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Dow Jones futures will start trading on Sunday evening, along with S&P 500 and Nasdaq futures. The stock rally showed strong action last week, with the S&P 500 hitting a new high and the Nasdaq coming back in some key areas.
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Friday’s jobs report will come with the stock market shut down, although fixed income markets are active. You’re here (TSLA) delivery figures are also expected over the long weekend.
Google Parent Alphabet (GOOGL), Microsoft (MSFT), Apple (AAPL) iPhone Supplier Qorvo (QRVO) and Diamondback Energy (FANG) all posted new shopping points on Thursday. Google and Microsoft shares reflect bullish action among tech titans. Qorvo stock is the last chip player to explode. Diamondback stock is one of many oil fields that look strong as crude oil prices tend to rise.
Breakouts are among the many reasons to be more optimistic about the stock market recovery. The S&P 500 broke 4000 for the first time while the Nasdaq and Russell 2000 recovered their 50-day lines. The Nasdaq has one more final test before investors can sense that the divided market is turning into a large market rally.
Google stock and Microsoft are on the IBD rankings. Google and FANG shares are on SwingTrader. MSFT stock is on IBD Long-Term Leaders. Tesla stock is on the IBD 50. Google and Qorvo stock is on the IBD Big Cap 20.
Overview: Nasdaq Rises As Market Tone Improves
Jobs report
The Department of Labor will release the March jobs report at 8:30 a.m. ET. Economists expect nonfarm workforces to rise by 625,000 for the month, rising as the easing of coronavirus restrictions and multiple stimulus packages spur a hiring boom that is expected to continue for several months . Wall Street sees the unemployment rate drop from 6.2% to 6%.
Tesla deliveries
Analysts are expecting 163,000 Tesla deliveries in the first quarter, with reduction estimates just ahead of Tesla’s report. The report could arrive on Friday or as late as Monday.
Sales of Tesla Model Y kicked off in China in January. Model Y sales reportedly strong in the United States
However, competition is mounting for the latest Tesla model. Ford (F) sold 6,614 Mach-E crossovers in the United States in the last quarter, almost all of them in February and March. Volkswagen (VWAGY) started selling its much cheaper ID.4 crossover in the United States at the end of March.
The VW ID.4 also started deliveries to China at the end of last month. The Ford Mach-E began production in China.
Biden’s infrastructure plan calls for expanded EV credits and a strong expansion of charging stations. Tesla, who has hit the cap on federal tax credits, could be a big winner. But it could take months for these credits to be approved and come into effect.
Tesla stock jumped 7% last week to 661.75. But on Thursday, stocks fell 0.9%, falling back below the 21-day exponential moving average.
Meanwhile, Tesla’s Chinese rivals Nio (NIO) and Xpeng (XPEV) on Thursday reported strong deliveries in March. Li Auto (LI) is expected in the next few days. Nio’s stock rose 1.7% on Thursday while Xpeng rose 1.2% and Li Auto rose 1%, all closing near session lows.
Dow Jones Futures today
Dow Jones futures will open at 6 p.m. ET, as will S&P 500 and Nasdaq 100 futures.
Keep in mind that an overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular trading session.
Join the IBD experts as they analyze the exploitable stocks during the stock market rally on IBD Live.
Coronavirus news
Coronavirus cases around the world have reached 130.12 million. Covid-19 deaths have exceeded 2.83 million.
Coronavirus cases in the United States have reached 31.23 million, with deaths exceeding 566,000.
Stock market rally last week
The stock rally improved markedly, with Russell 2000 and the Nasdaq intensifying and the S&P 500 offsetting 4000 for the first time.
The Dow Jones Industrial Average index edged up 0.25% in stock trading last week, holding near record highs. The S&P 500 Index climbed 1.1% to a new high. The Nasdaq composite jumped 2.6%. The Russell 2000 gained 1.5%.
The 10-year Treasury yield hit a pandemic high of 1.77% during the week, but then fell on Thursday to close at 1.676%. Rising Treasury yields have put pressure on the Nasdaq and growth stocks in recent weeks.
