Dow Jones futures tilted higher Monday morning, along with S&P 500 futures and Nasdaq futures.
The stock market rally roared last week, with strong gains across the board as the Federal Reserve pivoted toward rate cuts in 2024. The Dow Jones hit an all-time high while the S&P 500, Nasdaq composite, small-cap Russell 2000 and S&P MidCap 400 all hit 52-week highs.
The Magnificent Seven were relative laggards overall, but don't count them out. Many have been consolidating after big runs.
Tesla staged an upside reversal, moving above early entries late last week. Nvidia regained a buy point. Microsoft, Apple, Amazon.com and Meta Platforms are all in buy zones. In fact, Google parent Alphabet is the only Magnificent Seven stock that's not in buy range now.
Of course, in this broad market rally, investors should be looking at a vast pool of leading stocks and sectors. There are still some buying opportunities, but also reasons to consider taking some partial profits.
Meanwhile, Tesla is losing subsidies in its two top European markets, including a surprise move in Germany.
Nipon Steel will acquire U.S. Steel for $14.9 billion, or $55 a share in cash. X stock, which has soared in recent months as the steel giant solicited takeover bids, spiked more than 25% early Monday to about 50.
Amazon stock, Microsoft, Nvidia, Meta are all on IBD Leaderboard. Apple stock, Amazon and Nvidia are all on SwingTrader. Microsoft stock is on IBD Long-Term Leaders. Nvidia, Microsoft, Meta stock are on the IBD 50.
The video embedded in the article discussed the big market week and analyzed Tesla stock, Monday.com and Steel Dynamics.
Steel Dynamics was Friday's IBD Stock Of The Day and MNDY stock was Thursday's selection.
Dow Jones Futures Today
Dow Jones futures climbed 0.15% vs. fair value. S&P 500 futures rose 0.2%. Nasdaq 100 futures edged higher.
The 10-year Treasury yield dipped to 3.92%.
Crude oil futures rose slightly. Oil major BPBP became the latest company to pause shipping via the Red Sea and Suez Canal due to drone attacks by Houthi rebels in Yemen. Oil and natural gas shipping stocks are rallying
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 leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally continued to advance, with the major indexes gaining ground for a seventh straight week.
The Dow Jones Industrial Average ran up 2.9% in last week's stock market trading, hitting an all-time high. The S&P 500 index jumped 2.5% and the Nasdaq composite 2.85%, both to their best levels since January 2020.
The small-cap Russell 2000 surged 5.55% and the S&P MidCap 400 leapt 4.3%, racing up to 52-week highs.
The Invesco S&P 500 Equal Weight ETF sprinted 3.9% while the First Trust Nasdaq 100 Equal Weighted Index ETF climbed 5%. That was much better than the Nasdaq 100's 3.35%, weighed down by muted gains in megacap techs.
After a quasi-market pause, all of these indexes and ETFs — even the Nasdaq 100 — had their best weekly performance since the week ended Nov. 3, as the new market rally staged follow-through days.
The Nasdaq is getting extended from the 50-day line, closing 7.6% above that level. It may be a little early in the market rally to get worried about that, but it bears watching. A lot of stocks are extended, either from traditional buy points or from running straight up from the bottom.
The CBOE Volatility Index is still around its lowest levels in nearly four years. The market fear gauge showing little or no fear is another potential yellow flag.
The 10-year Treasury yield dived 32 basis points to 3.93%, the biggest five-day slide since March. The 10-year Treasury rate fell below the 4% level.
Meanwhile the U.S. dollar tumbled, in part because the Federal Reserve was more dovish than the European Central Bank and Bank of England.
U.S. crude oil futures rose 20 cents to $71.43 a barrel Friday after hitting the lowest levels since June during the week.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF popped 2%, with Microsoft stock a major component. The VanEck Vectors Semiconductor ETF spiked 7.1% to a record high. NVDA stock is the No. 1 holding.
Reflecting more-speculative story stocks, ARK Innovation ETF gained 3.9% last week and ARK Genomics ETF soared 8.2%. Tesla stock remains a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF rallied 6% in a big upside reversal. The Global X U.S. Infrastructure Development ETF soared 5.8%. U.S. Global Jets ETF ascended 4%. SPDR S&P Homebuilders ETF spiked 7.05%. The Energy Select SPDR ETF rebounded for a 2.5% gain and the Health Care Select Sector SPDR Fund advanced 1.6%. The Industrial Select Sector SPDR Fund popped 3.7%.
