Finance
Dow Jones Futures: President Biden Reportedly Considering Next Steps for the Campaign; Tesla and Amazon in buying zones
Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures, amid growing speculation that President Joe Biden could drop out of the race.
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Nasdaq returns after 18,000 points; Uber, JPMorgan, Hilton in the picture
Biden will discuss the future of the campaign
President Biden will discuss the future of his re-election campaign with family at Camp David on Sunday, NBC News reported on Saturday, citing multiple sources. This comes after Thursday evening’s presidential debate against Donald Trump, in which Biden delivered a disastrous performance. That raised concerns about his fitness for office, especially as he seeks a second four-year term. Top Democratic officials have publicly expressed continued support, but many are privately concerned.
Biden is “reliably engaged” from 10 a.m. to 4 p.m. every day, White House aides told Axios, with miscues and fatigue more common at other times of the day.
Biden’s chances are falling
The odds of Biden getting the Democratic nomination have fallen to just 60%, down from 72% on Friday, down from 85% before the debate. The odds of Vice President Kamala Harris receiving the nomination have risen to 24% from 13% on Friday. California Governor Gavin Newsom is at 14%, down slightly from 17% on Friday.
Biden’s chances of winning the presidency have now fallen to 25% versus 36% on Friday and 48% on Thursday before the debate. The chances for Donald Trump are 59%, little changed from Friday and 53% before the debate. Still, the odds of a GOP sweep have increased.
Increasing chances of Donald Trump regaining the presidency with a Republican-controlled Congress hit solar and hospital stocks on Friday.
Trump’s victory in the debate boosted the S&P 500. Then this happened.
Dow Jones futures today
Dow Jones futures open at 6:00 PM ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.
Stock Market Highlights
The stock market rally last week sent mixed signals. Still, the major indexes are showing weekly tight action, while the Nasdaq power trend is intact.
The Dow Jones Industrial Average fell 0.1% in last week’s stock market trading after a solid start to the week. The S&P 500 index fell 0.1% and the Nasdaq index rose 0.2% after both returned from record highs Friday morning.
The small-cap Russell 2000 rose 1.3%, regaining its 50-day mark.
Looking at the weekly chart, the Nasdaq has shown no real weakness; it rose the last four weeks and nine of the last ten weeks.
The Nasdaq is 5.9% above its 50-day line, slightly extended even with sideways action in recent weeks. A longer pause or mild pullback would likely be constructive, allowing the stock to develop and creating more room for the next move.
Metaplatforms (META), Amazon.com (AMZN) And Tesla (TSLA) broke out over the course of the week, although they encountered resistance on Friday. Nvidia (NVDA) retreated but found his base.
Software did well last week, with AppLovin (APP), monday.com (MNDY) And Service now (NOW) flashing buy signals.
Chinese EV sales
Investors will get June and Q2 sales from Chinese EV makers Nio (NIO), Li Auto (LI), XPeng (XPEV) And Zeekr (ZK) early Monday and perhaps EV and battery giant BYD (BYDDF).
Tesla and Rivaans (RIVN) should release figures early Tuesday. Most automakers will also announce second-quarter U.S. sales on Tuesday.
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ETFs
Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) fell 0.4% last week.
The iShares Expanded Tech-Software Sector ETF (IGV) rose 2.4%, the fourth consecutive strong weekly increase. ServiceNow stock and AppLovin are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) fell 1.6%, but recovered somewhat from the low. Nvidia stock is the dominant SMH holding.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 1.4% last week and ARK Genomics ETF (ARKG) fell 3.5%, back to April lows. Tesla stock is the #1 stock in Ark Invest’s ETFs.
Time the market with IBD’s ETF market strategy
Megacap Stocks
Nvidia shares fell 2.4% this week to 123.54. But after falling 6.7% on Monday, capping a three-day sell-off, the AI chip leader recovered to remain above its 21-day moving average. NVDA stock could use an extended pause, forge a new base and catch up to the 50-day line.
Meta shares rose 1.9% to 504.22. Shares hit a buy point of 514.01 cup-with-handle on Thursday, but fell nearly 3% on Friday. However, they are still some early entries within the handle.
Amazon shares rose 2.2% to 193.25, passing a flat-base buy point of 191.70. Shares fell 2.3% on Friday.
Tesla stock rose 8.1% to 197.88, breaking out from a buy point of 191.08. The buy range extends to 200.63. TSLA stock hit resistance at the 40-week line on Friday but closed higher.
Tesla’s big weekly gain came as several analysts cut second-quarter delivery expectations ahead of the EV giant’s press release on Tuesday.
Amazon reached this milestone in the Andy Jassy era. What’s next?
Software stocks in buy zones
AppLovin stock rose 5.9% to 83.22 this week, breaking a tight trendline and short-term high of 82.66 on Thursday, offering an early entry. The official buy point with a flat base is said to be 88.50 Market wave.
Shares of Monday.com rose 7% to 240.76 last week, recovering from the 50-day line within a brief mini-double bottom consolidation alongside another base. The official buy point is 249. However, MNDY stock crossed a trend line on Thursday. On Friday, the software maker tested a short-term high of 239.54, which roughly coincides with the previous buy point of 239.22.
ServiceNow shares rose just over 5% to 787.19, breaking a trend line. Shares are up 23% from their May 31 low of 637.99. The official buy point is 815.32. Ideally, NOW stock would forge a handle.
Meanwhile, a number of software stocks are rising from the bottom, trading within bases, while a few leaders are expanding.
Investors could use IGV (which has a chart much like ServiceNow’s) or other software ETFs to play this sector move.
Analysis of the market rally
Active investors can respond to the current stock market rally in many ways.
A very active trader may have made numerous trades over the past few weeks, hitting some winners while exiting some stocks that quickly faded during the mini-rotations. Other traders may have chosen to take little or no action depending on how their existing positions were behaving.
The key is to find the investment style and rules that work for you.
Watch the market and sector action. There should be a lot of software names on your watchlists. And while the financial and industrial sectors have pulled back, many stocks in those areas are close to actionable.
The presidential race is a huge wildcard, with Biden’s debate performance and related fallout creating much more uncertainty months before Election Day.
Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.
Nvidia stock, Amazon and Meta are on IBD rankings. Amazon and Meta shares are listed on SwingTrader. Nvidia, Monday.com and ServiceNow stocks are on the list IBD50. AppLovin was the IBD stock of the day on Friday, while Amazon stock was the pick on Thursday.
Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.
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