Dow Jones futures fell Tuesday morning to start 2024 trading, along with S&P 500 futures and especially Nasdaq futures. Crude oil prices and Treasury yields yields jumped.
Tesla deliveries are expected before the open, after China EV rival BYD reported booming sales Monday.
The stock market is in strong shape to start 2024 after the Nasdaq's best performance in 20 years. A strong market rally has been in force since the end of October, with the major indexes on a nine-week win streak. The S&P 500 is just below all-time highs.
There could be some wobbles in early January, as volume returns and some tax selling takes place. So investors may want to see how that shakes out. But they should be looking for new buying opportunities, and reviewing past trades.
Nvidia, Microsoft, MercadoLibre, Celsius Holdings and Eli Lilly are all trading near buy points or early entries.
Dow Jones Futures Today
Dow Jones futures fell 0.55% vs. fair value. S&P 500 futures sank 0.7%. Nasdaq 100 futures declined 1.1%. Apple fell on a Barclays downgrade, adding to weakness on the major indexes.
The 10-year Treasury yield rose several basis points to 3.97%.
Crude oil futures jumped more than 2% as Iran sent a warship to the Red Sea, adding to Mideast tensions and shipping concerns.
China's official manufacturing index dipped 0.4 point in December to 49, the third straight month below the neutral 50 level and the lowest since June, which also was 49.0. Economists expected 49.5. The service-sector gauge edged up 0.2 point to 50.4, just below views for 50.5.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
EV Deliveries
Chinese EV and battery giant BYD sold a record 341,043 EVs in December, up 45% vs. a year earlier vs. and 13% above November's 301,903. Full-year sales of 3,024,417 topped BYD's target of three million vehicles, including plug-in hybrids.
BYD passenger sales of fully battery electric vehicles (BEVs) hit 190,754 in December, soaring to 526,409 in Q4. That should easily top Tesla, which will release Q4 production and delivery figures on Jan. 2. Tesla is expected to edge past its full-year delivery forecast of 1.8 million EVs, with record Q4 sales of just above 480,000.
Li Auto reported a record 50,353 EVs in December, up 137% vs. a year earlier and 23% vs. November. It sold 131,805 in Q4, above its expected range, with full-year deliveries up 182% to 376,030.
Nio delivered 18,012 EVs in December and 50,045 for the fourth quarter, exceeding its Q4 target for 47,000-49,000.
XPeng deliveries were a record 20,155 in December, just above past 20,000 EVs for a third straight month. Q4 deliveries were 60,158, toward the lower end of its forecast range.
U.S. EV startup Rivian will likely report quarterly production and delivery data on Tuesday. The EV pickup, SUV, and delivery van maker has been releasing such stats on the first market day after the quarter ends.
Tesla is near a buy point, while RIVN stock arguably has a handle. Li Auto stock is around aggressive entries. BYD, XPeng and Nio stock need some repair work.
Tesla stock, Microsoft and Nvidia are on IBD Leaderboard. MSFT stock is on the IBD Long-Term Leaders list. Nvidia stock, Celsius, MercadoLibre and Li Auto are on the IBD 50. MELI stock is on the IBD Big Cap 20. Nvidia was Friday's IBD Stock Of The Day.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock Market Rally
The stock market rally had a relatively quiet finish to a strong year.
The Dow Jones Industrial Average rose 0.8% in last week's stock market trading. The S&P 500 index advanced 0.3%. The Nasdaq composite edged up 0.1%. The small-cap Russell 2000 dipped 0.3%.
For the year, the Dow Jones climbed 13.7% and the S&P 500 leapt 24.2%. The Nasdaq surged 43.4%, its best performance since 2003.
Market breadth has improved dramatically in the past two months. Chips, software and megacap techs are still heavily represented among leading stocks, but industrial, construction, financial, travel, transportation and some medical plays are there too.
Sentiment indicators show elevated bullishness. The Nasdaq is 6.9% above its 50-day line, easing off from a few days ago. But it wouldn't take much to see the composite look extended again.
