Dow Jones futures are set to open Sunday night, along with S&P 500 futures and Nasdaq futures, amid mounting 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” every day from 10 a.m. to 4 p.m., White House aides told Axios, with miscues and fatigue more common at other times of the day.
Biden’s chances are declining
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%, down from 36% on Friday and 48% on Thursday before the debate. Donald Trump’s odds are at 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 debate win gave the S&P 500 a boost. Then this happened.
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 does not necessarily translate into actual trading during the next regular trading session.
Stock Market Highlights
The stock market rally last week sent mixed signals. However, the major indices are showing tight action each week, while the Nasdaq power trend remains intact.
The Dow Jones Industrial Average fell slightly 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 Composite rose slightly 0.2% after both returned from record highs Friday morning.
The small-cap Russell 2000 rose 1.3%, reclaiming its 50-day mark.
Looking at the weekly chart, we see that the Nasdaq has not shown any real weakness. The index has risen over the past 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.
Meta-platforms (META), Amazon.nl (AMZN) and Tesla (TSLA) broke out throughout the week, although they encountered resistance on Friday. Nvidia (NVDA) withdrew but found a foothold.
Software did well last week, with AppLovin (APP), monday.com (MNDY) and Service now (NOW) flashing buy signals.
Chinese EV sales
Investors will receive June and Q2 sales from Chinese EV makers Nio (NIO), Li Auto (LI), XPeng (XPEV) and samphire (ZK) Monday morning and maybe EV and battery giant DOORD (BYDDF).
Tesla and Rivian (RIVN) is expected to report figures early Tuesday. Most automakers will also report U.S. sales for the second quarter on Tuesday.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) fell 0.4% last week.
The iShares Expanded Tech-Software Sector ETF (IGV) rose 2.4%, its fourth straight strong weekly gain. ServiceNow shares and AppLovin are IGV holdings. The VanEck Vectors Semiconductor ETF (SMH) fell 1.6% but recovered slightly from its lows. Nvidia shares are the dominant SMH holding.
Reflecting more speculative story stocks, the ARK Innovation ETF (ARKK) rose 1.4% last week and the ARK Genomics ETF (ARKG) fell 3.5%, back to April lows. Tesla shares are the No. 1 performer 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 a 6.7% drop on Monday to cap a three-day sell-off, the AI chip leader has recovered to stay above its 21-day moving average. NVDA stock could use an extended break, forge a new base and catch up to the 50-day line.
Meta shares rose 1.9% to 504.22. Shares passed a 514.01 cup-with-handle buy point on Thursday, but fell nearly 3% on Friday. However, it is still around some early entries within the handle.
Amazon shares rose 2.2% to 193.25, past a flat-base buy point of 191.70. Shares fell 2.3% on Friday.
Tesla shares rose 8.1% to 197.88, breaking out from a 191.08 handle buy point. The buy range extends to 200.63. TSLA shares 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 shares rose 5.9% for the week to 83.22, breaking a tight trendline and a short-term high of 82.66 on Thursday, providing an early entry. The official flat-base buy point is 88.50, according to MarketSurge.
Shares of Monday.com rose 7% last week to 240.76, a recovery from the 50-day line within a short-term, mini-double-bottom consolidation next to another base. The official buy point is 249. However, shares of MNDY crossed a trend line on Thursday. On Friday, the software maker tested a short-term high of 239.54, roughly in line with the previous base buy point of 239.22.
ServiceNow shares rose just over 5% to 787.19, breaking a trendline. Shares are up 23% from the intraday low of 637.99 on May 31. The official buy point is 815.32. Ideally, the NOW share would provide a handle.
Meanwhile, a number of software stocks are rising from the bottom and trading within the base, while a few leaders are expanding.
Investors could use IGV (which has a chart very similar to ServiceNow’s) or other software ETFs to capitalize on this sector move.
Market Rally Analysis
Active investors can capitalize on the current stock market rally in many ways.
A very active trader may have made numerous trades over the past few weeks, catching some winners and also selling some stocks that quickly disappeared during the mini-rotations. Other traders may have chosen to take little or no action, depending on how their existing positions performed.
The key is to find the investing style and rules that work for you.
Watch the market and sector action. Many software names should be on your watchlists. And while financials and industrials have retreated, many stocks in those areas are almost usable.
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 up to date on market developments and the most important stocks and sectors.
Nvidia stock, Amazon and Meta are on IBD Leaderboard. Amazon and Meta stock are on SwingTrader. Nvidia, Monday.com and ServiceNow stock are on the IBD 50. 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 at @IBD_ECarson for stock market updates and more.
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