Dow Jones futures tilted lower late Monday, along with S&P 500 futures and Nasdaq futures. Coupa Software (COUP) and Stitch Fix (SFIX) headlined earnings after the close, while Tesla stock and Chinese electric-car makers Nio (NIO), Xpeng Motors (XPEV), Li Auto (LI) and BYD Co. (BYDDF) will be in focus Tuesday morning.
The stock market rally had a mixed session Monday, a welcome pause after some recent strong gains, especially for the Nasdaq composite and many leaders. Apple (AAPL) continued to advance, along with several other big-cap techs. Hopes for a stimulus deal continue to support the stock market rally, though it’s unclear how close lawmakers are to an accord, or when that might come.
Coupa Software earnings and Stitch Fix earnings were much better than expected. COUP stock rose past a new buy point. Stitch Fix stock skyrocketed, rebounding bullishly from its 10-week line.
Nio stock, Li Auto, Xpeng Motors and BYD generally found support Monday near a key level after the Chinese EV stocks sold off last week. Nio stock is close to an aggressive entry. Industrywide data on Chinese electric-car sales are due Tuesday morning, but the star of the show will likely be Tesla (TSLA).
Tesla stock rose to a new high Monday, still rallying on the upcoming S&P 500 inclusion and optimism about November sales in China. Nio, Xpeng, Li Auto and BYD have all reported November deliveries. Tesla does not disclose monthly figures, so the trade group data will offer key insight.
Tesla stock is on IBD Leaderboard. So is Apple stock.
Dow Jones Futures Today
Dow Jones futures fell 0.3% vs. fair value. S&P 500 futures lost 0.35% and Nasdaq 100 futures retreated 0.3%.
Coronavirus cases worldwide reached 67.93 million. Covid-19 deaths topped 1.55 million.
Coronavirus cases in the U.S. have hit 15.36 million, with deaths above 290,000. With the U.S. adding more than 1 million cases a week and daily deaths at record highs, government restrictions are stepping up, especially in California.
The U.K. will start giving doses of the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine on Tuesday. An FDA advisory panel will review the Pfizer/BioNTech vaccinations on Thursday, with full FDA approval and U.S. vaccinations expected to quickly follow.
Stock Market Rally
U.S. Stock Market Today Overview
Last Update: 4:04 PM ET 12/7/2020
The stock market rally had a relatively quiet start to the week. The Dow Jones Industrial Average fell 0.5% in Monday’s stock market trading. The S&P 500 index dipped 0.2%. The Nasdaq composite rallied 0.45%, led by big caps Apple, Facebook (FB), Adobe (ADBE), Netflix (NFLX) and Tesla stock.
Apple stock rose 1.2% to 123.75 on Monday, above a pair of early buying opportunities and close to a 125.49 entry.
The Nasdaq composite is 5.7% above the 10-week line. That’s not extended, but it’s not far from being so. Along with high bullish sentiment readings, some highly extended IPOs and other growth names, including Xpeng and Li Auto stock, raise concerns about a pullback for the major indexes and leading stocks.
If you’re already on margin, you might be cautious about adding much net exposure. But aside from cutting losses or taking partial profits in extended leaders, there’s no reason for significant selling. But it’s time to be alert, flexible and decisive.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Coupa Software Earnings
Coupa Software earnings fell 10% to 18 cents a share, while revenue swelled 31% to $132.96 million. Analysts expected Coupa Software earnings of just 3 cents a share on sales of $124 million
The business expense management software maker reported strong billings and guided up for Q4 revenue, but sees a Q4 loss.
Coupa Software stock rose 4% to 336.50 overnight, just above a just-formed handle buy point of 336.35. Shares rose 1.8% on Monday to 323.94.
Stitch Fix Earnings
Stitch Fix earnings came in at 9 cents a share, up from a 1-cent loss a year earlier and defying fiscal Q1 views for a 15-cent loss. Revenue rose 10% to $490.42 million, also beating.
The online personal shopper also guided higher for fiscal Q2 and full-year revenue.
Stitch Fix stock spiked 34% overnight. Shares edged up 0.8% to 35.83 on Monday, after tumbling 14% last week to their 10-week line. Before that, SFIX stock had run up to a two-year high from an early October breakout.
China EV Stocks
Nio stock rose 4.8% on Monday to 45.11, just below its 21-day exponential moving average. For a swing or aggressive position trade, investors could use 48.10, just above the December upside reversal day, as a buy point
Xpeng stock fell 2.1% to 48.30, finding support at its Dec. 2 low but finishing modestly below its 21-day EMA. That came as the 2020 IPO announced a new offering of 40 million American depositary shares. Fellow 2020 IPO Li Auto stock, which had an offering last week, reversed higher to close up 3.1%, but hit some resistance at its 21-day. All sold off at least 20% last week after huge gains over several weeks.
BYD stock climbed 1%, back above its 21-day line. BYD, a major producer of electric cars, buses and batteries in China, retreated 6.7% last week.
Tesla stock jumped 7.1% to 641.76 on Monday, far extended from a 466 buy point as well as a 502.49 entry. Shares are now up 57% since the announcement that TSLA stock will join the S&P 500 index before the open on Dec. 21. That’s continuing to provide momentum for Tesla stock. Loup Ventures’ Gene Munster said shares could skyrocket to $2,500 within the next three years, giving Tesla a $2 trillion valuation.
Finally, expectations are high for November sales of made-in-China Tesla Model 3 electric cars.
While Tesla stock has run up over the past few weeks, it’s only 11% above its 10-day moving average. While a pullback would be a surprise, TSLA stock is not in imminent danger of a sharp retreat along the lines of last week’s tumble in Nio, Xpeng and Li stock.
Another Model 3 price cut spurred stronger Tesla China sales in October, but the company also exported about 7,000 Model SR+ cars to Europe for the first time. It’s possible there was an order backlog that Tesla filled last month. Also, Tesla is expanding stores in second- or third-tier cities in China — which are often large.
A strong November sales figure would give Tesla a decent shot at reaching its goal of 500,000 deliveries worldwide in 2020.
However, Chinese media report the new made-in-China Model 3 SR+ with LFP battery cells shows substantially weaker range in colder temperatures, far more than would be expected. If true, that would be problematic in much of Europe. But with the first such Model 3 cars being delivered now as winter looms, that should be clear in the next few weeks.
Tesla Expansion In 2021
In early 2021, the Shanghai plant will begin making the Model Y, providing a new growth area. The upcoming Berlin plant will make the Model 3 and Model Y, introducing the latter to Europe. The Austin plant also will be finished by late 2021, likely starting the Model Y, with the Cybertruck and Semi following.
The Mach-E, VW ID.4 and the already-released Nio EC6 are among the competitors for the Tesla Model Y, among several others, especially in Europe. The made-in-China Model 3 competes with the Xpeng P7 and the BYD Han EV, with at least one Nio sedan due in early 2021.
While the electric-vehicles market is rising rapidly in Europe and China, EV supply may outpace demand as Tesla, legacy automakers and EV startups ramp up production.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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