The 10-year Treasury yield fell 5 basis points to 3.86% for the week, after tumbling to a five-month low on Wednesday. For the year, the yield rose 3 basis points, but tumbled from 5% in late October.
U.S. crude oil futures fell 2.6% to $71.65 a barrel last week, or 10.7% for the year.
Stock Market Forecast 2024: Soft Landing May Not Bring The Gains You Expect
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF dipped 0.45% last week, with Microsoft stock a key component. The VanEck Vectors Semiconductor ETF was up 0.9%. Nvidia stock is easily the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF fell 1.2% last week and ARK Genomics ETF closed flat. TSLA stock remains a major component across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF declined 1.55% last week. The Global X U.S. Infrastructure Development ETF dipped 0.1%. U.S. Global Jets ETF descended 1.6%. SPDR S&P Homebuilders ETF edged up less than 0.1%. The Energy Select SPDR ETF retreated 1.3%.
The Health Care Select Sector SPDR Fund rose 1%, with LLY stock a major holding. The Industrial Select Sector SPDR Fund advanced 0.8%.
The Financial Select SPDR ETF tacked on 0.7%.
These Megacaps Had A Huge Year And Are In Prime Position Heading Into 2024
Stocks Near Buy Points
Nvidia stock rose 1.4% to 495.22 last week. The AI chip leader is near a 505.48 buy point from a flat base that formed primarily in the buy zone of a double-bottom base. NVDA stock led the S&P 500 in 2023, more than tripling in value to above $1.2 trillion. But with earnings skyrocketing and a forward P/E ratio of just 26, Nvidia arguably is cheap.
Microsoft stock edged up 0.4% to 376.04, extending a long string of tight weekly closes within the buy zone of a cup base. It's now forged a flat base with a 384.30 buy point, according to MarketSmith analysis. Earnings and sales growth have accelerated for the past three quarters.
MELI stock has been consolidating for the past few weeks. Like a number of leading stocks that have gone on strong runs, it's been finding support around its 21-day line recently. Shares fell 1.1% to 1,571.54 last week. Technically, MercadoLibre stock has a three-weeks-tight pattern with a 1,653.42 buy point. But investors could use a strong move from the 21-day, perhaps around 1,600, as a place to enter. MELI stock is on track to have a flat base in another week. That would let the fast-rising 50-day line close the gap some more. MercadoLibre earnings are in the triple digits, with revenue growth picking up to 40% in Q3.
CELH stock jumped nearly 9% last week to 54.52, rebounding back above the 50-day line. The energy drink giant has a 68.95 consolidation buy point, with 62.99 as an early entry. Investors could use a move above a trendline, using Thursday's high of 56.63 as a specific aggressive buy point. CELH stock has had a pattern of rebounding from the 50-day line straight up to consolidation highs. After Celsius stock's retreat in recent months as the broader market rebounded, its relative strength line has lagged, but after a big run.
Celsius earnings and sales are hot.
Eli Lilly stock rose 2.2% to 582.92 for the week, hitting resistance at the 50-day line, but just retaking the 10-week line. LLY stock has 629.97 flat-base buy point. But investors could use a decisive move above the 50-day line, which would also break a trendline, as an early entry. The 600 level also has been a key area for the weight-loss drug giant. As with Celsius, the RS line for Lilly stock has weakened in the past few months following a strong uptrend.
Revenue growth has accelerated solidly for the past two quarters, with Lilly earnings set to spike in 2024.
Five Tech Leaders Pause Bullishly. Ready To Run Again In 2024?
What To Do Now
After a strong year, the stock market enters 2024 on sound footing, though stocks sometimes stumble in January. Leaders such as Nvidia, Microsoft, Tesla and MercadoLibre are setting up new buying opportunities.
So you'll want to run screens and build up your watchlists, pouring over those charts.
It's also a good idea to study your 2023 trades. What were your best trades and your worst? Which big winners did you miss or get shaken out of early? Try to figure how you grab and hold more top performers while minimizing losers and losses. That could mean following your rules better — and doing your homework. Or it could mean you need to tweak your rules or investing style.
Don't try to live up to — or live down — last year's performance. Focus on making the best decisions at the moment.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
