Sunday night saw a surge in Dow Jones futures following Congress’s successful avoidance of a government shutdown on Saturday. Investors are eagerly awaiting Tesla’s delivery figures before Monday’s opening bell, alongside several Chinese electric vehicle (EV) competitors releasing their financial results on Sunday.
While a stock market rally is currently underway, it appears somewhat lackluster, particularly for the Dow Jones. Friday’s pullback from intraday highs has raised concerns that this rally attempt may be short-lived. However, it’s essential to note that much of Friday’s weakness was driven by fears of a government shutdown.
To validate this new uptrend, a follow-through day is necessary. Thus, investors are advised to exercise caution when considering additional exposure until such confirmation materializes.
Tesla (TSLA) is set to announce its third-quarter production and delivery figures early Monday, with analysts rushing to revise their forecasts downward in recent days. Meanwhile, Nio (NIO), Li Auto (LI), and XPeng (XPEV) disclosed their September and third-quarter sales figures on Sunday, while EV giant BYD (BYDDF) is expected to release its results before Monday’s market open.
Tesla’s stock briefly flirted with an aggressive entry point on Friday, while XPeng arguably offered an early buying signal. BYD faces some challenges, and both Li Auto and NIO stocks require substantial recovery time.
Government Shutdown Averted
Over the weekend, the House and Senate passed a 45-day continuing resolution, preventing a government shutdown with hours to spare. On Friday, the House rejected a short-term bill that included significant spending cuts, with 21 GOP hardliners voting against it, seeking more substantial reductions. Such a measure would have been unlikely to pass in the Senate.
While the government shutdown has been successfully avoided for now, there is the possibility that Congress may face a similar situation in 45 days.
Dow Jones Futures
Dow Jones futures climbed 0.55% compared to their fair value, while S&P 500 futures gained 0.6%, and Nasdaq 100 futures rose by 0.8%. Additionally, the 10-year Treasury yield increased by several basis points, reaching 4.62%.
New data reveals that China’s manufacturing sector expanded modestly in September. The official manufacturing PMI rose by 0.5 points to 50.2, indicating growth, while the private-sector Caixin index dropped 0.4 points to 50.6, still above the 50-point threshold. Readings above 50 signal expansion. However, Caixin’s service-sector gauge fell 1.6 points to 50.2, marking a nine-month low.
In other market news, Hong Kong’s Hang Seng market was closed on Monday, and the Shanghai composite remained inactive throughout the week due to the Mid-Autumn Festival.
It’s important to remember that overnight movements in Dow futures and other indices do not necessarily translate directly into trading activity during the subsequent regular stock market session.
