Dow Jones futures opened Sunday evening, along with S&P 500 and Nasdaq futures, amid growing speculation that President Joe Biden may drop out of the race.
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Nasdaq reverses after hitting 18,000; Uber, JPMorgan, Hilton in focus
Biden will discuss the future of the campaign
President Biden will discuss the future of his re-election campaign with family at Camp David on Sunday, NBC News reported Saturday, citing multiple sources. This comes after Thursday night’s presidential debate vs. Donald Trump, in which Biden gave a disastrous performance. That raised concerns about his fitness for office, especially as he seeks a second four-year term. Senior Democratic officials have publicly expressed their continued support, but privately many are worried.
Biden is “reliably engaged” from 10 a.m. to 4 p.m. every day, White House aides told Axios, with lapses and fatigue more common at other times of the day.
Biden’s chances fall
Biden’s chances of getting the Democratic nomination have dropped to just 60% vs. 72% on Friday, down from 85% before the debate. Vice President Kamala Harris’ chances of getting the nomination have increased to 24% from 13% on Friday. California. Govt. Gavin Newsom is at 14%, down slightly from 17% on Friday.
Biden’s chances of winning the presidency have now dropped to 25% vs. 36% on Friday and 48% on Thursday before the debate. Donald Trump’s chances are at 59%, little changed from Friday and 53% before the debate. However, the chances of a GOP sweep have increased.
Rising odds of Donald Trump retaking the presidency with a Republican-controlled Congress hit solar and hospital stocks on Friday.
Trump’s debate victory gave the S&P 500 a boost. Then It Happened.
Dow Jones Futures Today
Dow Jones futures open at 6 PM ET on Sunday, along with S&P 500 and Nasdaq 100 futures.
Remember that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Stock market highlights
Stock market growth gave some mixed signals last week. However, on a weekly basis, the major indexes are showing tight action, with the Nasdaq’s strength trend intact.
The Dow Jones Industrial Average fell 0.1% in last week’s trading on the stock market after a strong start to the week. The S&P 500 fell 0.1% and the Nasdaq composite rose 0.2% as both bounced back from record highs on Friday morning.
The small-cap Russell 2000 rose 1.3%, regaining its 50-day line.
Looking at a weekly chart, the Nasdaq hasn’t shown any real weakness, rising for the past four weeks and nine of the past 10.
The Nasdaq is 5.9% above its 50-day line, slightly extended even with sideways action over the past two weeks. A longer pause or a slight pullback is likely to be constructive, allowing the stock to rally and giving it more room for further upside.
Meta Platforms (META), Amazon.com (AMZN) and Tesla ( TSLA ) broke out during the week, although they hit resistance on Friday. Nvidia (NVDA) retreated but found its footing.
The software went live last week, with AppLovin (APP), Monday.com (MNDY) and Service Now (NOW) flash buy signals.
Car sales in China
Investors will get June and Q2 sales from Chinese EV makers Nothing (NOTHING), That car (AI), XPeng (XPEV) and Zeekr (ZK) early Monday and possibly EV and the battery giant BYD (BYDDF).
Tesla and Rivian (RIVN) should publish the figures early on Tuesday. Most automakers will release second-quarter US sales on Tuesday as well.
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ETFs
Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) fell 0.4% last week.
The iShares Expanded Tech-Software ETF ( IGV ) jumped 2.4%, its fourth straight weekly advance. Shares of ServiceNow and AppLovin are IGV holdings. The VanEck Vectors Semiconductor ETF ( SMH ) dipped 1.6%, but was off some lows. Nvidia stock is SMH’s dominant holding.
Reflecting the more speculative story stocks, the ARK Innovation ETF ( ARKK ) rose 1.4% last week and the ARK Genomics ETF ( ARKG ) fell 3.5%, back to April lows. Tesla shares are No. 1 holding in all Ark Invest ETFs.
Time the market with IBD’s ETF Market Strategy
Megacap Stocks
Shares of Nvidia fell 2.4% for the week to 123.54. But after falling 6.7% on Monday, capping a three-day selloff, the AI chip leader rallied and held above its 21-day moving average. Shares of NVDA could use a longer break, making a new base and letting the 50-day line reach.
Meta shares rose 1.9% to 504.22. Shares cleared a 514.01 cup handle buy point on Thursday, but fell nearly 3% on Friday. However, there are still some early entries inside the glove.
Amazon shares gained 2.2% to 193.25, surpassing the 191.70 flat-based buy point. Shares fell 2.3% on Friday.
Tesla shares jumped 8.1% to 197.88, breaking from a 191.08 buy point. The buying range extends to 200.63. TSLA shares hit resistance at the 40-week line on Friday, but closed higher.
Tesla’s big weekly gain came after some analysts cut second-quarter delivery estimates ahead of the EV giant’s news release on Tuesday.
Amazon reached this milestone in the Andy Jassy era. What is expected next?
Software stocks in purchasing areas
Shares of AppLovin rose 5.9% for the week to 83.22, clearing a narrow trend and a short-term high of 82.66 on Thursday, providing an early entry. The official flat-based buy point is 88.50, according to MarketSurge.
Shares of Monday.com jumped 7% last week to 240.76, rebounding from the 50-day line in a brief, mini-double consolidation near another base. The official buy point is 249. However, MNDY shares cleared a trend line on Thursday. On Friday, the software maker tested a near-term high of 239.54, which roughly coincides with the previous base’s buy point of 239.22.
Shares of ServiceNow rose just over 5% to 787.19, breaking a trend line. Shares are up 23% from a May 31 intraday low of 637.99. The official buy point is 815.32. Ideally, NOW the stock would create a handle.
Meanwhile, a number of software stocks are rallying off the bottom, trading within fundamentals, while several leaders have extended.
Investors can use IGV — which has a very similar chart to ServiceNow’s — or other software ETFs to play this sector move.
Market Rally Analysis
There are many ways for active investors to play in the current stock market rally.
A very active trader may have made multiple trades over the past two weeks, capturing several winners while also exiting a number of stocks that faded quickly between mini-rotations. Other traders may have chosen to take little or no action depending on how their existing positions performed.
The key is to find the investment style and rules that work for you.
Pay attention to market and sector action. Many software names should be on your watch lists. And while financials and industrials pulled back, many stocks in those areas are very close to being active.
The presidential race is a big wild card, with Biden’s debate performance and related fallout creating much more uncertainty months before Election Day.
Read the Big Picture daily to stay in sync with market direction and key stocks and sectors.
Shares of Nvidia, Amazon and Meta are on the IBD Leaderboard. Amazon and Meta stocks are on SwingTrader. Shares of Nvidia, Monday.com and ServiceNow are in the IBD 50. AppLovin was Friday’s IBD Stock Of The Day while Amazon stock was Thursday’s pick.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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