Dow Jones futures rose slightly Friday morning, along with S&P 500 futures and Nasdaq futures. Broadcom (AVGO), MongoDB (MDB) headlined overnight earnings, with the August jobs report on tap. Tesla (TSLA) unveiled its long-awaited Model 3 upgrade in China overnight.
X
The stock market rally opened higher, as a relatively tame PCE inflation report continued a wave of Fed-friendly economic figures. But the major indexes pared modest gains, closing mixed heading into the August employment data.
Salesforce.com (CRM), CrowdStrike (CRWD) and Okta (OKTA) were earnings winners, while Shopify (SHOP) and Amazon.com (AMZN) popped on an expanded alliance.
Earnings
Broadcom, MongoDB, Nutanix (NTNX), Lululemon Athletica (LULU), Samsara (IOT), Dell Technologies (DELL) reported after the close.
Winners: NTNX stock surged with Dell and MongoDB up solidly and Lululemon slightly.
Losers: Samara fell slightly and AVGO declined solidly.
Tesla (TSLA) unveiled the “Highland” Tesla Model 3 in China overnight, while also slashing Model S and X prices in that country. TSLA stock is hovering around an early buy point.
Tesla China rivals, Li Auto (LI), Nio (NIO) and XPeng (XPEV) are set to release August deliveries early Friday. EV and battery giant BYD (BYDDF) will report August sales on Friday or Saturday.
AMZN stock and Li Auto are on SwingTrader. LI and IOT stock are on the IBD 50. LULU stock is on the IBD Big Cap 20. Amazon was Thursday’s IBD Stock Of The Day.
The video embedded in the article reviewed the market rally action and analyzed AMZN stock, Shopify, Meta Platforms (META) and General Electric (GE).
Jobs Report
The Labor Department will release the August jobs report at 8:30 a.m. ET. Economists expect nonfarm payrolls to rise by 170,000, down from July’s 187,000. The jobless rate holds at 3.5%. Average hourly earnings should climb 4.4% vs. a year earlier, steady with July.
At 10 a.m., Wall Street expects the August ISM manufacturing index edging up 0.4 point to 46.8, but still holding below the 50 level.
Dow Jones Futures Today
Dow Jones futures were 0.2% above fair value. S&P 500 futures rose 0.2% while Nasdaq 100 futures climbed 0.1%.
The 10-year Treasury yield rose slightly to 4.11%.
The jobs report will be sure to swing Dow futures and Treasury yields Friday morning.
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 had a mixed session, with growth stocks continuing to lead.
The Dow Jones Industrial Average fell 0.5% in Thursday’s stock market trading. The S&P 500 index dipped 0.2%. The Nasdaq composite eked out a 0.1% gain.
The small-cap Russell 2000 sank 0.2%, reversing lower after briefly topping the 50-day line.
Leaders continued to act well, with more names such as AMZN stock offering buy signals. Leadership also continues to expand, with growth and energy doing well but the housing sector rebounding, a variety of industrial/construction/metals plays looking good and even travel shoring up.
U.S. crude oil prices popped 2.45% to $83.63 a barrel on Thursday. Oil futures have surged 23% in the past three months.
Copper futures dipped 0.3% on Thursday, but fell 5.6% for the month.
The 10-year Treasury yield fell 3 basis points to 4.09%. The 10-year yield is down 15 basis points so far this week.
Friday’s jobs report and other economic data will be key for Treasury yields and the stock market rally.
ETFs
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.55%. The iShares Expanded Tech-Software Sector ETF (IGV) gained 0.8%. IOT stock and Nutanix are IGV components. The VanEck Vectors Semiconductor ETF (SMH) advanced 0.4%. AVGO stock is a significant SMH holding.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 0.5% and ARK Genomics ETF (ARKG) was just above break-even. Tesla stock is the No. 1 holding across Ark Invest’s ETFs. SHOP stock also is a top-10 holding.
SPDR S&P Metals & Mining ETF (XME) edged up 0.15%. U.S. Global Jets ETF (JETS) descended 0.3%. SPDR S&P Homebuilders ETF (XHB) stepped up 0.3%. The Energy Select SPDR ETF (XLE) edged up 0.1% and the Health Care Select Sector SPDR Fund (XLV) slumped 1.2%.
The Industrial Select Sector SPDR Fund (XLI) retreated 0.45%.
The Financial Select SPDR ETF (XLF) declined 0.4%. The SPDR S&P Regional Banking ETF (KRE) rose 0.5%.
Five Best Chinese Stocks To Watch Now
Tesla Model 3 Upgrade
Tesla put its upgraded Model 3 on sale in China on Friday. The Shanghai plant has been producing the “Highland” Model 3 for the past few weeks, slowly ramping up. Dealers have been taking reservations in the past few weeks as well.
Photos of the new Model 3 show a modest refresh of the exterior and interior.
The new Model 3 is getting a 9% battery range boost. But the price will be 12% higher.
The upgraded Model 3 will start at RMB 259,900 ($35,810.00) vs. RMB 231,900 ($31,950) for the old version. That was a surprise. The speculation was that the upgraded Model 3 would see a big price cut, or at least keep the price steady.
The upgraded EV also reportedly has lower production costs, so Tesla could see a much-needed boost to profit margins.
It’s not clear when Tesla’s Fremont plant will start making the new version for the U.S.
Also on Friday, Tesla slashed Model S and X prices in China. It cut the base Model S by 14% and base Model X by 18%. The Plaid versions of those luxury vehicles were reduced by roughly 20%.
Meanwhile, Tesla appears to be stepping up North America inventory discounts on the Model 3 and Model Y, as margin pressures continue. Also, federal prosecutors reportedly are probing Tesla for misuse of funds as well as inflating battery ranges.
Tesla stock rose 0.5% to 258.08 on Thursday, continuing to hold above the 50-day line after Tuesday’s big surge. Investors could use Thursday’s high of 261.18 as an early entry. The EV giant has a 299.29 official buy point, according to MarketSmith analysis.
China EV Sales
Li Auto, Nio and XPeng will report August deliveries early Friday.
Li Auto will presumably report deliveries comfortably above 30,000 once again, with production capacity constrained. However, Li did announce an insurance subsidy on Wednesday. Li stock edged down 0.8% to 41.65, holding the 21-day line.
Nio deliveries will likely be around 20,000 in August, though the EV startup gave subdued forecasts for August-September sales earlier this week. Nio stock fell 3.75% on Thursday, between its 50-day and 200-day lines.
XPeng deliveries should top 10,000 again, with production of its G6 crossover slowly picking up. XPEV stock fell 5.8%, consolidating after some huge moves in recent months.
BYD may release August sales Friday or Saturday. It’s unclear if the China EV and battery giant will top July’s record 262,161. BYD stock dipped 0.3% on Thursday, modestly below the 50-day line. Shares have jumped 9.2% this week after a big sell-off earlier this month.
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What To Do Now
The stock market rally paused Thursday but the major indexes have had a big week, holding on to Tuesday’s decisive gains. A growing number of stocks are offering buying opportunities, with many more in the wings.
Investors should be gradually adding exposure as the market continues to act well. If you’re adding 5%, 10% a day, it doesn’t take long to be significantly or fully invested.
Make sure you’re prepared by keeping your watchlists up to date. Extra work now can help you get in the right stocks at the right time.
Friday’s reaction to the August jobs report will be important.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on X/Twitter at @IBD_ECarson for stock market updates and more.
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