Dow Jones futures rose Monday morning, along with S&P 500 futures and Nasdaq futures. Tesla moved on news Monday, headlining a big earnings week.
The S&P 500 and Dow Jones hit all-time highs Friday with the Nasdaq at a two-year best. Big techs led the market rally last week week. Small caps struggled, but they did rebound from support on Friday.
Friday excepted, market breadth has been lackluster in 2024. But market leadership is robust, with a significant number of stocks flashing buy signals in the past few days with many others setting up.
Apple offered an early entry Friday, though with caveats. Cloudflare flashed a buy signal with DraftKings on the cusp.
Investors can add exposure gradually, but earnings season looms large.
In addition to Tesla, ServiceNow, Netflix, Intel, ASML, Lam Research, KLA, D.R. Horton, Paccar and United Rentals are on tap, just to name a few.
Tesla stock, despite its slump, is still closely watched by investors. On Sunday, the EV giant released the latest version of its Full Self Driving software, while a big TSLA bull cut his price target Monday.
ServiceNow kicks off software earnings, while Intel, ASML, LRCX and KLAC offer more insight into the booming chip sector. D.R. Horton, Paccar and URI stock show strength beyond techs.
NOW stock is on IBD Leaderboard, with Booking Holdings stock on the Leaderboard watchlist. KLA stock is on IBD Long-Term Leaders. DraftKings, ServiceNow, United Rentals and NET stock are on the IBD 50. ServiceNow, United Rentals and ASML stock are on the IBD Big Cap 20.
Cloudflare stock was Friday's IBD Stock Of The Day. DKNG stock was Thursday's selection.
The video embedded in this article discusses the weekly market action and analyzed Cloudflare stock, DraftKings and Super Micro Computer.
Dow Jones Futures Today
Dow Jones futures advanced 0.2% vs. fair value, with Boeing extending 2024 losses as the FAA recommended expanded inspections. S&P 500 futures rose 0.4% and Nasdaq 100 futures climbed 0.65%.
The 10-year Treasury yield fell several basis points to 4.09%.
Crude oil edged higher.
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 retreated to start the week, but revved higher on Thursday and Friday.
The Dow Jones Industrial Average rose 0.7% in last week's stock market trading. The S&P 500 index gained 1.2%. The Nasdaq composite popped 2.3%.
The S&P 500 just eclipsed its January 2022 all-time peak on Friday. The Dow Jones rebounded to an all-time closing high. The Nasdaq set a two-year best, though it's still some distance from its record highs. The Nasdaq 100 hit a record high, soaring 2.9% last week.
The Russell 2000 edged down 0.3%. The small-cap index did rebound significantly from its 50-day line.
The Invesco S&P 500 Equal Weight ETF dipped 0.15% for the week but bounced considerably from its 10-week line and reclaimed the 21-day line on Friday.
The First Trust Nasdaq 100 Equal Weighted Index ETF lagged the Nasdaq 100, but jumped 1.8% to a two-year high. That reflects strong market leadership, especially in the tech growth space.
The 10-year Treasury yield jumped 20 basis points to 4.15%. The two-year Treasury yield, more closely tied to Fed policy, soared 27 basis points to 4.41%.
Economic data was generally strong last week, while Fed policymakers and European Central Bank officials signaled a go-slow approach on rate cuts. Markets now see less than a 50-50 chance that Fed rate cuts will start in March.
The bounce in Treasury yields and ebbing rate-cut hopes haven't had much impact yet on the market rally, but they bear watching.
U.S. crude oil futures rose 1% to $73.41 a barrel last week.
The Fed Is Sending A New Message On Rate Cuts
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF popped 2.4%, with NOW stock a significant component. The VanEck Vectors Semiconductor ETF surged 8.2%, with ASML stock, KLA, LRCX and Intel all big holdings.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 2.3% last week and ARK Genomics ETF tumbled 5.8%. Tesla stock remains a major holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF slipped 0.9% last week. The Global X U.S. Infrastructure Development ETF added 0.5%, with URI stock a big component. U.S. Global Jets ETF dipped 0.3%. SPDR S&P Homebuilders ETF reversed 1.3% higher, with DHI stock a major holding. The Energy Select SPDR ETF slumped 3% to a six-month low. The Health Care Select Sector SPDR Fund fell 0.75% as health insurers tumbled, snapping a nine-week win streak. The Industrial Select Sector SPDR Fund climbed 0.3%, with United Rentals and PCAR stock both holdings in that fund.
