Dow Jones futures edged higher early Friday, along with S&P 500 futures and Nasdaq futures, with the September jobs report on tap. Tesla slashed U.S. prices on the Model and Model Y. Exxon Mobil reportedly is near a big takeover deal.
The stock market came well off intraday lows. The 10-year Treasury yield edged lower, while crude continued to slide.
It’s still a stock market correction. A rally attempt continues, but there’s been no follow-through day to confirm the uptrend. It’s a key time to be watching stocks with relative strength lines at or near highs, reflecting strong performance vs. the S&P 500.
Nvidia stock, Tesla (TSLA), Meta Platforms (META), Arista Networks (ANET), Qualys (QLYS), Eli Lilly (LLY) and Vertex Pharmaceuticals (VRTX) are stocks holding or retaking key levels with strong RS lines.
Tesla stock fell slightly early Friday as the EV giant continued its steady stream of price cuts in 2023.
Nvidia (NVDA), Arista Networks and Meta Platforms are already on IBD Leaderboard, with Tesla on the Leaderboard watchlist. TSLA stock is on SwingTrader. Meta stock, Nvidia, Qualys, Arista Networks, Tesla and Eli Lilly are on the IBD 50. Nvidia, Tesla and ANET stock are on the IBD Big Cap 20.
Exxon Mobil (XOM) is near a deal to buy Pioneer Natural Resources (PXD) for roughly $60 billion, The Wall Street Journal reported Thursday night. XOM stock fell modestly Friday morning, while PXD stock jumped 10%.
The Labor Department will release the September jobs report at 8:30 a.m. ET. Economists expect to see nonfarm payrolls up by 160,000, with the jobless rate ticking down to 3.7% and average hourly earnings up 0.3% vs. August. That would be a modest, but still-solid report. The Federal Reserve would like to see more weakness. Recent jobs data has been mixed but generally solid. However, there are reasons to believe that job growth will slow as the year winds down.
Dow Jones Futures Today
Dow Jones futures were a fraction above fair value. S&P 500 futures nudged higher. Nasdaq 100 futures rose 0.15%. TSLA stock was a slim drag on the S&P 500 and Nasdaq futures.
The 10-year Treasury yield edged up to 4.73%.
The September jobs report will no doubt 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.
Aehr Test Earnings
AEHR stock plunged in late trade. Aehr Test Systems narrowly topped fiscal Q1 views, but didn’t raise full-year guidance. Aehr Test Systems (AEHR) makes test gear for silicon carbide chips used in EVs. AEHR stock fell 2.1% to 44.06, modestly below the 50-day line. Shares have a 53.05 buy point from an awkward cup with handle.
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Stock Market Rally
The stock market rally attempt saw the major indexes rebound from significant intraday losses to close down a bit.
The Dow Jones Industrial Average was virtually flat, down 0.03% in Thursday’s stock market trading. The S&P 500 index and Nasdaq composite fell 0.1%. The small-cap Russell 2000 edged up 0.1%
Thursday marked an inside day to Wednesday’s inside day for the Nasdaq and S&P 500.
Healthy-looking stocks are relatively scarce, with a heavy tech bent.
Thursday marked day seven of the Nasdaq’s market rally attempt. So it could stage a follow-through day at any time. The S&P 500 and Dow Jones are only on day two of their rally attempts after undercutting late September lows this week.
U.S. crude oil prices slumped 2.3% to $82.31 a barrel, extending a recent slide amid demand fears. Gasoline futures dipped 0.4% after plunging Wednesday to a 2023 low. Copper fell 1% to an 11-month low.
The 10-year Treasury yield dipped 2 basis points to 4.715%, down nearly 9 basis points in the past two days.
Among growth ETFs, the Innovator IBD 50 ETF (FFTY) rose 0.7%. The iShares Expanded Tech-Software Sector ETF (IGV) edged down 0.1%. The VanEck Vectors Semiconductor ETF (SMH) was flat. Nvidia stock is the No. 1 holding in SMH.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) was just above break-even. The ARK Genomics ETF (ARKG) climbed 1.1%. Tesla stock is No. 1 holding across Ark Invest’s ETFs, even as Cathie Wood continues to sell TSLA shares.
