Dow Jones futures fell slightly early Friday, along with S&P 500 futures and Nasdaq futures. Investors will turn to the November jobs report on Friday morning.
The Tesla semi truck delivery event took place on Thursday night Tesla ( TSLA ) archrival BYD is set to release EV sales growth numbers.
The stock market rally showed strong action on Thursday, with indexes mixed but Wednesday’s big gains bolstering Fed Chairman Jerome Powell’s comments. Thursday’s PCE inflation report, the Fed’s favorite rate gauge, showed a smaller-than-expected monthly increase as overall and core inflation cooled slightly again.
Ultra beauty ( ULTA ) headlined earnings reports Thursday night. ULTA stock was little changed overnight after reporting strong earnings and raising guidance. Shares of the beauty products retailer have already hit record highs, extending from buy points. Viva Systems ( VEEV ) beat fiscal Q3 views, but Q4 guidance was slightly below the consensus midpoint. VEEV stock fell modestly in extended trading. Shares closed above the 200-day line, around the initial entry.
At the same time, the Dow giant Caterpillar (CAT) is looking strong with CAT stock below the buy point. Head of Cyber Security Palo Alto Networks (PANW) and Marriott International (MAR) is also flashing buy signals.
Boeing stock is on a swing trader. Caterpillar was Thursday’s IBD stock of the day.
Dow Jones futures today
Dow Jones futures fell a fraction over fair value. S&P 500 futures sank 0.1%. Nasdaq 100 futures were down 0.3%.
The 10-year Treasury yield rose 2 basis points to 3.55%.
Dow futures, Treasury yields and more will change on the November jobs report, at 8:30 a.m. ET.
Note that overnight action in Dow futures and elsewhere does not necessarily translate into actual trading in the next regular stock market session.
Economists expect the November jobs report to show a gain of 200,000 in nonfarm payrolls, down from 261,000 in October. Consider the household survey, which showed a 328,000 job loss in October. The unemployment rate, based on the household survey, is expected to remain steady at 3.7%, with the labor force participation rate rising to 62.3%.
Other jobs data this week generally points to a gradual slowdown. Initial jobless claims fell sharply, but continued claims rose again. ADP reported a sharp decline in private sector hiring last month, while the October JOLTS survey saw a modest decline in job openings.
Tesla Semi Delivery Event
Tesla’s semi-truck delivery event began shortly after 5pm PT.
Tesla CEO Elon Musk will deliver some Tesla Semi EVs PepsiCo (PEP) on Thursday night. Speaking of late, the first Tesla Semi was unveiled six years ago and was scheduled to enter production in 2020.
Musk says the Tesla Semi, which uses the same Pleed Drive units as the high-end Model S, has a range of 500 miles on a single charge. Investors will be looking for specifics on price, range and freight. This will be important as Tesla’s semi-big rig buys EVs already on the market from Volvo, Nicola (NKLA) BYD (BYDDF) and others.
Another big question is what Tesla Semi production will be in the coming months. Musk did not elaborate on this.
Meanwhile, Tesla is now offering a $3,750,750 discount on the Model 3 and Model Y in the US this month. The idea is to encourage people to take delivery now. On January 1, a new $7,500 tax credit takes effect, subject to certain rate and income limits, prompting many buyers to wait. The tax credit should apply to most Model 3 sedans and Model Y crossovers, though the government has yet to provide an explanation.
Tesla halved the 8,000 yuan ($1,133) insurance subsidy for December purchases, as planned, but is now offering free charging and other perks that are reportedly 15,000 yuan higher.
Tesla stock closed flat at 194.70 on Thursday. On Wednesday, TSLA stock rose 7.7%, amid a major market rally and as China’s EV stocks rose, retracing a 21-day streak.
Tesla vs. BYD: Which EV giant is the best buy?
Chinese EV giant BYD is expected to release November deliveries on Friday or Saturday, with another record seen. BYD is expected to be China’s No. 1 auto brand for the month, rising Volkswagen (VWAGY). The VW Group will likely remain number one, including Audi.
BYD stock fell 2.2% to 25.07 but is still above the 50-day line. BYDDF vaulted 9.9% on Wednesday, along with other Chinese EV stocks.
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Stock market rally
The stock market rallied to a 30-minute low on Thursday morning, but gradually turned into a mixed, strong performance after Wednesday’s big gains.