The Financial Select SPDR ETF rose 3.4% and the SPDR S&P Regional Banking ETF leapt 8.1%.
EV Boom Is Losing Its Charge. What That Means For Tesla And The U.S. 'Battery Belt'
Magnificent Seven Stocks
Tesla stock rose 4% to 253.50 in an upside week after briefly undercutting the 50-day line. Shares cleared a trendline going back to July, offering an aggressive entry. TSLA stock also cleared a short-term high of 252.75, another early entry. Volume has improved in recent days and weeks.
Tesla stock has a 278.98 buy point from a five-month double-bottom base.
On the downside, the relative strength line for Tesla has stopped falling but has trended lower for the past several months.
On Saturday, Germany abruptly ended EV subsidies, essentially immediately instead of on Dec. 31. A few days earlier, Germany had scrapped plans to continue EV subsidies at a reduced level in 2024. That comes as France ended subsidies Friday on EVs made outside of Europe, including the Model 3.
Tesla Berlin will end production after Dec. 22 and will not reopen until Jan. 2, 2024.
Microsoft stock fell 0.9% to 370.73 for the week, but moved back above its 366.78 cup-base buy point on Friday, also retaking its 21-day line.
Investors could buy MSFT stock here, no longer extended from the 50-day line. On a weekly chart, MSFT stock now has a four weeks tight, with an official buy point of 384.30. But a move above Wednesday's high of 377.64 would be an attractive entry.
Apple stock climbed nearly 1% for the week to 197.57, still in range from a 192.93 cup-with-handle buy point.
A growing number of Chinese government agencies and state-owned firms have barred employees to stop bringing Apple iPhones and other foreign devices to work, Bloomberg reported right at Friday's market close, citing sources. Those bans have ramped up in the past or two, after starting with a few agencies in Beijing and Tianjin.
That suggests a growing headwind for Apple sales in China, even as the Dow tech titan looks to diversify iPhone production to India and elsewhere.
Apple stock turned slightly lower at Friday's close. Shares edged lower Monday morning.
Amazon stock rose 1.7% to 149.97, an eighth-straight weekly gain. Shares tested the 21-day line once again during the week but continue to hold a 145.86 buy point, according to MarketSmith analysis.
Meta stock edged up 0.65% to 334.92, testing the 50-day line briefly but holding a 326.20 buy point.
Google stock fell 1.8% to 132.60, dropping below the 50-day line and then hitting resistance there. GOOGL stock isn't that far from a 139.42 cup-with-handle buy point, though the RS line is at a five-month low.
Nvidia stock popped 2.9% to 488.90, rebounding from the 50-day line and reclaiming a 476.09 double-bottom buy point. Volume ran slightly higher on Wednesday and Friday and for the entire week, something that has been noticeably absent from Nvidia's gains in the past few months.
The tech giant may be working on a new flat base as well.
Intel unveiled AI chips on Thursday, after Advanced Micro Devices did so a week earlier. But Nvidia remains the AI chip leader, and will like take another step up early next year.
Time The Market With IBD's ETF Market Strategy
Market Rally Analysis
Do not chase after extended stocks. With the market rally running so powerfully since late October, the risks of a pullback are rising.
Investors could have bought stocks this past week as the major indexes cleared their recent ranges to 2023 highs and small caps skyrocketed. A few stocks are offering buying opportunities, including Tesla and Nvidia, but many leaders are stretched.
It's hard not to get exuberant after big gains in the market and your portfolio. But keep your emotions in check. The weekend can be a good time to look at your holdings dispassionately.
Depending on your investing style, you may want to take partial profits in some leaders that are extended. That could also provide cash for new buys, perhaps diversifying a portfolio into industrials, metals, financials, building products and more.
The weekend is an excellent time to run your screens and work on watchlists. A vast number of stocks and sectors are showing strong action, perhaps the most since the 2020 rally. So it can take work to get through them all.
It's a great problem to have.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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