The Financial Select SPDR ETF climbed 0.9%.
Cathie Wood's ARKK ETF Is Taking On Water. The Reason Is Simple.
Stocks To Watch
Apple stock jumped 3% to 191.56, rebounding from the 200-day line and clearly retaking the 50-day, offering an aggressive entry. However, the relative strength line has lagged, hitting a 10-month low recently.
Apple earnings have been so-so, with China iPhone demand a concern. Fiscal Q1 2024 earnings are due Feb. 1.
Cloudflare stock rose 2.5% to 81.36 last week after finding support at the 50-day line and a prior 76.07 cup-base buy point. On Friday, NET stock reclaimed the 21-day line and broke a short downtrend, offering an early entry. Cloudflare now has a flat base, base-on-base pattern with an 86.91 buy point.
DKNG stock jumped 14.2% to 37.62, surging above the 50-day line. DraftKings stock is hitting resistance at a downtrend line. A move above Friday's high of 38.15 would offer an early entry. The official consolidation buy point is 39.35.
Tesla, Netflix, GE Earnings: Investing Action Plan
Tesla Earnings
Tesla earnings are due Wednesday night. Analysts expect EPS to plunge 39% vs. a year earlier to 73 cents a share, with revenue up more than 5% to $25.62 billion.
The focus will be on the 2024 outlook for gross margins and deliveries, especially with price cuts and incentives continuing early in 2024.
Tesla began rolling out FSD Beta Version 12 on Sunday night to some paying customers after weeks of internal testing.
Morgan Stanley's Adam Jonas cut his TSLA price target on Monday to 345 from 380, saying "Global EV momentum is stalling." He values Tesla's EV business at just $75 a share.
Shares edged higher early Monday.
Tesla stock retreated 3.1% last week to 212.19, its fifth straight weekly decline. The RS line has tumbled to an eight-month low, reflecting TSLA stock's deterioration vs. the S&P 500. Bottom line, Tesla stock is in the body shop for now.
Tesla and TSLA stock woes are mirrored by many other EV makers and stocks.
Other Key Earnings
Netflix earnings are on tap Tuesday night with subscriber growth again in focus. NFLX stock is just below a traditional buy point, finding support at the 10-week line.
ServiceNow stock is extended, but is acting great. Wednesday night's results and guidance will be key for many software plays.
ASML reports Wednesday morning, with Lam Research due Wednesday night, followed by KLA and Intel Thursday night. Intel stock is still in range from a 10-week line rebound this past week, though earnings raise the risk of new buys considerably. ASML, KLA and LRCX stock are looking stretched after big bounces off the 10-week line.
Heavy truck maker Paccar reports Tuesday and heavy equipment play United Rentals is due Wednesday. Both arguably are flashing buy signals, early entries in emerging bases.
D.R. Horton earnings are due Tuesday. DHI stock has been consolidating for the past month, with moving averages catching up.
Catch The Next Big Winning Stock With MarketSmith
What To Do Now
The stock market rally is no longer the broad-based advance from late 2023. Instead, techs and some other leaders are diverging from small caps and certain sectors. However, market leadership remains strong, with new buying opportunities and recent buys generally extending gains.
Investors can add to their portfolio or stand pat, depending on their investing style as well as current holdings and exposure levels.
Buy as close to buy points or early entries as possible. Being a successful investor requires having the discipline not to buy extended — and doing the prep work for watchlists so you can take advantage of buying opportunities.
Earnings will ramp up in the next two weeks, especially for tech leaders. With the market rallying into earnings season, there's the risk that expectations are too high.
Know when your stocks are on tap — as well as when rivals, customers and suppliers report.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Threads at @edcarson1971, X/Twitter at @IBD_ECarson and Bluesky at @edcarson.bsky.social for stock market updates and more.
