Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. A flurry of economic data is scheduled for a half-day session Wednesday morning.
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Nasdaq leads market; Weatherford, Goldman Sachs, Novo Nordisk in focus
The stock market rally turned positive on Tuesday, with the S&P 500 and Nasdaq closing at record highs. Tesla (TSLA) rose on Wednesday on stronger-than-expected deliveries, extending a strong run.
Banking stocks also made a significant contribution. Goldman Sachs (GS), JPMorgan Chase (JPM), Wells Fargo (WFC), bank of america (BAC-) Citigroup (C) and Morgan Stanley (MS) are trading around buy points or early entrants. The Treasury yield curve has become less inverted as long-term yields price in a growing likelihood of Donald Trump returning to the White House.
Meanwhile, shale energy plays a role Diamondback energy (FANG) and Oil Machinery Stocks Weerford International (WFRD) and TechnipFMC (FTI) are making positive movements in the bases.
Weatherford shares are on the IBD Leaderboard watch list. Citigroup shares are on the IBD 50. Diamondback Energy was Tuesday’s IBD Stock of the Day. JPMorgan shares were Monday’s pick.
The video embedded in this article analyzes Tuesday’s market action and analyzes Weatherford. Goldman Sachs stock and New Nordisk (NVO).
Dow Jones Futures Today
Dow Jones futures lost 0.1% from fair value. S&P 500 futures fell 0.1% and Nasdaq 100 futures fell 0.1%.
The ADP Employment Report is due at 8:15 a.m. ET, followed by weekly jobless claims at 8:30 a.m. ET. The ISM Services Index is due at 10 a.m. ET. The June jobs report is scheduled for Friday morning.
The U.S. stock markets will close at 1:00 p.m. Eastern Time on July 3, in preparation for the national holiday on Thursday, July 4.
Please note that trading Dow futures and other markets overnight does not necessarily result in actual trading during the next regular trading session.
Biden’s chances plummet
Texas Rep. Lloyd Doggett became the first Democratic congressman to call on President Joe Biden to resign. Rep. Jim Clyburn, D-S.C., said he might support Vice President Kamala Harris as the nominee if Biden were to resign. Biden’s odds of becoming the Democratic nominee dropped below 50% on PredictIt, while Harris’ odds increased. Trump’s chances of retaking the White House didn’t rise much, but have increased since Thursday night’s debate.
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Rally on the stock market
The stock market rally was smooth, thanks in part to Tesla, but significant gains were also made elsewhere.
The Dow Jones Industrial Average rose 0.4% in stock trading Tuesday. The S&P 500 index climbed 0.6% to close above 5,500 for the first time. The Nasdaq Composite rose 0.8% to close above 18,000.
The small-cap Russell 2000 rose 0.2%, just below its 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) rose 0.45%, also below its 50-day return.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.85%, just shy of record highs.
In addition to banking and energy companies, many software, discount retail, shipping and medical companies are doing well. On the other hand, industrial companies are struggling, while many housing and construction companies are struggling.
The Nasdaq Composite is trading 7% above its 50-day line and is up slightly.
U.S. crude oil prices fell 0.7% to $82.81 a barrel, reversing the decline from $84 seen Tuesday morning.
The 10-year Treasury yield fell four basis points to 4.43%, after rising 19 basis points in the previous two sessions. The two-year Treasury yield fell three basis points to 4.74%, after rising less than six basis points in the previous two trading days.
The yield curve is becoming less inverted as bond traders are betting on higher budget deficits and potentially stronger economic growth if Trump returns to the White House.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) rose 0.5%. The VanEck Vectors Semiconductor ETF (SMH) rose 1%.
Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) rose 0.8% and ARK Genomics ETF (ARKG) fell 1.5% to close their worst since late October. Tesla shares are the No. 1 holding across all Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) rose 0.7% and the Global X US Infrastructure Development ETF (PAVE) rose 0.6%. The SPDR S&P Homebuilders ETF (XHB) rose slightly, 0.1%.
The Energy Select SPDR ETF (XLE) fell 0.1%, with Diamondback Energy as a member. The Health Care Select Sector SPDR Fund (XLV) fell 0.4%. The Industrial Select Sector SPDR Fund (XLI) rose 0.55%.
The Financial Select SPDR ETF (XLF) rose 1.2%, with JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, Citigroup and Wells Fargo among notable holdings.
Time The Market with IBD’s ETF Market Strategy
Tesla stocks
Tesla shares rose 10.2% to 231.26 on Tuesday. Q2 deliveries came in at 443,956, above lowered forecasts but still down from a year earlier. Energy storage jumped to a new high. TSLA shares, which broke above their 200-day line on Monday, have now expanded sharply from a 191.08 buy point set on June 26.
Energy Stocks Near Buying Points
Diamondback Energy rose 0.6% to 204.90 on Tuesday, off session highs but extending a run from its 50-day moving average. FANG stocks are moving toward a 211.96 cup-base buy point. Shares flashed an early entry late last week when they broke off their 50-day line.
Weatherford shares rose 2.3% to 124.53 on Tuesday, building the right side of a cup base with a buy point of 129.70. Shares could be working toward a handle, but it will take more time. The intraday high of 124.93 on June 28 coincides with a downtrend line for WFRD stock.
TechnipFMC shares fell 0.3% to 26.19, but are still moving higher. FTI shares have a buy point of 27.30 from a flat base, according to MarketSurge. Last week’s move above the 50-day line provided an early entry, with shares still range-bound.
Tesla extends run as it retains BEV crown; BYD sales approach 1 million
Bank stocks strong as Trump prospects boost yields
Goldman shares rose 0.4% to 465.61 on Tuesday, off a 471.48 flat-base buy point. Shares found support at their 50-day line last Thursday. Investors could use Monday’s high of 464.02 as an early entry.
JPMorgan shares rose 1.65% to 208.83, above a flat-base buy point of 205.88. JPM stock made an early entry on Friday when it crossed its 50-day line and a trend line for good.
Bank of America shares rose 2.3% to 40.93, ending weeks of tight trading as part of a four-session recovery from the 50-day line.
Wells Fargo shares edged higher 0.6% to 60.97 on Tuesday after reclaiming the 50-day line on Monday, providing an early entry. WFC shares have a buy point of 62.55 from a shallow cup base.
Citigroup climbed 2% to 64.68. Shares are working toward a buy point of 64.98 from a flat base next to a previous base. Citi shares gave a buy signal Friday after breaking above its 50-day line.
Morgan Stanley rose 0.5% to 99.65 on Tuesday after breaking short-term levels above its 50-day line. MS shares have a buy point of 103.25 from a flat base.
Note that JPMorgan, Citigroup and Wells Fargo are scheduled to report earnings on July 12, with Goldman, BofA and Morgan Stanley following a few days later.
What to do now
The stock market remains somewhat divided, with the Nasdaq extending from its 50-day line and the Russell 2000 below that key level. Some stocks have given buy signals, though a fair number of them have fallen back or worse.
Investors may want to largely hold on to their existing exposure and perhaps seize new opportunities, while taking action if other positions struggle.
Remember that the price of financial independence is eternal vigilance, so stay engaged with the market and your portfolio.
Read The Big Picture every day to stay up to date on market developments and the most important stocks and sectors.
Follow Ed Carson on Threads via @edcarson1971 and X/Twitter via @IBD_ECarson for stock market updates and more.
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