Dow Jones futures will open Sunday night, together with S&P 500 futures and Nasdaq futures. The main indexes fell solidly previously week, capping a horrible September. The S&P 500 index and Dow Jones are at bear market lows, with the Nasdaq on the verge of doing so. Treasury yields backed off from 4%, however prolonged their weekly win streak.
Investors needs to be extraordinarily cautious within the present setting, because the bear market seems to be beginning a 3rd leg down.
Tesla AI Day: Optimus Robot Not-Yet Prime
Tesla (TSLA) is in focus over the weekend. Friday evening, Tesla unveiled a prototype of the Optimus robotic, displaying limb motion and arms that may grasp. But it is unable to stroll but, indicating that Tesla Optimus is a few years behind what different robotics corporations can do. Tesla hung out discussing the Optimus mechanics and software program.
CEO Elon Musk has stated Optimus may ultimately change manufacturing unit staff. Many consultants say a helpful, general-purpose humanoid robotic is many years away from actuality.
AI Day, which Musk stated is primarily about recruiting employees, additionally confirmed off options associated to driver-assist software program and extra. Tesla’s Full Self-Driving system, regardless of its title, is a Level 2 driver-assist system.
On Saturday or Sunday, the EV big will seemingly launch third-quarter manufacturing and supply knowledge. Tesla deliveries will hit a document simply, however there are issues about China demand.
Li Auto (LI) early Saturday native time reported September deliveries that have been solidly higher than its just lately lowered forecast. Fellow Tesla rivals Nio (NIO), and Xpeng (XPEV) will report September deliveries on Saturday as effectively.
EV and battery big BYD (BYDDF) will launch gross sales within the subsequent few days as effectively. BYD and Nio are main a China EV push into Europe. That’s simply a part of a large worldwide enlargement for BYD.
Nio stock, BYD, Li Auto and Xpeng all are struggling. Tesla stock appears to be like higher, however has hit resistance at its 50-day and 200-day shifting averages.
Along with Tesla stock, Arista Networks (ANET), Enphase Energy (ENPH), On Semiconductor (ON) and Celsius Holdings (CELH) all have relative power traces at or close to highs, however with the shares buying and selling beneath their 50-day traces. But, there may be an upside to that technical flaw.
The video embedded within the article mentioned the bear market motion in depth, whereas additionally analyzing Arista Networks, Wolfspeed (WOLF) and Tesla stock.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, together with S&P 500 futures and Nasdaq 100 futures.
Remember that in a single day motion in Dow futures and elsewhere does not essentially translate into precise buying and selling within the subsequent common stock market session.
Stock Market Last Week
The main indexes tried to bounce at varied factors this previous week, however finally fell solidly for the week, proper at bear market lows.
The Dow Jones Industrial Average skidded 2.9% in final week’s stock market buying and selling. The S&P 500 index additionally retreated 2.9%. The Nasdaq composite misplaced 2.7%. The small-cap Russell 2000 gave up 1.4%. For September, the Dow misplaced 8.8%, the S&P 500 9.3%, the Nasdaq 10.5% and the Russell 2000 10.1%.
The 10-year Treasury yield rose 11 foundation factors previously week to three.81%. The yield backed off after topping 4% early Wednesday morning, however rebounded from Friday’s lows. The 10-year Treasury yield has risen for 9 straight weeks.
U.S. crude oil futures rose 1% to $79.49 a barrel previously week, even with Friday’s 2.1% loss.
Among the perfect ETFs, the Innovator IBD 50 ETF (FFTY) rose 1.45% final week, whereas the Innovator IBD Breakout Opportunities ETF (BOUT) fell 1.3%. The iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.7%. The VanEck Vectors Semiconductor ETF (SMH) slumped 3.8%.
SPDR S&P Metals & Mining ETF (XME) rose 2.2% final week. The Global X U.S. Infrastructure Development ETF (PAVE) dipped 0.9%. U.S. Global Jets ETF (JETS) descended 2.9%. SPDR S&P Homebuilders ETF (XHB) gave up 1.2%. The Energy Select SPDR ETF (XLE) rose 2.2% whereas the Financial Select SPDR ETF (XLF) declined 2.2%. The Health Care Select Sector SPDR Fund (XLV) gave up 1.3%.
Reflecting more-speculative story shares, ARK Innovation ETF (ARKK) dipped 0.3% final week, closing close to weekly lows. ARK Genomics ETF (ARKG) rose 2.2%. TSLA stock stays a prime holding throughout Ark Invest’s ETFs. Cathie Wood’s Ark additionally owns some BYD stock.
Five Best Chinese Stocks To Watch Now
China EV Sales
Li Auto reported September deliveries of 11,531. Li Auto had warned just lately, signaling that September deliveries can be about 10,500.
In its first full month, L9 SUV hybrid deliveries jumped to 10,123. The soon-to-end Li One accounted for the remaining. The L8, a scaled-down L9, will start deliveries in November. Li Auto on Sept. 30 additionally started presales of one other hybrid SUV, the L7.
Nio now has three new EVs launched in 2022, the posh ET7, the ES7 SUV and the ET5 sedan. The ET5, a Model 3 rival, simply started deliveries on Sept. 30. With new fashions and a Europe enlargement, Nio expects document deliveries in each month of the fourth quarter.
Xpeng is struggling a bit with less-than-fresh lineup. Its G9 SUV will start deliveries in This autumn.
