Dow Jones futures were little changed early Monday, along with S&P 500 futures and Nasdaq futures, while crude oil prices rose on a surprise Saudi Arabia production cut. Apple (AAPL) has a big product reveal today, with Tesla (TSLA) and Palo Alto Networks (PANW) also stocks in focus.
X
With the debt ceiling now raised, the Treasury is set to issue a massive amount of short-term T-bills starting Monday.
Apple will show off its mixed-reality headset today, with one analyst calling the annual WWDC event a “flex the muscles moment” for the Dow tech giant. AAPL stock climbed slightly in premarket trade.
Among other megacap stocks, Microsoft (MSFT), Meta Platforms (META), Google parent Alphabet (GOOGL) and Nvidia (NVDA) edged lower. TSLA stock rose modestly amid strong China sales, after breaking out into a buy zone on Friday.
Meanwhile, PANW stock jumped on news that it will be added to the S&P 500, among many looming changes to the S&P indexes.
Big banks may have to boost capital levels by as much as 20%, The Wall Street Journal reported Monday, one of many steps regulators may take to beef up the banking system. Big bank stocks were modestly active in the premarket.
Immunogen (IMGN) jumped more than 10% in premarket trade after the biotech reported positive results for its ovarian cancer drug in a late-stage trial.
Tesla stock joined IBD Leaderboard on Friday, joining META stock and Palo Alto Networks. Microsoft stock is on IBD Long-Term Leaders. PANW stock is on the IBD Big Cap 20.
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Dow Jones Futures Today
Dow Jones futures rose less than 0.1% vs. fair value and S&P 500 futures nudged higher. Both are being propped up by rising oil and energy issuers, as well as AAPL stock. Nasdaq 100 futures fell less than 0.1%.
At 10 a.m. ET, ISM will release its nonmanufacturing index for May. The services index is expected to edge up 0.1 point to 52. Readings above 50 signal growth.
Remember that premarket action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Oil Rises On Saudi Output Cut
U.S. crude oil prices retested the top of their recent trading range, up nearly 3% to well above $73 a barrel after Saudi Arabia said Sunday that it will unilaterally cut production by one million barrels per day in July. OPEC+ also agreed Sunday to extend current output levels through 2024.
Weaker-than-expected China demand and excess production by Russia have combined with sharp pressure placed on markets by short sellers, pushing crude oil prices toward 52-week lows. OPEC officials had warned short sellers of action ahead of Sunday’s meeting.
Last week, crude oil futures fell 1.3% to $71.74 a barrel as shorts piled in ahead of the meeting, but prices did bounce 2.3% on Friday.
Treasury Issuance
With President Biden signing the debt-ceiling deal, the Treasury Department will now rush to issue new short-term debt. The Treasury could auction off some $170 billion worth of T-bills on Monday. That could roil T-bill rates, though markets were well aware that the sales were coming. Further pent-up Treasury sales will quickly follow. The renewed Treasury issuance will absorb substantial market liquidity, after offsetting much of the Fed’s quantitative tightening in recent months. That could affect stocks.
The 10-year Treasury yield rose to 3.74% after falling 13 basis points to 3.69% last week. T-bill rates, though, were little changed.
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Stock Market Rally
The stock market rally last week showed strong, broad gains, especially Friday.
The Dow Jones Industrial Average leapt 2% in last week’s stock market trading, reclaiming its 50-day line Friday after testing its 200-day line intraday Thursday. The S&P 500 index rose 1.8%, decisively clearing its 2023 range. The Nasdaq composite popped 2%, hitting a 13-month high. The small-cap Russell 2000 jumped 3.3%, roaring back above its 200-day line.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) popped 2.1%. MSFT stock is a major IGV holding. PANW also is a top-10 stock for IGV. The VanEck Vectors Semiconductor ETF (SMH) slipped 0.8%. NVDA stock is a huge SMH component.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) leapt 6.45% last week and ARK Genomics ETF (ARKG) jumped 4.9%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
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Apple Mixed-Reality Headset
Apple will release its long-awaited mixed-reality headset during a 10 a.m. PT keynote presentation at its annual Worldwide Developers Conference. Possibly called Reality Pro, the headset will be the tech titan’s first new hardware product line since the Apple Watch in 2015. The price tag, reportedly around $3,000, could deter buyers and limit its mass-market appeal. Meta Platforms recently unveiled its latest Meta Quest headset. Other rivals include the Microsoft HoloLens as well as offerings from HTC and Sony (SONY).
Apple also will detail the latest operating systems for the iPhone, iPad, Mac, Apple TV and Apple Watch. CEO Tim Cook also could discuss Apple’s AI efforts.
“We expect WWDC to be another ‘flex the muscles moment'” for Apple, Wedbush analyst Dan Ives wrote in a Sunday note.
Meanwhile, Evercore analysts raised their AAPL price target to 210 from 190.
Apple stock was up about 1% in premarket trade Monday. Last week, AAPL stock ran up 3.15% to 180.95, just below the January 2022 peak of 182.94. The company also is closing in on a $3 trillion market cap, closing Friday at $2.85 trillion.
Other Megacap Techs
MSFT lost a fraction in premarket trade. Shares edged up 0.75% last week to 335.40, hitting a 17-month high, not far from the November 2021 all-time high.
Google stock nudged lower early Monday. Last week, shares nudged 6 cents higher to 124.67. Google stock has been trading tightly for the past few weeks at a 52-week high. It almost has a three-weeks-tight, just missing out because one of the weekly gains was 1.51%, just exceeding the 1.5% maximum. But investors could use a move above the May 22 high of 126.43 as a place to slightly add to their position.
META stock lost almost 1% before Monday’s open, with Oppenheimer lifting its META price target to 350 from 285. The Facebook parent jumped 4% last week to 276.21, a fresh 52-week high.
Nvidia stock retreated more than 1% in premarket action. Shares rose 1% last week to 393.27, but came off Tuesday’s intraday all-time high of 419.38. NVDA stock, up 169% in 2023 and 96% above its 200-day, could use an extended break.
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Tesla Stock
Tesla stock advanced nearly 2% early Monday. Shares surged 10.8% to 213.97 last week. On Friday, TSLA stock raced past a 207.89 buy point from what’s either a cup or double-bottom base. The EV giant has advanced on above-average volume for five straight sessions, after few such days in the prior three months.
Tesla sold 77,695 China-made vehicles in May, including exports, according to data released Monday by the China Passenger Car Association. That’s up 2.4% from April. A breakdown of local sales vs. exports will come in a few days.
Tesla now says its base Model 3 gets the full $7,500 tax credit in the U.S., along with all other Model 3 and Model Y vehicles.
Palo Alto Stock
PANW stock jumped 5% early Monday. Shares last week just cleared a long-term consolidation.
Palo Alto Networks will join the S&P 500 before the open on June 20, replacing Dish Network (DISH).
That’s part of a number of changes to the S&P indexes. Doximity (DOCS), Berry Global (BERY), BWX Technologies (BWXT), Planet Fitness (PLNT) and Crown Holdings (CCK) are among those joining the S&P MidCap 400. Artisan Partners Asset Management (APAM) and CarGurus (CARG) are among the new additions to the S&P SmallCap 600.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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