Dow Jones futures were little changed Monday morning, along with S&P 500 futures and Nasdaq futures. Shifting presidential election bets are in focus. The next Federal Reserve meeting and a continued earnings wave are on tap this week.
Warren Buffett's Berkshire Hathaway on Saturday reported operating profit fell 6% vs. a year earlier to $10.09 billion. Revenue fell a fraction to $93 billion. Cash levels swelled to a fresh high of $325.21 billion, fueled by sales of Apple and Bank of America. Berkshire halted stock buybacks. BRKB stock edged lower.
Constellation Energy, one of the S&P 500's biggest winners in 2024, topped views early Monday, but fell amid other news. Fellow utility-nuclear-AI play Vistra, the top S&P 500 stock this year, reports later this week So do fellow top-20 S&P 500 stocks Arista Networks, Palantir Technologies and Howmet Aerospace.
Viking Therapeutics rose on promising early results for its experimental obesity pill, but came well off premarket highs.
Nvidia fell below a buy point last week but reclaimed a key level Friday. Late Friday, S&P Dow Jones Indices announced that Nvidia will replace rival chipmaker Intel in the Dow Jones Industrial Average before the open on Nov. 8. NVDA stock rose slightly early Monday on the Dow Jones news. Nvidia stock fell 4.4% to 135.37 lastweek, below the 140.76 buy point, but finished above the 21-day line.
Tesla tumbled below a buy point last week. Shares fell further early Monday, flirting with sell signal.
Investors should be careful until the election and other big news is out of the way.
Dow Jones Futures Today
Dow Jones futures fell a fraction vs. fair value. S&P 500 futures rose 0.1%. Nasdaq 100 futures edged higher.
The stock market had been pricing in a Donald Trump victory over Kamala Harris on Nov. 5 but pared those bets late last week, taking their cue from betting markets. Those betting markets showed continued movement over the weekend.
The 10-year Treasury yield fell several basis points to 4.29%, providing some relief to stocks. Treasury yields also had been rising on the Trump trade.
Crude oil futures leapt 3%. On Sunday, OPEC+ delayed a production increase by another month, until the end of 2024. The move wasn't a surprise, especially just ahead of U.S. elections.
Remember that overnight action in Dow futures and elsewhere doesn't necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally suffered losses last week, including Thursday's big sell-off led by Microsoft and Meta Platforms. The indexes bounced back somewhat on Friday thanks to Amazon.com and a weak jobs report, but faded into the close as Treasury yields jumped.
Trump Media & Technology, which has acted as a Trump election sentiment gauge, plunged nearly 41% in the past three sessions. That's after DJT stock skyrocketed 338% in just over a month. DJT was indicated solidly lower early Monday.
The Dow Jones Industrial Average shed 0.15% in last week's stock market trading. The S&P 500 index lost 1.4%. The Nasdaq composite, which hit a record high Thursday morning, gave up 1.5%. The small-cap Russell 2000 edged up 0.1%.
All four indexes bounced Friday but slashed intraday gains after peaking around their 21-day averages. The Dow and Russell 2000 did recover their 50-day lines after dropping below that key level Thursday.
The Invesco S&P 500 Equal Weight ETF fell nearly 1% for the week and failed to regain its 50-day line Friday.
The 10-year Treasury yield jumped 13 basis points to 4.36%, the highest level in nearly four months. The yield finally closed above the 4.3% level on Friday.
U.S. crude oil futures fell 3.2% to $69.49 a barrel last week.
What Trump Vs. Harris Election Outcomes Mean For S&P 500, Fed Rate Cuts
Stock Market Election Day … Week?
It's possible that the market will remain cautious for the next several days. Election Day is Tuesday, Nov. 5, but it's probable or even highly likely that it'll be unclear who won the presidential election for at least a few days as key states such as Pennsylvania count mail-in ballots.
So that uncertainty — which could stretch out to weeks — may hang over the stock market, as well as bitcoin, gold, Treasury yields and individual names such as Tesla and DJT stock.
