above the break-even level and slightly topping views for 50.2. The official China manufacturing index, released late last week, signaled a third straight month of contraction, but at a slightly slower pace and fractionally above forecasts.
Hong Kong's Hang Seng rose 2.1% on Monday.
U.S. stock markets will close at 1 p.m. ET on Monday, with bond markets closing at 2 p.m. ET. Financial markets will be closed Tuesday, July4.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally extended a brief pullback on Monday, but then rebounded strongly.
The Dow Jones Industrial Average gained 2% in last week's stock market trading. The S&P 500 index climbed 2.35%. The Nasdaq composite advanced 2.2%. The small-cap Russell 2000 leapt 3.7%
In the first half of 2023, the S&P 500 has jumped 15.9%, its best six-month start since 2019. The Nasdaq surged 31.7%, its best since 1983. The Dow is up a modest 3.8% and the Russell 2000 7.4%.
AAPL stock rose 3.9% last week and 49% so far this year, giving it a $3.05 trillion market cap. It's the first time that Apple or any company has closed with a $3 trillion valuation.
The 10-year Treasury yield rose 8 basis points to 3.82%, hitting a three-month high Friday morning.
U.S. crude oil futures rose 2.1% to $70.64 a barrel last week, though it tumbled 6.65% for the quarter. Copper futures slumped 1.6% for the week, but snapped a six-day losing streak on Friday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF bolted 5.3% last week to a seven-month high while the Innovator IBD Breakout Opportunities ETF leapt 5.25%. The iShares Expanded Tech-Software Sector ETF bounced 2.7%, with HUBS stock an IGV holding. The VanEck Vectors Semiconductor ETF rallied 3.2%. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF ran up 4.75% last week and ARK Genomics ETF 4%. Tesla stock is the No. 1 holding across Ark Invest's ETFs. Cathie Wood's Ark also owns a small amount of BYD stock.
SPDR S&P Metals & Mining ETF climbed 4.4% last week, regaining its 200-day line for the first time in two months. The Global X U.S. Infrastructure Development ETF popped 4.6% to a fresh high. U.S. Global Jets ETF soared 6% to a 52-week best. SPDR S&P Homebuilders ETF stepped up 4.5% for its fifth straight weekly gain. The Energy Select SPDR ETF bounced 4.9% and the Health Care Select Sector SPDR Fund edged up 0.55%. The Industrial Select Sector SPDR Fund revved up 3.9% to just below record highs. GE stock is a key XLI component.
The Financial Select SPDR ETF rose 3%, closing above its 200-day line for the first time since early March. JPM stock is a major holding. The SPDR S&P Regional Banking ETF gained 3.2% after tumbling 8.1% in the prior week.
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Stocks In Buy Zones
Nvidia stock edged up 0.2% to 423.02 last week, but rebounded 3.6% on Friday, moving from near the 21-day line and breaking a short downtrend. That offered a place to start a position or perhaps add a few shares to an existing position. During the week, Nvidia shrugged off reports that the Biden administration will expand its chip export curbs to China, adding more Nvidia products.
HUBS stock popped 3.9% to 532.09 last week, rebounding from the 21-day line and clearing the bulk of a four-weeks-tight pattern. Intraday Friday, HubSpot briefly topped the 535.12 buy point.
MAR stock leapt 7.1% to 18.69 in a big upside week, retaking the 50-day line and clearing buy points just above 183 to hit a 52-week high. Marriott's volume was below average throughout the week.
GE stock jumped 5.85% to 109.85, rebounding from the 10-week line and clearing a three-weeks-tight buy point of 108.90, according to a weekly MarketSmith chart.
JPM stock rallied 4.75% to 145.44 last week, with all of the gains coming Thursday-Friday. That cleared a 143.37 flat-base buy point and set a 16-month high. JPMorgan and other big banks passed Fed stress tests late Wednesday, as expected. Banking giants, and especially JPMorgan, may have a long-term competitive edge over regional banks following the recent crisis.
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Tesla Deliveries Hit Record
Tesla deliveries jumped to 466,140 in the second quarter, sprinting past Q1's record 422,875 and Q4's 405,278. That easily beat Q2 estimates of around 445,000, according to FactSet.
Model 3 and Y deliveries hit 446,915 in Q2, with the Y crossover likely accounting for the bulk of that. Model S and X deliveries picked up to 19,225.
After huge price cuts worldwide in Q1, Tesla made some official price cuts and a few modest price hikes in Q2. But it offered substantial discounts on inventory, along with other incentives that could further pressure gross margins. But that won't be clear until the second-quarter earnings report on July 19.
