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Dow Jones Futures: Don’t Fuel the Bear Market; BYD vs. Tesla supplies

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Dow Jones futures open on Sunday evening, as well as S&P 500 futures and Nasdaq futures. A newly confirmed stock market rally quickly turned under pressure last week with major indices selling off despite a rebound on Friday afternoon.




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Tesla (TSLA) and China BYD (BYDDF) is due to release weekend sales data after strong shipments in June from Lee Auto (LI), Nio (NIO) and Xpeng (XPEV).

Don’t feed a bear market. This is not the best time for new purchases; investors should have little or no exposure to risk. Instead, get ready for the next bull run.

Northrop Grumman (NOC), McKesson (MKK), senten (CNC), AstraZeneca (manat) and Shockwave Medical (SWAV) hold up quite well. They all have relative strength lines at 52-week highs or consolidation highs.

BYD stock is also worth keeping an eye on as it trades right near the buy point. Tesla shares are close to 2022 lows.

NOC shares are on the IBD leaderboard. Shares of Li Auto, Centene, McKesson and AZN are listed on IBD 50. Shares of CNC and McKesson are also listed on IBD Big Cap 20.

The video embedded in this article focuses on BYD, AstraZeneca and Privia Health Group (PRVA).

Dow Jones futures today

Dow Jones futures open at 6:00 pm ET Sunday, along with S&P 500 and Nasdaq 100 futures.

US stock exchanges will be closed on Monday for Independence Day, but other markets around the world will be open. Dow Jones futures will trade as usual on Monday.

Remember that overnight action in Dow futures and elsewhere does not necessarily translate into real trading in the next regular stock market session.


Join IBD experts as they analyze valuable stocks in the stock market rally in IBD Live.


stock market rally

The stock market rally again took solid or sharp losses, and Friday’s rally only offset the weekly decline.

The Dow Jones Industrial Average fell 1.3% in stock trading last week. The S&P 500 lost 2.2%. The Nasdaq Composite Index fell 4.1%. Small-cap Russell 2000 shares fell 2.1%.

The 10-year Treasury yield fell 24 basis points to 2.89%, falling below 3%.

U.S. crude oil futures rose 0.8% to $108.43 a barrel last week, boosted by a 2.5% gain on Friday. Gasoline futures rose on Friday but fell over the week.

Among the top ETFs, the Innovator IBD 50 ETF (FFTY) fell 1.1% last week, while the Innovator IBD Breakout Opportunities (BOUT) ETF rose 0.25%. iShares Advanced Technology & Software ETF (IGV) fell 5.3%. The VanEck Vectors Semiconductor (SMH) ETF fell 9.3%. Micron Technologies (MU) warning, after reports of Intel (INTC) cut the price of PC chips, which led to a sharp drop in semiconductor stocks.

The SPDR S&P Metals & Mining ETF (XME) plunged 5.4% last week. The Global X US Infrastructure Development ETF (PAVE) fell 1.8%. The US Global Jets ETF (JETS) fell 3.4%. The SPDR S&P Homebuilders ETF (XHB) rose 0.5% on Friday’s strong bounce. The Energy Select SPDR (XLE) ETF was up 1.4%, while the Financial Select SPDR (XLF) ETF was down 1.4%. The Health Care Select Sector SPDR Fund (XLV) rose 0.4%.

Reflecting more speculative stocks, shares in the ARK Innovation ETF (ARKK) fell 10.1% last week, while the ARK Genomics ETF (ARKG) fell 5.3%. TSLA remains the leading holding among Ark Invest ETFs. Ark Cathy Wood also has small stakes in BYD, Xpeng and Nio.


Top 5 Chinese stocks to watch now


Tesla supplies

Tesla is likely to release production and shipments data for the second quarter on Saturday. Analysts polled by FactSet on average expect Tesla to deliver 265,000 vehicles in the second quarter. That would be a big drop from Tesla’s record first-quarter deliveries of 310,048 electric vehicles.

Tesla Shanghai was closed for most of April and only resumed full capacity in early June. Tesla’s recently opened factories in Berlin and Austin are making relatively few cars, due in part to supply chain issues.

Tesla shares fell 7.5% to 681.79 last week after running into resistance at its 10-week line on Monday. The stock is near its May 24 low of 620.57. TSLA shares peaked in early November at 1243.49.


Tesla vs. BYD: Which electric car giant is the best buy?


BID Sales

The EV and battery giant is set to top 100,000 EV and plug-in hybrid sales for the fourth straight month. They are likely to surpass the May record of 114,943 vehicles, with second-quarter sales topping 320,000 units.