The Dow Jones Industrial Average fell 0.6% in Thursday’s stock market trading Salesforce.com (CRM) a big negative. The S&P 500 index was down 0.1%. The Nasdaq composite rose 0.1%. The small-cap Russell 2000 retreated 0.2%.
U.S. crude rose 0.8% to $81.22 a barrel.
The 10-year Treasury yield fell 17 basis points to 3.53%, the lowest since late September. In the wake of Fed Chairman Paul’s comments and the PCE inflation report, markets are close to locking in a 50-basis-point Fed rate hike on December 14, ending four sessions of 75-basis-point moves. In addition, there is now a 50-50 chance of a fourth quarter Fed rate hike in February.
The dollar, moving along with yields, fell to its lowest level in nearly three months.
Stock close to purchase points
CAT stock fell 0.3% to 235.69. According to MarketSmith analysis, shares are hovering around the still-reliable 238 buy point from the cup base. Investors can look at 239.95 as another buy point, either as an upper handle to the seven-month cup base or as a traditional handle to the major consolidation that started in June 2021.
Shares of cybersecurity firm Palo Alto Networks rose 5% to 178.40, jumping above its 200-day line, regaining that key level for the first time since mid-September. This comes after it bounced back from its 50-day line on Wednesday, off Monday’s massive earnings selloff. CrowdStrike (CRWD). Investors can have a big, bullish basis on PANW stock with a buy point of 193.01. But shares are already actionable after clearing the 200-day line and the downtrend line from the April peak.
MAR stock fell 0.1% to 165.19, staying above the 164.99 handle buy point dating back to Aug. 16.
Among the top ETFs, the iShares Expanded Tech-Software Sector ETF ( IGV ) rose 1.1%, even with a big CRM selloff. The VanEck Vector Semiconductor ETF ( SMH ) was down 0.3%.
The SPDR S&P Metals and Mining ETF ( XME ) fell 0.8% and the Global X U.S. Infrastructure Development ETF ( PAVE ) rose 0.1%. The US Global Jets ETF ( JETS ) was down 0.4%. The SPDR S&P Homebuilders ETF ( XHB ) rose 1.25%. The Energy Select SPDR ETF ( XLE ) fell 0.3% and the Finance Select SPDR ETF ( XLF ) sank 0.6%. The Healthcare Select Sector SPDR Fund ( XLV ) advanced 0.3%
Reflecting the more speculative story stocks, the ARK Innovation ETF ( ARKK ) rose 1.1% and the ARK Genomics ETF ( ARKG ) rose 0.6%. Tesla stock is a major weight in Ark Invest’s ETFs. Cathy Wood Arch also has a small position in BYD stock.
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Market rally analysis
The stock market rally showed constructive action on Thursday, essentially maintaining Wednesday’s big gains.
The S&P 500 index bounced back to its 200-day moving average intraday, after finally retrieving that key level on Wednesday. The Russell 2000 also had its 200-day line. The Nasdaq is still working toward its 200-day retracement.
The Dow Jones gave up only a fraction of Wednesday’s gains, largely due to Salesforce. Many Dow Jones stocks, including Caterpillar, Boeing and UNH stocks, are showing strength. It reflects broad strengths in industrial, financial, health services and more.
October’s PCE inflation report was slightly better than expected. After a strong market rally on Wednesday on Fed Chairman Jerome Powell — who doesn’t exactly sound particularly dovish — only holding on to those gains on Thursday was constructive.
Friday’s jobs report is yet another hurdle. If the employment data points to some slowdown in the labor market, it could provide more stability for stocks. But a hot job market could trigger big sales.
Treasury yields and the dollar have fallen sharply over the past two days and over the past few weeks, providing a major drag for stocks. A rebound in yields and the greenback would not be surprising.
Note that market rallies have had a number of large one-day gains, followed by sideways or sliding action. This has made it difficult for investors to make progress even as the indices have trended higher over the past few weeks.
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what to do now
There were reasons to buy or hold on to Wednesday’s big move. On Thursday, investors can add some details, but the jobs report is a big question mark.
Friday’s market rally in the November jobs report could create a number of buying opportunities. But don’t be fooled into promising stocks before the big news. Instead, work on your checklists so you’re ready to take action. But also be prepared to reduce exposure if the market or your property goes south quickly.
Read the big picture daily to stay in tune with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.
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