Dow Jones futures fell slightly Monday morning, along with S&P 500 futures and Nasdaq futures, as the 10-year Treasury yield again hit 1.6% and China's economy slowed. A Bitcoin futures ETF is set to launch with key earnings on tap this week.
The stock market rally rose powerfully last week, moving back into a confirmed rally. That's a green light to investors to ramp up exposure again, but watch your speed and don't get distracted.
Dow Jones giants Microsoft and Goldman Sachs offer early entries now. So does Tesla rival Xpeng, with other Chinese EV makers rallying and Tesla stock continuing its steady ascent. Expedia is just below a breakout while Old Dominion Freight Line is flirting with a traditional buy point.
Key earnings this week include Tesla, Netflix, ASML, Chipotle Mexican Grill, Nucor, CSX, Snap, as well as some oil services firms, airlines and top-rated banks.
AppleAAPL is expected to unveil a long-awaited updated MacBook pro laptop with in-house chips at a Monday product event.
Bitcoin ETF Launching
Meanwhile, Bitcoin surged to $62,858 on Friday, a six-month high following a huge run over the past several weeks. The Bitcoin price was below $61,000 after pausing over the weekend.
ProShares indicated in a late Friday filing that its Bitcoin futures ETF will begin trading this week. It'll begin trading on Tuesday, the New York Times reported.
The Securities and Exchange Commission hasn't formally approved the ProShares Bitcoin Strategy ETF. The SEC may never officially do so. But BITO can begin trading if the SEC doesn't object. It'll be thirst of what will likely be several Bitcoin futures ETFs, bringing the cryptocurrency even closer to ordinary investors. Grayscale reportedly is close to filing an application for spot price Bitcoin ETF.
Earlier this month, SEC Chairman Gary Gensler made it clear he was not considering a China-like ban on Bitcoin and other cryptocurrencies.
In addition to Bitcoin, Ethereum and other cryptocurrencies have rebounded. So have Bitcoin-related stocks, such as Marathon Digital Holdings, Coinbase and Grayscale Bitcoin Trust. Tesla still has Bitcoin holdings as well.
MARA stock surged 24% to 48.89 last week after a 19% spike in the prior week. On Friday, Marathon sprinted past its early September short-term high of 44.97. GBTC stock leapt 12% last week. COIN stock leapt 13%, breaking a trend line Friday after rebounding from its 50-day line on the day before.
Microsoft and Tesla stock are on IBD Leaderboard. Goldman stock is on SwingTrader. MSFT stock is on IBD Long-Term Leaders. Expedia was Friday's IBD Stock Of The Day.
The video embedded in this article reviewed the weekly market action and analyzed Goldman, Expedia and ODFL stock.
Dow Jones Futures Today
Dow Jones futures fell 0.4% vs. fair value. S&P 500 futures lost 0.3% and Nasdaq 100 futures declined 0.2%.
The 10-year Treasury yield climbed 1 basis points to 1.59%, below the premarket high of 1.62%. U.S. crude oil prices advanced more than 1% after hitting multiyear highs last week. Natural gas futures fell modestly. Copper futures edged higher after big gains last week
China's economy expanded 4.9% in the third quarter vs. a year earlier. Economists expected GDP growth of 5.2% after Q2's 7.9%. September industrial production grew 3.1% year over year vs. forecasts for 4.5% and August's 5.3%. On the positive side, September retail sales picked up to 4.4%, up from 2.5% in August and views for 3.3%.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The stock market rally looked sickly to start the week but roared higher.
The Dow Jones Industrial Average rose 1.6% in last week's stock market trading. The S&P 500 index climbed 1.8%. The Nasdaq composite jumped 2.2%. The small-cap Russell 2000 gained 1.6%, despite slipping on Friday.
The 10-year Treasury yield fell three basis points last week to 1.58%, but slashed losses with a five-basis-point gain Friday.
Among the best ETFs, the Innovator IBD 50 ETF rebounded 3.8% last week, while the Innovator IBD Breakout Opportunities ETF climbed 2%. The iShares Expanded Tech-Software Sector ETF shot up 4.85%, with Microsoft stock a top holding. The VanEck Vectors Semiconductor ETF rose 3.1%.
SPDR S&P Metals & Mining ETF jumped 5.5% last week and Global X U.S. Infrastructure Development ETF advanced 2.5%. U.S. Global Jets ETF slid 1.7%. SPDR S&P Homebuilders ETF rose 3%. The Energy Select SPDR ETF climbed 1.3%, its fifth straight weekly advance. The Financial Select SPDR ETF climbed 1.2% after retreating early in the week. GS stock is a notable XLF holding.
