Market Risks Rise, Palantir Implodes; Biden’s interview is broadcast

Dow Jones futures will open Sunday evening, along with S&P 500 and Nasdaq futures. JPMorgan Chase (JPM) and other banks kick off earnings season this coming week.

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The banking giants kick off earnings season next week

The stock market rally last week saw the S&P 500 and the Nasdaq hit new highs, although the latter is still widening. On the upside, small caps pulled back below a key level.

However, more stocks flashed buy signals. Meta Platforms (META), Palantir Technologies (PLTR) and ASML (ASML) are in buying zones. Meanwhile, Tesla (TSLA) took off. Nvidia ( NVDA ) had a modest weekly gain, continuing to perform well after pulling back from record highs.

Biden’s interview is broadcast

President Biden’s interview with ABC News’ George Stephanopoulos, which aired Friday night, came as his re-election bid took a hit after his disastrous June 27 debate with Donald Trump.

In the interview, Biden said the debate was a “bad episode” but there was “no indication of any serious condition.”

The general consensus was that Biden did better in the interview than in the debate, but he didn’t really care either.

Biden insisted he will not drop out.

As of early Saturday, Vice President Kamala Harris had a 44% chance of being the Democratic nominee, against. 41% for Biden, according to PredictIt.

The political drama could have a major impact on the market, with some sectors already affected.

Earnings, Powell, Inflation ahead

JPMorgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C) report earnings on Friday. All are close to points of purchase or early access.

Fed chief Jerome Powell will testify before Congress on Tuesday and Wednesday.

The June CPI inflation report is due on Thursday, following the soft jobs report on June 5. CPI inflation data is due on Friday.

Shares of Nvidia and ASML are on IBD’s leaderboard. Meta Stock is on SwingTrader. Shares of Nvidia, Palantir and Citigroup are in the IBD 50. Shares of Palantir are in the IBD Big Cap 20.

Dow Jones Futures Today

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

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

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Stock market rally

The growth of the stock market showed positive action against the main indices. The Dow Jones Industrial Average rose 0.7% in last week’s trading on the stock market. The S&P 500 index fell by 1.95%. The Nasdaq composite jumped 3.5%.

However, the small-cap Russell 2000 sank 1%, sinking below the 50-day mark.

The Invesco S&P 500 Equal Weight ETF ( RSP ) fell 0.4% to 163.38, falling further below its 50-day line.

In contrast, the First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) climbed 1.6% to a record high. This reflects strength in growth stocks, especially tech growth names, beyond megacaps. That significantly delayed the Nasdaq 100’s 3.6% gain.

The Nasdaq is now 8.3% above its 50-day line, widening further. That’s how the tech index expanded on June 17, setting the stage for two weeks of sideways action. The chances of a pause or withdrawal are raised again. It doesn’t have to happen immediately and it doesn’t have to be that big, but these risks are growing.

The 10-year Treasury yield fell seven basis points to 4.27% after rising to 4.49% earlier in the week.

U.S. crude futures rose 2% to $83.16 a barrel for the week, up 10.1% in the past four weeks.

Copper futures rose 6.1% for the week. Gold prices increased by 2.6%, while silver by 7.4%.

Bitcoin fell 10.7% to $56,458.26 but recovered from a multi-month low of $53,700 early Friday.

ETFs

Among growth ETFs, the Innovator IBD 50 ETF ( FFTY ) rose 1.4% last week. The iShares Expanded Tech-Software ETF ( IGV ) climbed 2.3% to just below its recent high of 2021. PLTR shares are members. The VanEck Vectors Semiconductor ETF ( SMH ) rose 3.5%. Nvidia stock is SMH’s biggest holding by far, while ASML is also a key component.

Reflecting the more speculative stocks, the ARK Innovation ETF ( ARKK ) rose 4.55% last week and the ARK Genomics ETF ( ARKG ) fell 1.1%. Tesla shares are No. 1 holding in all Ark Invest ETFs.

The SPDR S&P Metals & Mining ETF ( XME ) rose 3.25% last week, supported by gains in metals and coal prices. Financial Choice SPDR ETF (XLF) rose 1%. Shares of JPMorgan, Citigroup and Wells Fargo are all large members.

But there were weaknesses elsewhere.

The Global X US Infrastructure Development ETF ( PAVE ) fell 1.1%. The US Global Jets ETF (JETS) dropped 2.6%. The SPDR S&P Homebuilders ETF ( XHB ) slipped 3.1%. The Energy Select SPDR ETF (XLE) retreated 1.15% and the Healthcare Select Sector Fund SPDR (XLV) lost 0.9%. The Select Industrial Sector SPDR Fund ( XLI ) fell 0.5%.

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Stock Tesla

Tesla shares skyrocketed 27.1% to 251.52 for the week, breaking above the 200-day line and well beyond. Second quarter shipments fell vs. a year ago, but beat low expectations.

Shares are now well extended from the 191.08 handle buy point. TSLA stock is in a long-term trend that returns to an all-time high at the end of 2021. Ideally, Tesla would stop for a while.

Tesla’s earnings are due on July 17, with a robotaxi event planned for August. 8.

Nvidia

Shares of Nvidia rose 1.85% to 125.83 for the week, breaking away from a 21-day line. An aggressive investor could have used Wednesday’s action as a place to add a few more stocks. But NVDA stock could use a longer pause.

Nvidia’s earnings aren’t due until mid-August. However, Semiconductor manufacturing in Taiwan (TSM), which makes chips for Nvidia and many others, reports June sales on Wednesday and second-quarter earnings on July 18.

Meta Stock

Meta stock jumped 7.1% to 539.91, mostly on Friday, moving above buy points at 514.01 or 522.08. Meta earnings are due on July 31st.

Stock Palantir

Shares of Palantir rose 7.5% to 27.23, clearing a buy point at 26.57 on Friday, marking its best close since late 2021. The broad, bearish four-month consolidation can be seen as a glove of big for a big base. While viable, PLTR stock is 18.7% above its 50-day line. The stock is prone to large up and down movements.

Palantir’s earnings are in early August.

ASML stock

Shares of ASML rose 5.1% for the week to 1,074.48, recovering from the 21-day line and returning above a buy point of 1,056.34. ASML earnings are due on July 17th.

What should you do now?

The combination of the Nasdaq rallying while the small-cap, mid-cap and equal-weight S&P 500 ETFs are losing sight of their 50-day lines is not ideal.

However, most major stocks are doing well, with a steady decline in new buying opportunities in recent days.

If you’ve made some new purchases recently, they’re probably working. But be ready if the market pulls back or turns again.

While there are yellow flags to make new purchases, the broader uptrend is intact. Investors should have substantial to heavy exposure.

Definitely check your watch lists and review your portfolio.

It’s time to pay attention to earnings season. JPMorgan, Citigroup and Wells Fargo, along with Delta Air Liness ( DAL ), is expected this coming week, with results for other companies rising afterward.

Read the Big Picture daily to stay in sync with market direction and key stocks and sectors.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

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