Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. JPMorgan Chase (JPM) and other banks kick off earnings season this coming week.
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Banking Giants Kick Off Earnings Season Next Week
The stock market rally last week saw the S&P 500 and Nasdaq hit fresh highs, though the latter is increasingly extended. On the flip side, small caps retreated below a key level.
Still, more stocks flashed buy signals. Meta Platforms (META), Palantir Technologies (PLTR) and ASML (ASML) are in buy zones. Meanwhile, Tesla (TSLA) skyrocketed. Nvidia (NVDA) had a modest weekly gain, continuing to act well after pulling back from record highs.
Biden Interview A Must-Win
President Biden’s Friday interview with ABC News’ George Stephanopoulos could be a last chance to save his reelection effort following the disastrous June 27 debate and subsequent media stories detailing his struggles over the past several months. The interview, taped in the afternoon, will air in its entirety at 8:30 p.m. ET.
Biden, in a clip from the ABC interview, said the debate was a “bad episode” but there is “no indication of any serious condition.”
Biden, in a Friday campaign event, insisted, “I’m staying in the race.” If he bows out, Vice President Kamala Harris is heavily favored to be the Democratic nominee. The political drama could have a big market impact, with some sectors already affected.
Earnings, Powell, Inflation Ahead
JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) report earnings on Friday. All are near buy points or early entries.
Fed chief Jerome Powell will testify before Congress on Tuesday and Wednesday.
The June CPI inflation report is due on Thursday, following the soft jobs report on June 5. PPI inflation data is on Friday.
Nvidia and ASML stock are on the IBD Leaderboard. Meta stock is on SwingTrader. Nvidia stock, Palantir and Citigroup are on the IBD 50. Palantir stock is on the IBD Big Cap 20.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
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 showed positive action on the major indexes. The Dow Jones Industrial Average climbed 0.7% in last week’s stock market trading. The S&P 500 index popped 1.95%. The Nasdaq composite jumped 3.5%.
However, the small-cap Russell 2000 sank 1%, sinking below the 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) dipped 0.4% to 163.38, falling further below the 50-day line.
In contrast, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) climbed 1.6% to a record high. That reflects strength in growth stocks, especially tech growth names, beyond the megacaps. That significantly lagged the Nasdaq 100’s 3.6% spike.
The Nasdaq is now 8.3% above its 50-day line, increasingly extended. That’s how extended the tech-heavy index was on June 17, setting stage for two weeks of sideways action. The odds of a pause or pullback are elevated again. It doesn’t have to happen right away and it doesn’t have to be that large, but those risks are growing.
The 10-year Treasury yield fell seven basis points to 4.27% after spiking to 4.49% early in the week.
U.S. crude oil futures rose 2% to $83.16 a barrel for the week, up 10.1% in the last four weeks.
Copper futures jumped 6.1% for the week. Gold prices climbed 2.6% while silver leapt 7.4%.
Bitcoin plunged 10.7% to $56,458.26, but rebounded from a multimonth low of $53,700 early Friday.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.4% last week. The iShares Expanded Tech-Software Sector ETF (IGV) climbed 2.3% to just below its late 2021 peak. PLTR stock is a member. The VanEck Vectors Semiconductor ETF (SMH) popped 3.5%. Nvidia stock is the largest SMH holding by far while ASML is also a key component.
Reflecting more-speculative stocks, ARK Innovation ETF (ARKK) rallied 4.55% last week and ARK Genomics ETF (ARKG) fell 1.1%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) popped 3.25% last week, buoyed by rising metal and coal prices. The Financial Select SPDR ETF (XLF) rose 1%. JPMorgan stock, Citigroup and Wells Fargo are all big members.
But elsewhere there was weakness.
The Global X U.S. Infrastructure Development ETF (PAVE) declined 1.1%. U.S. Global Jets ETF (JETS) descended 2.6%. SPDR S&P Homebuilders ETF (XHB) skidded 3.1%. The Energy Select SPDR ETF (XLE) retreated 1.15% and the Health Care Select Sector SPDR Fund (XLV) lost 0.9%. The Industrial Select Sector SPDR Fund (XLI) dipped 0.5%.
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Tesla Stock
Tesla stock skyrocketed 27.1% to 251.52 for the week, blasting above the 200-day line and much more. Q2 deliveries fell vs. a year earlier but beat lowered expectations.
Shares are now greatly extended from the 191.08 handle buy point. TSLA stock is right at a long-term trendline going back to its late 2021 all-time high. Ideally, Tesla would pause for a while.
Tesla earnings are due on July 17, with a robotaxi event slated for Aug. 8.
Nvidia
Nvidia stock rose 1.85% to 125.83 for the week, bouncing off the 21-day line. An aggressive investor could have used Wednesday’s action as a place to add a few more shares.
Nvidia stock may benefit from a longer break before its next move. Nvidia earnings are not expected until mid-August, but Taiwan Semiconductor Manufacturing (TSM), a key supplier for Nvidia and other companies, will be reporting June sales and Q2 earnings soon.
Meta stock surged 7.1% to 539.91, surpassing key buy points and with earnings scheduled for July 31. Palantir stock also saw a significant increase, rising 7.5% to 27.23 and clearing a buy point, with earnings expected in early August. ASML stock climbed 5.1% to 1,074.48, bouncing back from the 21-day line and crossing a buy point, with earnings set for July 17.
While the Nasdaq is overextended and other indices are losing sight of their 50-day lines, most leading stocks are performing well. New buying opportunities continue to emerge, although caution is advised in case of market pullbacks or rotations. Despite some cautionary signs, the overall bullish trend remains strong, suggesting investors maintain significant exposure to the market.
With earnings season approaching, it’s important to pay attention to upcoming reports from companies like JPMorgan, Citigroup, Wells Fargo, and Delta Air Lines. Regularly reviewing watchlists and portfolios is recommended to stay informed and prepared for market developments.
For more stock market updates and insights, follow Ed Carson on Threads and Twitter. Additionally, check out IBD’s tools like MarketSurge and SwingTrader for stock research and analysis. Don’t miss out on the latest growth stocks and premium features available on IBD Digital.
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