BYD will seemingly report one more month of document gross sales, with Q3 deliveries effectively above 500,000. That will improve its lead over Tesla, although BYD’s gross sales are roughly cut up between full-electric “BEVs” and plug-in hybrids. BYD has entered Australia, New Zealand, Singapore and India previously a number of weeks, with deliveries beginning Europe and a number of other new Asian nations within the subsequent few months. The automaker additionally retains including new fashions, starting deliveries of the Model 3 rival Seal in late August.
China EV Stocks
Nio stock fell 10.6% this previous week to fifteen.77, hitting a four-month low after hitting resistance on the 200-day line on Sept. 30. LI stock, an enormous winner from early May to late June, has plunged to four-month lows as effectively, down 8% final week. XPEV stock misplaced 12.8% final week to recent document lows.
BYD stock has struggled ever since Warren Buffett’s Berkshire Hathaway (BRKB) offered a sliver of its longtime holdings. BYDDF sank 6.25% previously week, hitting six-month lows.
Tesla Vs. BYD: Which EV Giant Is The Better Buy?
After Friday evening’s AI Day that will or could not have huge information, Tesla will seemingly launch Q3 supply figures over the weekend. Analysts anticipate to see someplace round 355,000-365,000 automobiles. That would simply be a document and a giant achieve from the shutdown-hit Q2.
But it is a comparatively modest improve from the tip of 2021, provided that Tesla has added two new crops in Berlin and Austin and ramped up capability at its big Shanghai facility.
There are indicators of weaker China demand, or a minimum of demand not maintaining with a newly expanded Shanghai plant. It’s attainable that Tesla will decrease China automobile costs considerably in October. Keep in thoughts that This autumn manufacturing needs to be a lot larger than in Q3, particularly for the broader Eurasian market, so demand might want to ramp up as effectively.
The China EV market is extremely aggressive, and solely rising extra so.
Tesla stock hit resistance at its 50-day line on Wednesday, tumbling to undercut latest lows Friday. Shares fell 3.7% to 265.25 for the week. TSLA stock’s bottoming base now has a double-bottom sample, with a 313.90 purchase level.
Stocks To Watch
ANET stock is engaged on a base inside an extended consolidation, with a attainable 132.97 purchase level. There’s a trendline entry that is at the moment barely above the 50-day and 200-day traces, however for now it is hitting resistance at a sliding 21-day common. Still, Arista stock rose 2.7% to 112.89 for the week. The RS line is at a document excessive.
ENPH stock dipped 0.7% to 277.47 final week, buying and selling round its fast-rising 50-day line, closing beneath it on Friday. The solar energy chief arguably may have an entry from a decisive transfer above its 50-day and 21-day traces, although an extended pause can be useful.
CELH stock broke exhausting beneath its 50-day line on Sept. 22. The ongoing restoration has been lackluster when it comes to value and quantity, however the power drink maker did climb 2.4% for the week. A decisive transfer above the 50-day line would seemingly coincide with a downward-sloping trendline, providing an early entry in an rising new consolidation.
ON stock additionally decisively broke its 50-day on Sept. 22, and hasn’t made a lot of a bounce since, falling 1.55% final week. The EV-focused chipmaker may have an early entry from reclaiming the 50-day line and a trendline.
All of those shares, together with Tesla, must get again above their 50-day traces. But that is truly a constructive within the present bear market. If Onsemi stock and these others are going to make that cost above key resistance, the general market will seemingly want to indicate some extra power.
There are a couple of shares which can be actionable now, akin to Vertex Pharmaceuticals (VRTX), however that is with none clear indicators of a market backside.
Stock Market Analysis
The bear market did not plunge because it did within the prior two weeks, however the main indexes fell solidly as soon as once more, with a lot of the decline coming Friday. The S&P 500 and Dow Jones have damaged beneath their June lows, doing so once more Friday. The Nasdaq and Russell 2000 have but to undercut their bear market lows, however are getting very shut. The Nasdaq 100 did undercut its June lows on Friday, with Apple (AAPL) and Tesla stock among the many many big-cap drags.
Bulls tried to place up a battle a number of occasions through the week, however rebounds shortly fizzled. Wednesday’s robust good points have been shortly erased the following session.
The Nasdaq tried to bounce once more Friday, rising nearly 1.4% at session highs, earlier than reversing decrease. It’s not a coincidence that Friday’s bounce fizzled because the 10-year Treasury yield erased early losses and reversed larger.
None of the foremost indexes even touched their 10-day shifting averages this previous week, not to mention blasting above more-significant ranges. It’s exhausting to see the market making a critical rebound with Treasury yields trending larger. And yields will seemingly pattern larger so long as the Federal Reserve is elevating charges aggressively.
In addition to the hawkish Fed, rising Treasury yields and hovering greenback, traders should be careful for earnings disappointments amid a really robust enterprise setting. Nike (NKE) and Carnival Corp. (CCL) are simply the most recent examples, with earnings season beginning in simply a few weeks.
Bottom line, the bear market seems to be within the strategy of beginning a 3rd leg down. If so, the following logical help space is likely to be the February 2020 pre-Covid excessive.
Time The Market With IBD’s ETF Market Strategy
What To Do Now
The bear market is correct at lows. Investors needs to be all or almost all in money proper now. If you wish to nibble on some shares flashing purchase alerts, maintain the positions small and be able to take fast income.
Build up your watchlists so you may be prepared to leap into the large winners within the subsequent true bull market. Focus on relative power leaders. Many, akin to Arista Networks, Enphase and Tesla, could also be beneath their 50-day traces.
Read The Big Picture day-after-day to remain in sync with the market route and main shares and sectors.
Please comply with Ed Carson on Twitter at @IBD_ECarson for stock market updates and extra.
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