SPDR S&P Metals & Mining ETF (XME) dipped 0.1%. U.S. Global Jets ETF (JETS) descended 0.2%. SPDR S&P Homebuilders ETF (XHB) stepped down 0.6%. The Energy Select SPDR ETF (XLE) and Industrial Select Sector SPDR Fund (XLI) also fell 0.6%.
The Health Care Select Sector SPDR Fund (XLV) climbed 0.55%. LLY stock and Vertex are XLV members.
The Financial Select SPDR ETF (XLF) rose 0.5%.
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Tesla Slashes U.S. Prices
Late Thursday, Tesla cut Model 3 and Model Y prices. It cut the base Model 3 RWD price by $1,250 to $38,990, the Model 3 LR by $1,250 to $45,990 and the Model 3 Performance by $2,250 to $53,240. The EV giant cut the Model Y LR by $2,000 to $48,490 and the Model Y Performance by $2,000 to $52,490.
Tesla had been offering substantial discounts on inventory vehicles. Still, the latest official price cuts reflected continued Tesla demand concerns and pressure on profit margins.
On Monday night, Tesla launched a new cheaper Model Y. The Model Y RWD starts at $43,990, which was $3,750 cheaper than a prior base Y that is no longer available.
On Monday morning, Tesla reported a larger-than-expected decline in third-quarter deliveries.
TSLA stock fell more than 1% in premarket trade Friday.
Bulls have shrugged off a series of bad news this week, pinning their hopes on an updated Model 3 out side the U.S. the upcoming Cybertruck and speculative bets on self-driving, robots and more.
Tesla stock flashed an aggressive buy signal Wednesday, jumping 5.9% and moving decisively above the 50-day line in higher volume. Shares are right around another early entry from a downtrend in the handle. TSLA stock has an official 278.98 buy point from a cup-with-handle base.
Shares held their ground Thursday, just edging down 0.45% to 259.98
Nvidia stock rose 1.5% to 446.88, just below the 50-day line but above the 10-week line. Volume has been light on the rebound, though it was generally light during September’s retreat. A strong move above the 50-day line would offer an early entry for NVDA stock. At the end of the week, shares will have a new base with a 502.66 buy point.
The RS line, the blue line in the charts provided, is not far from highs after a huge run for most of the year.
Meta stock edged down 0.3% to 304.79 after once again testing the 50-day line, where it’s been trading tightly for several weeks. Meta now has a tiny handle on its cup base, giving it a new official buy point of 310.94, according to a daily MarketSmith chart. Investors may prefer to wait for Meta to clear 312.87.
The RS line has been hitting highs. Doing so before a breakout is especially bullish.
ANET stock tested its 50-day line, then reversed higher, closing up 1.1% to 188.03. Volume was light though. Arista stock should have a flat base after Friday with a 198.70 buy point. Investors could use Monday’s high of 189.90 as an early entry for the networking giant. The RS line for ANET stock is right at record highs.
QLYS stock rose 2 cents to 154.78. One of several cybersecurity firms with strong RS lines, Qualys has a 157.88 buy point from a de facto flat base next to the top of huge consolidation. Shares have rallied this week from their 10-week line. Qualys stock is trying to clear resistance just above 155.
Eli Lilly Stock
Eli Lilly stock climbed 1.9% to 541.48, regaining the 50-day line, though on light volume. Shares fell below the 50-day in heavy volume on Tuesday. Investors could use a decisive move above the 50-day line, perhaps the 21-day, as a buying opportunity.
The RS line has fallen somewhat in recent weeks amid LLY stock’s pullback, but it isn’t far from highs.
VRTX stock edged up 0.6% to 355.14 on Thursday after bouncing back above the 50-day line on Wednesday. The biotech giant has a 367 flat-base buy point. Investors could use 358.59 or a downward-sloping trendline for an early entry.
The RS line for Vertex stock is at consolidation highs, not far from longer-term bests.
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What To Do Now
The market rally attempt showed some fight on Thursday, coming well off lows. But until the market shows real strength, investors should be nearly or entirely in cash.
A follow-through day could come soon, but it wouldn’t take much for the indexes to break lower again. Investors need “patient attention” now.
So stay engaged and work on your watchlists. Some stocks may be close to being ready, but others may need some repair work even with decent relative strength.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
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