This would mean that BYD would overtake Tesla in vehicle sales, although BYD would still lag behind its rival in delivering only electric vehicles.

BYD shares climbed 39.81 buying points off a deep cup-and-handle base for the week to close up 1.2% to hit 39.97 for the week. BYDDF is still up 17% from its 50-day milestone. A tall handle or a short, shallow base is ideal.

Chinese electric vehicle start-ups

On Friday, Nio reported record shipments in June, while Xpeng and Li Auto had their best month since December. With Covid lockdowns in the past and EV subsidies on the rise, all three startups should see significant growth in the second half of the year as they roll out new models.

Shares of Li Auto fell 1.6% to 37.70 on Friday and 7.6% on the week, testing the 37.55 buy point. LI shares have deviated strongly from the moving averages, so the entry has always been very risky. The ideal would be a new shallow base next to a deep consolidation.

Shares of Nio and Xpeng sold off 11.3% and 14.2% respectively last week, retreating from their 200-day lines after rising for several weeks.

BYD and Tesla should also see increased production and demand in China in the coming months with capacity expansion. BYD will also release several models in the coming months, including the Seal sedan, a Model 3 competitor.

Promotions to view

Shares of Northrop rose 4.9% last week to 486.37, rebounding from the 50-day line. The stock also rose above the old 477.36 buy point, which is technically no longer valid. But there has been a lot of trading around this level in recent months. In another week, NOC shares could have a flat base.

Shares of McKesson rose 2.5% to 329.53 last week, trading just above the 50-day line. MCK shares have a fixed buy point of 340.04. But investors can use the move above Friday’s high of 330.16 as an early entry.

Shares of Centene rose 3.9% to 86.21 last week. This week, the stock faced resistance at the 87.44 double bottom buy point. But a pause in the current market can be helpful. It is possible that in a few days, CNC shares will form a handle, slightly lowering the official price to 87.08.

Shares of AstraZeneca are also facing resistance near a double-bottom buy base point, retreating after just breaking entry at 67.50 on Wednesday, according to MarketSmith analysis. AZN shares fell 1.4% to 65.95 last week but found support on the 50-day line on Friday.

Shares of Shockwave rose 0.5% last week to 198.62, consolidating after a 25% gain last week. This big move pushed SWAV shares above the dirty buy base point of 194.41 cups and handles. Investors could use 203.03 to enter, just above Tuesday’s high. This could be an alternate descriptor after Tuesday.

Market Rally Analysis

Once again, the recently confirmed stock market rally quickly led to problems. On Monday, the Nasdaq Composite Index ran into resistance at the 10-week moving average and reversed.

The Nasdaq and S&P 500 closed below their subsequent day lows on June 24 on Tuesday, a bearish signal that their rallies are likely to fizzle out eventually. Dow Jones followed suit on Thursday.

The major indexes fell significantly over the week, despite a reversal up with little volume on Friday.

The market rally is not technically completed, but is under pressure.

Macroeconomic conditions are deteriorating. The Atlanta Fed’s Q2 GDP tracker fell to -2.1% on Friday from -1% on Thursday and 0.3% on Wednesday. JPMorgan cut its growth forecasts, saying the US is “dangerously close” to a recession.

Consumer spending is slowing and inflation-adjusted spending is falling. Manufacturing activity is still growing, but at a slower pace, but the ISM new orders sub-index turned negative in June.

Companies are just beginning to realize the negative impact, with warnings from Micron Right side (on right), General Motors (GM) and Nike (NKE) for the last week. This will likely continue into the reporting season over the next few weeks.

Of course, while investors should be aware of major economic and business trends, you should focus on what the market is doing right now. Right now, the market is in a major downtrend going back to early 2022 or the end of last year. The latest rally seems to be headed for a fast exit.

Medical stocks are showing strength, although they could lose ground if the bear market goes down again. Defense stocks are rising again, with several more players joining Northrop.

BYD and Li Auto look interesting, but they could use an extended breather. Most automotive stocks, including Tesla, are at a disadvantage.


Market Time with IBD ETF Market Strategy


What to do now

Now is not the best time to invest. If you are buying stocks in sustainable areas such as medical or defense, be prepared to make at least partial profits quickly. A down, volatile market can quickly wipe out decent profits.

Instead of trying to pick a rare winner in a bear market, investors should be looking for big winners in the next sustained uptrend.

Build your watchlists and research up-and-coming companies.

Read The Big Picture every day to stay up to date on market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson to update the stock market and much more.

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