Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq futures. A slew of economic data is on tap in a half-day session.
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Nasdaq Leads Market; Weatherford, Goldman Sachs, Novo Nordisk In Focus
The stock market rally had a positive session Tuesday, with the S&P 500 and Nasdaq setting record closes. Tesla (TSLA) surged Wednesday on stronger-than-expected deliveries, continuing a powerful run.
Bank stocks were key contributors as well. Goldman Sachs (GS), JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS) are trading around buy points or early entries. The Treasury yield curve has become less inverted as long-term yields price in a growing likelihood that Donald Trump will return to the White House.
Meanwhile, shale energy play Diamondback Energy (FANG) and oil machinery stocks Weatherford International (WFRD) and TechnipFMC (FTI) are making bullish moves in bases.
The video embedded in this article analyzes Tuesday’s market action and analyzes Weatherford. Goldman Sachs stock and Novo Nordisk (NVO).
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures and Nasdaq 100 futures edged lower even with Tesla continuing to provide a lift.
The ADP Employment Report is due at 8:15 a.m. ET, followed by weekly jobless claims at 8:30 a.m. ET. At 10 a.m. ET, the ISM services index is on tap. The June jobs report is scheduled for early Friday.
U.S. stock markets close at 1 p.m. ET on July 3, heading into Thursday’s July 4 holiday.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Biden Odds Drop
Texas Rep. Lloyd Doggett on Tuesday became the first Democratic member of Congress to call for President Joe Biden to drop out. Rep. Jim Clyburn, D-S.C., said he could support Vice President Kamala Harris as the nominee if Biden were to exit. Biden’s odds of being the Democratic nominee have tumbled to about equal while Harris’ have risen to roughly equal on PredictIt by Wednesday morning. Trump’s chances of retaking the White House didn’t rise much, but are up since Thursday night’s debate.
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Stock Market Rally
The stock market rally had a solid session, buoyed by Tesla but with decent gains elsewhere.
The Dow Jones Industrial Average advanced 0.4% in Tuesday’s stock market trading. The S&P 500 index climbed 0.6%, settling above 5,500 for the first time. The Nasdaq composite rose 0.8%, closing above 18,000.
The small-cap Russell 2000 rose 0.2%, just below its 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) climbed 0.45%, also below its 50-day.
The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) popped 0.85%, just below record highs.
In addition to bank and energy plays, many software, discount retail, shipping and medicals are acting well. On the downside, industrials are struggling while many housing and construction plays are reeling.
The Nasdaq composite is 7% above its 50-day line, modestly extended.
U.S. crude oil prices fell 0.7% to $82.81 a barrel, reversing lower from above $84 early Tuesday.
The 10-year Treasury yield fell four basis points to 4.43%, but after surging 19 basis points in the prior two sessions. The two-year Treasury yield slid three basis points to 4.74%, after climbing less than six basis points in the two previous trading days.
The yield curve is becoming less inverted as bond traders bet on higher budget deficits, and perhaps stronger economic growth, if Trump returns to the White House.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) gained 0.5%. The VanEck Vectors Semiconductor ETF (SMH) popped 1%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 0.8% and ARK Genomics ETF (ARKG) fell 1.5% to its worst close since late October. Tesla stock is the No. 1 holding across Ark Invest ETFs.
SPDR S&P Metals & Mining ETF (XME) rose 0.7% and the Global X U.S. Infrastructure Development ETF (PAVE) advanced 0.6%. The SPDR S&P Homebuilders ETF (XHB) edged up 0.1%.
The Energy Select SPDR ETF (XLE) fell 0.1%, with Diamondback Energy a member. The Health Care Select Sector SPDR Fund (XLV) sank 0.4%. The Industrial Select Sector SPDR Fund (XLI) gained 0.55%.
The Financial Select SPDR ETF (XLF) popped 1.2%, with JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, Citigroup and Wells Fargo all notable holdings.
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Tesla Stock
Tesla stock surged 10.2% to 231.26 on Tuesday. Q2 deliveries came in 443,956, above lowered forecasts though still down vs. a year earlier. Energy storage deployed jumped to a new high. TSLA stock, which blasted above its 200-day line on Monday, is now well extended from a 191.08 handle buy point cleared on June 26.
Tesla rose 2% early Wednesday.
Energy Stocks Near Buy Points
Diamondback Energy edged up 0.6% on Tuesday to 204.90, off session highs but continuing a run from the 50-day moving average. FANG stock is moving toward a 211.96 cup-base buy point. Shares flashed an early entry late last week as it moved off the 50-day line.
Weatherford stock advanced 2.3% on Tuesday to 124.53, building the right side of a cup base with a 129.70 buy point. Shares could be working on a handle, though it needs more time. The June 28 intraday high of 124.93 coincides with a downward-sloping trendline for WFRD stock.
TechnipFMC stock dipped 0.3% to 26.19 but still trending higher. FTI stock has a 27.30 buy point from a flat base, according to MarketSurge. Last week’s move above the 50-day line offered an early entry, with shares still in range for that.
Tesla Extends Run As It Retains BEV Crown; BYD Sales Near 1 Million
Bank Stocks Strong As Trump Odds Lift Yields
Goldman stock edged up 0.4% on Tuesday to 465.61, working on a 471.48 flat-base buy point. Shares found support at their 50-day line last Thursday. Investors could use Monday’s high of 464.02 as an early entry.
JPMorgan stock rose 1.65% to 208.83, above a 205.88 flat-base buy point. JPM stock had an early entry Friday as it decisively cleared the 50-day line and a trendline.
Bank of America stock climbed 2.3% to 40.93, clearing several weeks of tight action as part of a four-session bounce from the 50-day line.
Wells Fargo stock tilted 0.6% higher on Tuesday to 60.97 after retaking the 50-day line on Monday, offering an early entry. WFC stock has a 62.55 buy point from a shallow cup base.
Citigroup climbed 2% to 64.68. Shares are working up toward a 64.98 buy point from a flat base next to a prior base. Citi stock flashed a buy signal Friday as it ran above the 50-day line.
Morgan Stanley inched up 0.5% to 99.65 on Tuesday after clearing short-term levels above the 50-day line. MS stock has a 103.25 buy point from a flat Base.
Keep in mind that JPMorgan, Citigroup and Wells Fargo report earnings on July 12, with Goldman, BofA and Morgan Stanley a few days later.
What To Do Now
The stock market remains somewhat divided, with the Nasdaq extended from the 50-day line and the Russell 2000 below that key level. Some stocks have been flashing buy signals, though a fair number of those have pulled back or worse.
Investors may want to largely stand pat with their existing exposure, perhaps nibbling on new opportunities while taking action as other positions struggle.
Remember that the price of financial independence is forever vigilance. So stay engaged with the market and your portfolio.
Weatherford stock is on the IBD Leaderboard watchlist. Citigroup stock is on the IBD 50. Diamondback Energy was Tuesday’s IBD Stock of The Day. JPMorgan stock was Monday’s selection.
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 and X/Twitter at @IBD_ECarson for stock market updates and more.
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