Dow Jones futures fell modestly Monday night, along with S&P 500 futures and Nasdaq futures. Chinese economic data topped views while Tesla’s China EV registrations are on tap.
The stock market rally picked up steam in the past week, with strong gains, clearing key levels. The S&P 500 briefly faced resistance at the 200-day line, but moved above that key level on Friday. A large number of leading stocks flashed buy points.
Investors can be adding exposure gradually as the market rally improves. While many top stocks are now extended, Wendy’s (WEN), Exxon Mobil (XOM), Quanta Services (PWR), Celsius Holdings (CELH) and Insulet (PODD) are all actionable from early entries. Wendy’s and PWR stock have new flat bases, joining XOM stock and Insulet. CELH stock needs another week to forge a proper base.
Meanwhile, Tesla (TSLA) on Friday announced big price cuts in the U.S. and Europe, a week after slashing prices in China and key Asian markets. Early Tuesday, weekly Chinese EV registration data should show the initial impact from the China cuts.
Tesla stock closed modestly lower Friday but rebounded solidly for the week. Still, the EV giant faces a painful transition as investors increasingly view Tesla as an automaker, not a tech company.
The video embedded in this article discussed the strong week for the market rally, and analyzed WEN stock, Quanta Services and Celsius.
Chinese Economic Data
Chinese economic data came in better than expected overnight. Q4 GDP rose 2.8% vs. a year earlier, topping forecasts for 1.8%. Full-year GDP climbed 3%, slightly above views.
December retail sales declined 1.8% vs. a year before, but far above targets for an 8.6% dive. Industrial production climbed 1.3% vs. estimates for a 0.2% uptick.
With China ending strict Covid rules, the country is facing a massive wave of infections. Chinese authorities disclosed nearly 60,000 Covid-related deaths in Chinese hospitals between Dec. 8-Jan. 12.
But the prospects for China’s economy appear better going forward.
Dow Jones Futures Today
Dow Jones futures dipped 0.2% vs. fair value. S&P 500 futures fell 0.4%. Nasdaq 100 futures declined 0.6%.
U.S. stock markets were closed Monday for the Martin Luther King Jr. holiday. but other exchanges around the world were open.
The 10-year Treasury yield rose 3 basis points to 3.54%.
Crude oil futures fell 1%. Natural gas prices popped 8%. Copper futures sank 2%.
The Bitcoin price briefly hit $21,415 Sunday night, a two-month high. The leading cryptocurrency is currently trading above $21,000. Bitcoin was didn’t retake $17,000 until Jan. 8.
Bitcoin’s rise coincides with the stock market rally, which is showing a return to more speculative investments. That includes growth stocks, especially speculative-type plays like the ARKK ETF. Some meme stocks had a big week, notably Bed Bath & Beyond (BBBY). BBBY stock skyrocketed 179%, even though the retailer has signaled it’s heading toward bankruptcy.
Stock Market Rally
The stock market rally had a strong week, with the major indexes closing near session highs.
The Dow Jones Industrial Average rose 2% in last week’s stock market trading. The S&P 500 index popped 2.7%. The Nasdaq composite leapt 4.8%. The small-cap Russell 2000 jumped 5.3%.
The 10-year Treasury yield fell 6 basis points to 3.51%, even with Friday’s bounce. Markets strongly expect quarter-point Fed rate hikes in February and March, but then see policymakers on hold. Falling Treasury yields and brighter economic prospects elsewhere are pressuring the dollar, providing another boost to stocks and commodities.
U.S. crude oil futures jumped 8.3% to $79.86 a barrel last week. Copper prices jumped 7.65%.
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rallied 4.4% last week, while the Innovator IBD Breakout Opportunities ETF (BOUT) climbed 2.1%. The iShares Expanded Tech-Software Sector ETF (IGV) leapt 4.9%. The VanEck Vectors Semiconductor ETF (SMH) soared 6.7%.