Dow Jones futures rose on Monday morning, looking to add to Friday’s strong stock market gains ahead of a week of high-powered earnings reports. Tesla stock slipped more than 2% after cutting Model 3 and Model Y prices in China by up to 9%.
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On Monday, the Purchasing Managers’ Index (PMI) for the manufacturing and service industries will be released at 9:45 am ET. The manufacturing index is expected at 51.2, while the services index is expected to remain a contraction at 49.3, according to Econoday estimates.
Stock Market Today: Q3 Earnings Season Rolls Out
Another round of eye-popping third-quarter earnings results is expected this week, with key reports from Dow Jones stocks Apple (AAPL), Boeing (BA), Chevron (CVX), Merck (MRK), Microsoft (MSFT) and Visa (V), among others. Tech giants Alphabet (GOOGL) and Meta Platforms (META) will also report.
giant shipping FedEx (FDX) fell 1% Monday morning after Wells Fargo downgraded the stock from overweight to equal-weight with a lowered price target of 160.
EV giant Tesla (TSLA) skidded more than 2%, while Dow Jones tech leaders Apple and Microsoft moved higher ahead of the stock market open today. Software is heavy Service Today (NOW) led the Dow in early trading, rising nearly 3% after Guggenheim upgraded the stock to buy.
AutoZone (AZO), Cardinal Health (CAH), Molina Healthcare (MOH) and Texas Roadhouse (TXRH) — as well as Dow Jones stocks Chevron and Merck — are among the top stocks to watch. Remember that the new stock market rally is the perfect time for investors to practice their watchlists, and to hone their pyramiding technique.
Young rallies, especially those fighting bear markets, often fail. Pyramiding provides a means of moving into new stock positions gradually, to reduce capital risk.
Cardinal and Texas Roadhouse are IBD Leaderboard stocks. Merck and Molina Healthcare were featured in last week’s Stocks Near A Buy Zone column, along with two other top stock ideas. AutoZone has been the IBD Stock Of The Day for the past few weeks.
Dow Jones Today: Treasury Yields, Oil Prices
Before Monday’s opening bell, Dow Jones futures rose 0.85%, while S&P 500 futures rose 0.8%. Nasdaq 100 futures advanced 0.6% in morning action.
Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded up 0.5%, and the SPDR S&P 500 ETF (SPY) rose 0.8%.
China’s Hang Seng Index fell 6.4% on Monday, closing at its lowest level since April 29, 2009. Chinese leader Xi Jinping has continued to consolidate his power, appointing some supporters to party’s most powerful decision-making body after securing a convention-defying convention. third term.
Meanwhile, markets in the UK and Europe ran higher, drawing on US optimism on Friday towards a possible change in mood by the Federal Reserve. Frankfurt’s DAX and the CAC-40 in Paris traded more than 1.5% higher by midday.
The 10-year Treasury yield was hesitant on Monday morning, falling to 4.17% after Friday’s drop to 4.21%. Last week, the 10-year Treasury yield settled at its highest level since June 2008.
US oil prices fell more than 1% on Monday, snapping after a three-day winning streak. West Texas Intermediate futures traded near $84 a barrel.
A New Stock Market Rally Begins
On Friday, the Dow Jones Industrial Average closed up 2.5%, while the Nasdaq composite gained 2.3% for the day and ended the week up 5.2%. The S&P 500 gained 2.4% and is up nearly 4.8% for the week.
Friday’s The Big Picture commented, “Since this is likely to be a bear market rally, risk remains high. This is not the time to aggressively jump back into stocks with both feet, but to make a measured strategy. Exposure should be limited to a maximum of 20% for most investors. Aggressive investors should stay below 40% exposure until the market starts to prove itself.”
Now is an important time to read IBD’s The Big Picture column. Following Friday’s gains, investors will want to put their curated watch lists to work, to anticipate future breakouts. But not all follow-throughs work, so it’s important to raise exposure slowly and methodically, as the new uptrend proves itself.
Check out IBD Stock Lists, like the IBD 50 and Stocks Near A Buy Zone, for stock ideas.
Five Dow Jones Stocks to Watch Today
Dow Jones Stocks to Watch: Chevron, Merck
Energy giant Chevron moved above an early entry at 166.93 last week and is approaching a 182.50 buy point ahead of the company’s earnings release on Friday. Chevron shares were down 0.5% on Monday morning, falling on oil prices.
CVX stock boasts a strong 98 out of a perfect 99 IBD Composite Rating, according to IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.
Dow Jones member and IBD 50 stock Merck is in buy range above the 93.12 buy point of its double bottom, according to IBD MarketSmith pattern recognition, following Friday’s 2.9% advance. The 5% buy area reached 97.78. The stock’s relative strength line has hit a new high in recent sessions, which is a positive sign. Third quarter earnings results are due Thursday before the opening bell.
Shares of Merck climbed 0.8% Monday morning.
4 Top Growth Stocks To Watch In Current Stock Market Rally
Top Stocks to Watch: AutoZone, Cardinal, Molina, Texas Roadhouse
Auto parts leader and recent IBD Stock Of The Day AutoZone is closing at 2,362.34 buy points a cup base. Watch out for a potential handle to offer a lower entry. AutoZone shares were inactive early Monday.
IBD Leaderboard stock Cardinal Health is in buy range beyond a short cup with a 71.22 handle entry, according to IBD MarketSmith’s chart analysis. Shares also crossed the 72.38 point buy flat base. CAH stock gained 0.5% early Monday.
Molina Healthcare closed Friday just below the 361.35 point buy flat base. The stock’s RS line hit a new high in recent weeks, indicating that the healthcare stock is a leader to watch. Now look for a strong breakout to confirm the stock’s institutional support. Molina’s earnings are expected on Wednesday. MOH stock was unchanged Monday morning.
Texas Roadhouse is trying to reclaim the 95.52 buy point of a flat base after a brief breakout move last week. Shares ended Friday just below the entry. The earnings are due to be released on Thursday. TXRH stock was unchanged on Monday.
Join IBD experts as they analyze the top stocks in the current stock market rally on IBD Live
Tesla Stock
Tesla stock climbed 3.45% on Friday, rebounding from Thursday’s new 52-week low. Shares are about 48% off their 52-week highs.
Tesla stock slipped more than 2% Monday morning after cutting prices for its Model 3 and Model Y vehicles by up to 9% in China.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rallied 2.7% on Friday and are about 19% off their 52-week high. Despite a recent rally, the stock remains below its 50- and 200-day lines. Apple’s earnings are Thursday after the close. AAPL stock climbed 0.2% Monday morning.
Microsoft rose 2.5% on Friday, ending a two-day skid. Shares are still in rebound mode after hitting a 52-week low on October 13. The software giant remains about 31% off its 52-week high. Microsoft’s earnings are due late Tuesday. Shares climbed 1.1% on Monday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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