Dow Jones futures rose slightly late Wednesday, along with S&P 500 futures and Nasdaq futures. The stock market rally was mixed with the Dow leading and Nasdaq edging lower while Apple (AAPL) flirted with a buy point.
Micron Technology (MU) earnings topped views after the close, though MU stock fell slightly overnight. The Micron earnings report has implications for memory-exposed chip-gear makers such as Applied Materials (AMAT) and Lam Research (LRCX). AMAT stock closed just above a buy point.
Meanwhile, investors will be turning their eyes toward electric-vehicle makers Tesla (TSLA), Nio (NIO), Xpeng (XPEV) and Li Auto (LI). Tesla is expected to release second-quarter production and delivery figures by the end of the week. Nio should release June sales figures this week as well, with recent history suggesting early Thursday. Xpeng and Li Auto are likely to release June deliveries data in the next few days as well.
Apple stock rose 0.5% to 136.96 after reaching 137.41 intraday. That briefly cleared a 137.17 cup-base buy point, according to MarketSmith analysis. That’s not exactly busting through resistance, though shares are up 2.9% so far this week. But AAPL stock has risen in anemic volume each day.
The relative strength line for Apple stock is trending higher the past few weeks, almost to consolidation highs. But it’s well below all-time highs, as AAPL stock has lagged the S&P 500 index for the past 10 months.
Several IPOs debuted Wednesday, including China ride-hailing giant Didi Global (DIDI) and cybersecurity play SentinelOne (S). Didi stock rose 1% to 14.10 from its 14 IPO price, but that’s after hitting 18.01 intraday. SentinelOne stock popped 21% to 42.50 after pricing at an above-range 35.
Meanwhile, OPEC meets Thursday with crude oil prices trading at three-year highs. The group is expected to discuss a modest quota hike for August.
Dow Jones Futures Today
Dow Jones futures rose 0.25% vs. fair value. S&P 500 futures climbed 0.2%. Nasdaq 100 futures advanced 0.1%.
Coronavirus cases worldwide reached 182.94 million. Covid-19 deaths topped 3.96 million.
Coronavirus cases in the U.S. have hit 34.54 million, with deaths above 620,000.
Stock Market Rally Wednesday
The stock market rally had a generally positive session, with the Nasdaq pausing at record highs.
The Dow Jones Industrial Average climbed 0.6% in Wednesday’s stock market trading. The S&P 500 index edged up 0.1%, setting yet another record high. The Nasdaq composite dipped 0.2%. The Russell 2000 was little changed.
While some hot tech and growth stocks took a break — though by no means all — much of the market had a solid session.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) slipped 0.5%, while the Innovator IBD Breakout Opportunities ETF (BOUT) lost 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 1.3%. The VanEck Vectors Semiconductor ETF (SMH) edged up 0.1%. Micron, LRCX and AMAT stock are all SMH components.
SPDR S&P Metals & Mining ETF (XME) rose 1.75% and Global X U.S. Infrastructure Development ETF (PAVE) advanced 0.7%. U.S. Global Jets ETF (JETS) climbed 0.5%. SPDR S&P Homebuilders ETF (XHB) closed just above break-even. The Energy Select SPDR ETF (XLE) rose 1.2% and the Financial Select SPDR ETF (XLF) 0.4%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) dipped 0.1% and ARK Genomics ETF (ARKG) slid 0.6%. Tesla is the No. 1 holding across ARK Invest’s ETFs. Both ARKK and ARKG are above their April short-term highs, while TSLA stock remains considerably below that area.
Micron earnings leapt 129% to $1.88 a share in the fiscal third quarter, with sales up 36% to $7.42 billion. Analysts expected Micron earnings of $1.72 a share on $7.24 billion in sales.
The memory-chip giant guided higher for the current Q4. It’s also selling a chip plant to Texas Instruments (TXN) for $1.5 billion including $900 million cash and some tools.
Micron stock fell 2.5% in extended trade. MU stock rose 2.5% to 84.98 on Wednesday, moving further above its 50-day line. Micron has an official buy point of 97.06, though investors might use 85.85 as an early entry.
Micron earnings and targets are important for chip-equipment makers with heavy exposure to the memory industry. But AMAT stock and LRCX were relatively quiet overnight.
On Wednesday, Applied Materials stock rose 0.3% to 142.40, nudging past a 142.22 handle buy point. LRCX stock dipped 0.2% on Wednesday to 650.70, with an entry at 669.10 or 673.90.
Tesla reports quarterly delivery and production figures within three business days after the end of the quarter. Technically, Tesla could release Q2 figures over the weekend or even on Monday and meet that standard, but Thursday or Friday is highly likely.
Analysts expect Tesla deliveries of 196,700 vehicles. That would be a 6.4% quarterly gain. That would be more than double the year-ago figure of 90,900, when the Fremont, California, plant was closed for much of the quarter. FactSet estimates Tesla will deliver 193,500 Model 3/Y cars and 3,200 Model S/X vehicles.
China demand late in the quarter is a wild card, given complaints about alleged Tesla safety and customer service issues. But it’s unclear if that PR headache is having a major impact on Tesla sales, or whether any such impact would show up in June deliveries.
Tesla stock dipped 0.2% to 679.70 on Wednesday, reversing from modest intraday gains. Shares cleared a downward-sloping trend line late last week, shortly after retaking the 50-day line. That offered an aggressive entry point for Tesla stock. Investors also could use 780.89, just above the April 14 short-term high, as another early entry.
Nio EV delivery figures recently have been released on the first day of the following month, so June sales are likely on Thursday.
Nio has had to halt production at times due to chip shortages, limiting its delivery upside. Nio has targeted 21,000-22,000 EV deliveries in Q2. It needs to deliver 8,187 electric SUVs in June to meet the high end of that goal.
Nio stock jumped 5.7% to 53.20 on Wednesday, already up 18% so far this week. On Monday, Nio cleared a short pause that offered an extremely aggressive entry. But it’s clearly extended from that level.
On July 9, Nio will hold a Nio Power Day event. The event, focused on EV batteries and charging, was announced Monday.
Xpeng, Li Auto Deliveries
Xpeng and Li Auto also will report deliveries in the next few days.
On Wednesday, U.S.-listed Xpeng said that it raised $1.8 billion in a Hong Kong IPO, becoming a dual-listed stock. It’ll start trading in Hong Kong July 7.
Xpeng stock edged up 0.2% to 44.42. Aggressive investors could view 45.85 as an entry from a short pause, much like Nio stock had recently.
Li Auto stock gained 2% to 34.94. Shares have more than doubled from their May 11 low, but it has no plausible buy point in sight.
Nio, Li Auto and XPEV stock have rebounded faster than Tesla in recent weeks, but they also sold off much harder in the months before that.
When it comes to Nio, Li, XPEV and even Tesla stock, make sure to start or add to positions at proper buy points. While they’ve had huge gains over the past year, there have also been major losses along the way.
Market Rally Analysis
The stock market rally had another quiet session. But that can be constructive. That can keep the Nasdaq from getting extended from the 50-day line. Some hot stocks may form handles, including several software names that have run up from early entries to or near record highs. And it lets rising stocks’ RS lines quickly improve.
As long as the Nasdaq and S&P 500 hold above their recent consolidations, the stock market rally should be fine. Ideally, the Russell 2000 and Dow Jones will break out to new highs as well, but there’s no rush.
Continue to watch a variety of groups. While tech and energy sectors have blazed a trail in recent weeks, mining, metal and materials firms are setting up, along with some financial stocks. Fertilizer stocks could be rebounding as corn futures pop. A variety of staffing firms are showing strong action.
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