The Federal Reserve meets Wednesday-Thursday, with a Fed rate cut seen as a lock on Thursday afternoon. But there's a chance of a December pause.
China's parliament meets this coming week. There are hopes or expectations that a major fiscal stimulus will be announced late in the week.
And, of course, there will still plenty of earnings reports.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF fell 1% last week. The iShares Expanded Tech-Software Sector ETF rose a fraction. The VanEck Vectors Semiconductor ETF slumped 3.25%. Nvidia stock is SMH's dominant holding.
Reflecting more-speculative story stocks, ARK Innovation ETF lost 2.2% last week and ARK Genomics ETF bounced 3%. Tesla stock remains a top holding across Ark Invest's ETFs.
SPDR S&P Metals & Mining ETF dipped 0.2% last week. SPDR S&P Homebuilders ETF retreated 1.7%. The Energy Select SPDR ETF dropped 2% and the Health Care Select Sector SPDR Fund gave up 0.6%.
The Industrial Select Sector SPDR Fund fell 1%. The Financial Select SPDR ETF edged down 0.1%.
Time The Market With IBD's ETF Market Strategy
Key Earnings
Constellation Energy reported better-than-expected earnings early Monday, and crushed revenue views. Constellation raised the midpoint of its full-year earnings guidance.
Peer Vistra is due on Thursday. The electric utilities, which are both nuclear and AI plays, have been consolidating near the 21-day line after their latest runs.
But Vistra, Constellation Energy and some utility and nuclear plays sold off Monday morning on a regulatory decision. They did pare losses somewhat on Constellation's Q3 results.
Palantir's earnings are due Monday night. Shares fell from record highs last week, but found 21-day support.
Howmet Aerospace earnings are early Wednesday. The titanium alloy supplier for aircraft is one of the top S&P 500 performers without an AI connection. Howmet stock has pulled back to find support at the 50-day line, just below the 21-day.
Arista stock is due Thursday night. The AI networking play fell to about its 10-week line, but bounced to end the week near the 21-day line in a possible emerging consolidation just above a prior base. A strong move would break a downtrend.
Axon Enterprise, Iron Mountain, FICO, Targa Resources, also top-20 S&P 500 performers in 2024, also are due this coming week.
AI chip IPO Astera Labs is another notable report on tap, along with cybersecurity giant Fortinet and e-commerce and payments giant MercadoLibre. All are near buy points.
Nuclear Power Stocks Skid On This Regulatory Move
Tesla Stock
Shares tumbled 7.5% to 248.98 for the week, well below a 264.82 cup-with-handle buy point cleared on Oct. 25, according to MarketSurge. Shares are still holding the bulk of the prior week's 22% spike on earnings, but are getting close to the low of the Oct. 24 gap-up day.
Early Monday, TSLA stock fell modestly to about 244, which would trigger the 7-8% automatic sell rule.
Tesla China sold 68,280 vehicles in October, including exports, a six-month low, according to China Passenger Car Association data released Monday. Local China sales were sluggish in October.
It's possible that some of Tesla's recent action reflects shifting perceptions on the presidential race, with CEO Elon Musk aggressively campaigning for Donald Trump.
Meanwhile, China EV giant BYD reported higher revenue than Tesla for the first time in the third quarter, while its October sales suggest BYD will retake the BEV crown from Tesla in Q4.
How To Handle Stock Market Election Jitters
The stock market rally has retreated but is still holding key support. While some mammoth earnings are out of the way, the presidential election and other big news will remain big uncertainties in the short run.
The upside from a modest pullback is that most leading stocks still look healthy, pulling back to key levels. If the market takes off, a number of buying opportunities could present themselves. So keep your watchlists fresh.
But if the major indexes break below their 50-day lines, you'll want to reduce exposure. So have your exit strategy in place.
Nvidia, Axon and MercadoLibre stock are on IBD Leaderboard. Nvidia stock is on SwingTrader. Nvidia, Arista and Fortinet stock are on the IBD 50. Arista Networks, Axon and Palantir stock are on the IBD Big Cap 20.
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