Table of Contents
Dow Jones futures open Sunday evening, along with S&P 500 futures and Nasdaq futures. Fed chief Jerome Powell testifies before Congress, with inflation data due later this week. JPMorgan Chase (JPM) and other banks are kicking off the earnings season.
↑
X
Banking giants kick off earnings season next week
Last week’s stock market rally saw the S&P 500 and the Nasdaq reach new highs, although the latter continues to extend further. On the other hand, small caps fell below a key level.
Still, more shares gave buy signals. Metaplatforms (META), Palantir Technologies (PLTR) And ASML (ASML) are located in buying zones. In the meantime, Tesla (TSLA) skyrocketed. Nvidia (NVDA) posted modest weekly gains and continued to perform well after retreating from record highs.
Dow Jones futures today
Dow Jones futures open at 6:00 PM ET, along with S&P 500 futures and Nasdaq 100 futures.
Remember, overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading during the next regular stock market session.
Powell Testimony: Inflation Ahead
Fed chief Jerome Powell will testify before Congress on Tuesday and Wednesday. Investors will be watching for any shifts in Powell’s commentary on monetary policy. But if the recent string of slowing economic data continues, Powell’s earlier comments will point to rate cuts later this year.
Markets now see a 77.9% chance of a Fed rate cut at the September 17-18 meeting, with a 76.5% chance of two cuts this year.
The June CPI inflation report will be released on Thursday, following the June 5 soft jobs report. The PPI inflation data will be released on Friday.
Bank income due
JPMorgan Chase (JPM), Wells Fargo (WFC) And Citi Group (c) report earnings on Friday. They are all near buy points or early registrations.
Join IBD experts as they analyze leading stocks and the market on IBD Live
Stock market rally
The stock market rally showed positive effects on the major indices. The Dow Jones Industrial Average rose 0.7% in stock trading last week. The S&P 500 index fell 1.95%. The Nasdaq composite rose 3.5%.
However, the small-cap Russell 2000 fell 1% to fall below the 50-day line.
The Invesco S&P 500 Equal Weight ETF (RSP) fell by 0.4% to 163.38, falling further below the 50-day limit.
In contrast, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose by 1.6% to a record high. That reflects the strength of growth stocks, especially tech growth names, outside the megacaps. That lagged significantly behind the Nasdaq 100’s peak of 3.6%.
The Nasdaq is now 8.3% above its 50-day line, extended further. For example, the tech-heavy index extended on June 17, setting the stage for two weeks of sideways action. The chance of a break or relapse is greater again. It doesn’t have to happen right away and it doesn’t have to be that big, but those risks are increasing.
Ten-year government bond yields fell seven basis points to 4.27%, after peaking at 4.49% early this week.
U.S. crude futures rose 2% this week to $83.16 a barrel, up 10.1% in the past four weeks.
Copper futures rose 6.1% this week. The gold price rose by 2.6%, while the silver price rose by 7.4%.
Bitcoin fell 10.7% to $56,458.26, but recovered from a multi-month low of $53,700 early Friday.
Palantir leads this brigade of breakout stocks
ETFs
Among the growth ETFs is the Innovator IBD 50 ETF (FFTY) rose 1.4% last week. The iShares Expanded Tech-Software Sector ETF (IGV) rose 2.3% to just below its late 2021 peak. PLTR Stock is a member. The VanEck Vectors Semiconductor ETF (SMH) fell by 3.5%. Nvidia shares are by far SMH’s largest holding, while ASML is also an important part.
Reflecting more speculative stocks, ARK Innovation ETF (ARKK) rose 4.55% last week and ARK Genomics ETF (ARKG) fell by 1.1%. Tesla stock is the #1 stock in Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) rose 3.25% last week, supported by rising metal and coal prices. The Financial Select SPDR ETF (XLF) increased by 1%. JPMorgan stock, Citigroup and Wells Fargo are all major members.
But there was weakness elsewhere.
The Global X US Infrastructure Development ETF (PAVE) fell by 1.1%. US Global Jets ETF (JETS) fell by 2.6%. SPDR S&P Home Builders ETF (XHB) slipped 3.1%. The Energy Select SPDR ETF (XLE) retreated 1.15% and the Health Care Select Sector SPDR Fund (XLV) lost 0.9%. The Industrial Select Sector SPDR fund (XLI) fell by 0.5%.
Time the market with IBD’s ETF market strategy
Shares of Tesla jumped 27.1% this week to 251.52, shooting above the 200-day mark and beyond. Deliveries in the second quarter fell from a year earlier, but exceeded lower expectations.
Shares have now expanded significantly from the 191.08 buy point. TSLA stock is right on a long-term trendline back to its all-time high at the end of 2021. Ideally, Tesla would take a break.
Tesla earnings are expected on July 23, with a robotaxi event scheduled for August 8.
Nvidia
Nvidia shares rose 1.85% to 125.83 this week, bouncing off the 21-day line. An aggressive investor could have used Wednesday’s action as an opportunity to add a few more stocks. But NVDA stock could use a longer break.
Nvidia earnings won’t appear until mid-August. However, Taiwanese semiconductor manufacturing (TSM), which makes chips for Nvidia and many others, reports June sales on Wednesday and second-quarter results on July 18.
Meta stock
Meta shares rose 7.1% to 539.91, mostly on Friday, topping buy points at 514.01 or 522.08. Meta earnings will be released on July 31st.
Palantir stock
Palantir stock rose 7.5% to 27.23 and passed a 26.57 buy point on Friday, marking its best close since late 2021. The widespread consolidation over four months can be seen as a big step forward for a huge base. While actionable, PLTR stock is 18.7% above its 50-day line. The share is sensitive to large up and down movements.
Palantir’s earnings are in early August.
Shares of ASML rose 5.1% this week to 1,074.48, recovering from the 21-day line and moving back above a buy point of 1,056.34. ASML’s results are expected on July 17.
What to do now
The combination of the Nasdaq expanding while small caps, midcaps and the equally weighted S&P 500 ETF lose sight of their 50-day lines is not ideal.
Still, most leading stocks are doing well, with a steady stream of new buying opportunities in recent days.
If you’ve made any new purchases recently, they probably work. But be prepared if the market pulls back or turns again.
While there are yellow flags for making new purchases, the broader bullish trend is well intact. Investors must have significant to heavy exposure.
Be sure to look at your watchlists and review your portfolio.
It’s time to pay attention to earnings season. JPMorgan, Citigroup and Wells Fargo, along with Delta AirlineS (VALLEY), are expected next week, after which results for other companies will increase.
Fed chief Powell and inflation data will be key, with hopes of rate cuts providing a tailwind for the market.
Nvidia and ASML stocks are on the list IBD rankings. Meta Shares are listed on SwingTrader. Nvidia stock, Palantir and Citigroup are participating IBD50. Palantir stock is on the line IBD Bigcap 20.
Read The Big Picture every day to stay informed about market direction and the most important stocks and sectors.
Follow Ed Carson on Threads at @edcarson1971 and X/Twitter on @IBD_ECarson for stock market updates and more.
You might also like:
Why this IBD tool simplifies the search for top stocks
Catch the next big winning stock with MarketSurge
Do you want to make a quick profit and avoid big losses? Try SwingTrader
Best growth stocks to buy and watch
Tesla Extends Huge Run; BYD in purchasing zone makes major move abroad