Among the top ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.9% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) rose 0.1%. The iShares Expanded Tech-Software Sector (IGV) ETF rose 3.3%, with Microsoft stock being the No.1 component. VanEck Vectors Semiconductor (SMH) ETF jumped 4.7%, Qorvo stock and many others that have fueled solid gains.
The SPDR S&P Metals & Mining ETF (XME) climbed 1.25% and the Global X US Infrastructure Development ETF (PAVE) gained 1.1%. US Global Jets ETF (JETS) rose 1.4%.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) jumped 6% and ARK Genomics ETF (ARKG) jumped 5.8%. But both cut Thursday’s gains to close below their 21-day lines. Tesla shares are the main holdings of ARK Invest ETFs.
Read The Big Picture daily to stay in sync with market direction and major stocks and sectors.
Qorvo bursts
Qorvo stock rose 5.6% to 192.90 on Thursday, breaking through a buy point of 185.96 and hitting a new high. The buy zone extends to 195.15. The 5G game and Apple iPhone is one of the many chip stocks to be busted in recent days.
Apple stock rose 1.5% last week, finding support just above its 200 day line and recovering its 21 days. But it’s still well below its 50-day limit.
Microsoft actions
Microsoft stock rebounded 2.8% Thursday to 242.35, rebounding higher from its 21-day and 10-week lines and ultimately closing above 240. Investors could buy MSFT shares here. Tech titan Dow Jones has a flat base with a buy point of 246.23.
Google Stock Flashes Buy Signals
Google stock rebounded 3.3% to 2,129.78 on Thursday, capping a weekly gain of 5.2%. The internet giant bounced back from its 10 week line and resumed its 21 day line before releasing a downtrend and a tight three week entry around 2114. Thursday also marked a record high for the GOOGL action. So there are already many buying opportunities.
Alphabet stock has an official fixed-base buy point of 2,145.24, according to MarketSmith analysis.
Alphabet was this week’s New America feature.
Diamondback stock bounces higher
Diamondback stock jumped 10.5% to 81.22 on Thursday, making it the S&P 500’s best performance of the day. The bullish rebound of the 10 week line also recovered the 21 day line and broke a downtrend. This offered several buy signals. FANG stock ended the week 12% above its 10 week line, so it is extending. However, with the 10 week line rising to start next week, FANG stock could look better.
The FANG stock was the IBD stock of the day Thursday.
Analysis of market rallies
The stock market rally has had an encouraging week. The S&P 500 is at a new high, reflecting the widening market rally. The Dow Jones is hovering at record highs. The Russell 2000 is back above its 50 and 21 day moving averages after looking weak for the previous two weeks.
The Nasdaq rebounded above its 21 days on Wednesday in what was arguably a follow-up day. On Thursday, the high-tech index rose above its 50-day line. The final test is moving above its short-term March highs. The large-cap Nasdaq 100, with major weights from Apple, Google and Microsoft, recovered its 50-day line and its March peak.
After a few weeks of difficult trading, a number of stocks erupt and resist. The chip business has come to the fore as tech titans like Microsoft and Google step up. Meanwhile, a number of oil names appear strong. A few other steel names erupted last week, despite some drops on Thursday. The housing sector as a whole, from builders and renovations to furnishings, is healthy. Travel stocks are consolidating after a good ramp-up.
One market segment remains sluggish: much appreciated growth, including Tesla stock. While several have bounced back for the week, most are well below their 50-day lines and generally their 21-day lines. They may need a long period of rest, while some may not recover for years, if at all. The stock market is looking to the future, so don’t look back on past winners. Wait for them to form bullish bases and prove themselves once more.
Game plan
Investors should have increased their exposure somewhat last week. The main clues seem to be healthier while the rashes are working. Don’t feel the need to rush. Let the market attract you.
Have some diversity in the main stocks you own or watch. Focus on the best stocks, but make sure you have names from a variety of groups. This will alert you to bullish movements in specific groups or sectors while limiting your group-specific liquidation risk. In others, don’t buy all the stock of chips that burst.
Always have an exit strategy. With the stock rally at a key point and still subject to large swings, you need to have a plan to exit a stock.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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