Reflecting more-speculative story stocks, ARK Innovation ETF popped 4.7% and ARK Genomics ETF 4.3%, both rebounding from downtrends Tesla stock remains the top holding across ARK Invest's ETFs. Several ARK ETFs also have invested in COIN stock.
Three China EV Stocks Flashing Buy Signals
Stocks Near Buy Points
Expedia stock rose 1.1% last week to 171.99, with all of that and more coming on Friday's 1.8% advance. The travel site is closing in on a 175.47 buy point on a cup-with-handle base. Over the past several weeks, Covid cases have tumbled in the U.S. and around the world, with restrictions also coming down.
Booking.com is already in a buy zone, along with many other travel plays.
Goldman stock rallied 3.4% to 406.07 last week. On Friday, shares popped 3.8%, moving above their 50-day line and breaking a trend line in heavy volume. That offered an early entry for GS stock. The official buy buy point is 420.86 from a flat base. Goldman easily beat EPS and revenue news early Friday.
ODFL stock jumped 5.2% to 302.51 last week. Intraday Friday it briefly topped a 304.32 flat-base buy point, according to MarketSmith analysis. It's already actionable from a 50-day line bounce. Old Dominion rallied Friday as fellow trucking firm J.B. Hunt surged on accelerating earnings growth. A few other trucking firms also did well, with Saia clearing a buy point. But ODFL stock's relative strength line hit a new high Friday on a weekly chart, giving a blue dot mark in MarketSmith.
Old Dominion earnings and sales growth have accelerated for four straight quarters.
Microsoft stock climbed 3.2% to 304.21 last week, reclaiming its 50-day line and offering an early entry. MSFT stock is closing in on a 305.94 flat-base buy point, with its RS line just below highs.
Xpeng stock surged nearly 14% last week to 42.80, breaking a downtrend in its bottoming base after reclaiming its 50-day line earlier in the week. XPEV stock has a 48.08 traditional buy point.
It was a good day and week for automakers. Among Xpeng's peers, Li Auto popped 7.55% last week, also breaking above its 50-day line and a trend line. BYD soared 10%, reclaiming its 50-day line and flirting with an actual breakout. It's also flashing an early entry. Nio gained 5.3%, coming up to its 50-day line.
As for Tesla stock, the EV giant jumped 7.3%, its eighth straight weekly gain. Strong China sales and an FSD Beta rollout fueled TSLA stock, with Tesla earnings due this coming week.
Market Rally Analysis
The major indexes started the week by continuing to close at session lows. But Wednesday had decent finish, while Thursday's follow-through day confirmed the new uptrend. The Dow Jones and S&P 500, which just closed above their 50-day lines Thursday, extended those gains Friday. Rising energy and metals prices and rebounding Treasury yields helped.
The Nasdaq nudged above its 50-day line on Friday, though it's just below its 10-week line. The Nasdaq 100 is just below both. Bond yields are an issue for growth names, but they generally did well overall.
Meanwhile, there were so many actionable stocks last week, even when the market was slumping.
That includes a lot of growth names. Some are definitely extended now, but many others are not.
This new market rally is showing some broad-based strength. Financials held up reasonably well as Treasury yields than GS stock and others had a strong end to the week. Trucking firms like ODFL stock are flashing buy signals, along with a variety of travel-related plays. EV and other automakers such as XPEV stock shifting into a higher gear. Solar stocks are coming back. Some retail names are near buy zones. Mining and metals stocks might be turning around.
Don't forget about oil and gas stocks, which have continued to climb.
Keep in mind that if a confirmed market rally is going to fail, it usually does fairly quickly. Can the Nasdaq decisively clear its 50-day line and move toward record highs?
Why This IBD Tool Simplifies The Search For Top Stocks
What To Do Now
We're in a confirmed stock market rally. If you were hesitant to make new buys during the correction, that obstacle is gone. This is a time to take advantage of a new uptrend. How much exposure depends on whether you can find stocks to buy. There do seem to be a number of actionable stocks from a wide range of sectors.
Have a diverse portfolio of leaders can help you weather various sector shifts. After running strong recently, it's possible that growth stocks will pause, especially if Treasury yield go on another tear. If you have some stocks that are extended, you could take some partial profits to lock in gains and free up capital.
At the very least, cast a wide net as you run your screens to build up your watch lists.
Earnings season will continue to ramp up, with dozens of notable stocks reporting next week and even more the following week. Earnings could be a tailwind or headwind to the market rally, various sectors and of course individual stocks. Pay close attention to when your holdings report, as well as your stocks' key rivals, customers or suppliers. You may decide to take partial profits or cash out ahead of earnings, or let it ride if you have sufficient capital.
Continue to remain flexible and stay alert. Investors have to be ready and willing to shift from defense to offense and back again as market conditions warrant.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
