Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. Broadcom (AVGO), MongoDB (MDB) headline overnight earnings, with the August jobs report due Friday morning. Tesla (TSLA) reportedly will launch its long-awaited Model 3 upgrade in China overnight.
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.
Broadcom, MongoDB, Nutanix (NTNX), Lululemon Athletica (LULU), Samsara (IOT), Dell Technologies (DELL) reported after the close. MDB stock, Nutanix and Dell were big winners. LULU stock also rose while Samsara and AVGO stock fell.
Tesla (TSLA) is hovering around an early buy point amid Chinese media reports that the EV giant will put its “Highland” Model 3 on sale in China Friday.
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. Li Auto stock is near a possible entry, holding above its 21-day line.
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 flat vs. fair value. S&P 500 futures were little changed while Nasdaq 100 futures edged lower.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
AVGO stock fell solidly overnight after Broadcom earnings and sales slightly beat. The chip and software giant gave in-line guidance. Broadcom stock rose 3.4% to 922.89 on Wednesday, just below the 923.18 flat-base buy point. The relative strength line hit a new high Wednesday, a bullish sign.
MDB stock rose solidly in extended trade, but off initial highs, after MongoDB earnings trounced views and the database software firm guided solidly higher. MongoDB climbed 1.5% to 381.30 on Thursday. It has a 439 buy point, but investors could use a decisive move above the 50-day line as an early entry.
NTNX stock surged after hours, signaling a gap out of a base going back to last December. Nutanix beat views and announced a $350 million buyback. Nutanix stock rose 0.9% to 31.14 on Thursday.
IOT stock slightly in overnight action as Samsara unexpected eked out a 1-cent per-share profit. The Internet of Things and AI play advanced 2.2% to 27.36 on Thursday. Samsara stock has a 29.79 double-bottom buy point. Investors could use a trendline break just above 28 as an early entry.
DELL stock jumped after Dell earnings easily beat, signaling an 18-month high. Shares climbed 1% on Thursday to 56.24.
LULU stock climbed modestly after Lululemon earnings modestly beat views and the yoga apparel retailed guided in line Lululemon stock climbed 1.2% to 381.26 on Thursday, retaking the 50-day line. Investors could use a move above the 394 area as a buy area, but LULU stock has had some wild action in recent months.
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.
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%.
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Tesla Model 3 Upgrade?
Tesla is expected to put its upgraded Model 3 on sale in China on Friday, according to local media reports. The Shanghai plant apparently 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.
Leaked photos of the new Model 3 suggested limited changes to the exterior.
A big question is whether Tesla will keep Model 3 prices steady or slash them to boost demand. The upgraded EV reportedly has lower production costs, giving Tesla room to boost margins or sales with its pricing.
Tesla China will likely start exporting the new Model 3 to Europe and other key markets later this year. It’s not clear when Tesla’s Fremont plant will start making the new version for the U.S.
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. But those didn’t seem to bother investors for now.
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, the first time it’s joined China’s EV price wars. 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 new G6 crossover slowly picking up. XPEV stock fell 5.8%, with shares 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. Exports are stepping up. 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 continues to act well. 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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