Production hit 479,700, exceeding deliveries once again, even with Tesla curbing output below capacity. That suggests Tesla will need to keep cutting prices, especially if it wants to increase deliveries. An updated Model 3 and the Cybertruck are coming, but not quite yet.
Tesla stock leapt 6% in premarket trading.
Shares rose 2% to 261.77 last week, even after tumbling 6.1% on Monday. Shares have more than doubled in 2023 and are well extended from recent buy points.
China EV Sales
BYD sold 253,046 vehicles in June, up 88% vs. a year earlier and from 240,220 in May and 210,295 in April. Of the 251,685 passenger vehicles, BYD sold 128,196 battery electric vehicles (BEVs), up from 119,603 in May.
In the first half of 2023, BYD has sold 1,255,637 EVs. To reach its goal of at least three million in 2023, BYD will have to sell roughly 290,000 a month in the second half.
Li Auto reported June sales of 32,575, topping 30,000 for the first time. That's up 150% from a year earlier and 15.2% vs. May. Second-quarter sales were 86,533, up 201.65% vs. Q2 2022, when Covid shutdowns crippled China production and consumption. That easily exceeded a prior target of 76,000-81,000.
The hybrid SUV maker is looking for monthly deliveries of 40,000 in Q4. It'll also roll out its first all-electric model then.
Nio delivered 10,707 vehicles in June, up 74% from May's 6,155, but off 17.4% vs. a year earlier. Sales are picking up with deliveries of the revamped ES6 SUV, as well as the ET5 Touring and overhauled ES8. Nio also has made some price cuts recently.
Nio delivered 23,520 vehicles in Q2, in the lower half of its target for 23,000 to 25,000.
Xpeng delivered 8,620 vehicles in June, up 14.8% vs. May. That's the fifth straight month-to-month gain, though sales tumbled 44% vs. a year earlier. Q2 deliveries of 23,205 vehicles sank nearly one-third vs. a year earlier. But they were above XPeng's guidance range for 21,000 to 22,000 vehicles.
The EV maker has high hopes for its G6 crossover, which will begin deliveries in July. It's priced to sell, significantly cheaper than its direct rival, the Tesla Model Y.
China EV Stocks
Li Auto jumped 6% and Nio stock revved 5% early Monday, while XPeng advanced 8%.
Li Auto stock rose 5.7% to 35.10 last week, at its best levels in nearly 10 months. Nio stock surged almost 15% to 9.69, nearing its 200-day line. Xpeng stock vaulted 36% to 13.42, clearing a seven-month consolidation.
BYD stock, which trades over the counter in the U.S., was not yet trading here. But a strong Hong Kong bounce suggests at least a higher open. BYD stock fell 1.7% to 32 last week, but did bounce from its 50-day line on Friday. Shares are in range from a 31.07 buy point.
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Market Rally Analysis
The stock market rally staged an almost-textbook bullish rebound this past week. The Dow Jones, S&P 500 and Nasdaq composite all staged upside, outside weeks after testing or undercutting their 21-day moving averages. The S&P 500 hit a 14-month high while the Nasdaq reached a 14-month closing high. The Dow is just below its 2023 highs.
The Russell 2000 didn't quite have an outside week, but roared toward recent highs.
The Invesco S&P 500 Equal Weight ETF jumped 3.4%, hitting its best levels in nearly four months and outpacing the S&P 500. The First Trust Nasdaq 100 Equal Weighted Index ETF gained 2.8%, besting the Nasdaq 100's 1.9% advance.
Advance/decline lines, after weakening during the recent pullback, improved the past few days, especially on the NYSE.
Many leading stocks from a variety of groups — chips, software, travel, housing, industrial, retail/restaurants and even some financials — broke out or flashed various buy signals.
The only yellow flag is that the strong market rally is too strong.
When the Nasdaq gets 6%-7% above its 50-day line, the risks of a pullback mount. In the past couple of years, the Nasdaq has sometimes stretched to 10% or more, as it did at its mid-June top. Because the market pullback was so shallow and brief, the Nasdaq was already 7.6% above its 50-day line on Friday. The Nasdaq 100, which includes Apple stock, Nvidia, Tesla and other big-cap players, is 8.3% above the 50-day line.
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What To Do Now
The short-lived stock market pullback created a slew of buying opportunities from a variety of sectors.
Investors could have added some exposure in the past few days. You can still do so, but do so gradually, and be ready to cut losses quickly. There is already an elevated risk of another market pullback.
In Mike Webster's return to IBD Live on Friday, he discussed the importance of grading your stocks or potential buys via a variety of fundamental and technical factors. Review your portfolio to see which stocks you may want to cut loose and which you'd like to add to.
Run your screens and beef up your watchlists. Pay close attention to stocks near or in buy zones that merit an A grade.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
