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Stock Market 2023: What To Do After ‘Stay Away’ Year; Tesla, Nio, BYD Deliveries Due

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Dow Jones futures will open on Monday evening, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) and China EV makers such as Nio, Li Auto and BYD will report year-end and 2022 deliveries over the New Year’s holiday weekend.




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Investors will be looking for a brighter stock market in 2023 after a “stay away” year, especially for growth. The Dow, S&P 500 and Nasdaq all had their biggest annual declines in 14 years. A stock market rally attempt is underway, but has a long way to go to prove itself.

The Dow Jones dipped below its 50-day moving average on Friday. The S&P 500 and especially the Nasdaq have some distance to go to their 50-day lines, with several other key resistance areas along the way.

Celsius Holdings (CELH), Deere (DE), BioMarin Pharmaceutical (BMRN), Exxon Mobil (XOM) and Medpace (MEDP) are five stocks near buy points. It’s a diverse list, reflecting possible areas of market leadership in the new year.

DE stock and Medpace are on IBD Leaderboard. Celsius stock, MEDP stock are on the IBD 50. Deere and BMRN stock are on the IBD Big Cap 20.

Deere was Friday’s IBD Stock Of The Day.

But whether these stocks work or not depends on the market trending higher. Right now it is not. Investors should remain very cautious.

The video embedded in the article discussed the recent market action in depth and discussed what investors should be doing as stock market 2023 gets going. The video also analyzed CELH stock, Deere and BioMarin.

China’s Economy Struggling

China’s economic activity is tumbling as the abrupt end of strict Covid rules spur massive waves of infections. The official manufacturing index fell 1 point in December in 47, the government said Saturday.  The nonmanufacturing PMI, which covers service-sector and construction activity, dived 6.1 points to 41.6. Both are the lowest since February 2020, when Covid-19 first hit the country. Readings below 50 signal contraction.

China EV Deliveries

Nio (NIO), Li Auto (LI) and XPeng (XPEV) are on tap to report December, fourth quarter and full year EV deliveries on Sunday, Jan. 1. Li Auto on Friday said December deliveries of its hybrid SUVs would top 20,000, crushing November’s record 15,034. Nio recently lowered its Q4 delivery guidance, citing Covid-related issues. The guidance implied December deliveries of 14,263-15,263 EVs, which would slightly top November’s record 14,178. Xpeng should see deliveries rise after several month-to-month declines, but its model lineup is struggling.

BYD will likely report its December sales on Jan. 3, before the U.S. market open Tuesday. The EV and battery giant recently stated that Covid infections among workers was reducing production by at least 2,000 vehicles per day. Full-year deliveries of all-electric BEVs and plug-in hybrids should be around 1.88 million, BYD recently said. That implies December deliveries around 247,000-250,000, which would still be a record.

Nio stock, Li Auto, Xpeng and BYD all had a tough 2022, like other EV makers and growth stocks generally. They all bottomed in October or early November, but have pulled back in recent weeks.

Tesla Vs. BYD: Which EV Giant Is The Better Buy?

Tesla EV Deliveries

Tesla is expected to release fourth-quarter EV production and delivery figures on Jan. 2. Analysts expect Q4 Tesla deliveries of 418,000, though the consensus has been slipping in recent days amid further China weakness. Tesla offered big year-end incentives, especially in China and the U.S., to boost sales. That didn’t provide a huge boost in China, but did appear to clear inventory in the U.S.

In 2023, Tesla will benefit from new U.S. tax credits of up to $7,500, though the year-end incentives of $7,500 for the Model 3 or Model Y — with Model S and X vehicles added Dec. 30 — may have tapped some of that demand. A $55,000 price cap on most Model Y vehicles could limit Tesla’s EV credit boost.

Meanwhile, China is ending EV subsidies. Along with a massive Covid wave, that could further chill sales for EV makers there, including Tesla. Tesla may need significant new price cuts in China, where competition continues to heat up from BYD, Nio, Li Auto, Xpeng and others.

Over in Europe, several countries are cutting or ending EV subsidies, providing another headwind for Tesla as backlogs there fade.

Tesla stock plunged 65% in 2022, its worst annual decline by far. Shares crashed 37% in December to their lowest levels since September 2022. The EV giant did rebound from midweek bear market lows to end the week roughly flat. TSLA stock volume has been very high in the past several weeks.

Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Monday, along with S&P 500 futures and Nasdaq 100 futures.

U.S. stock and bond markets will be closed on Monday, Jan. 2, in observance of New Year’s.

On Tuesday, investors will get the December ISM manufacturing index. On Friday, the December jobs report looms large as the Federal Reserve looks for signs of a weakening job market.

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

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market 2022 Ends

The stock market fell into a correction on Wednesday, but a new rally attempt began Thursday. The major indexes slipped Friday, closing out a slightly negative week.

The Dow Jones Industrial Average dipped 0.2% in last week’s stock market trading. The S&P 500 index edged down 0.1%. The Nasdaq composite fell 0.3%. The small-cap Russell 2000 lost a fraction.

For the full year, the Dow Jones retreated 8.8%, the S&P 500 slumped 19.4% and the Nasdaq tumbled 33.1%. It was their worst annual performances since 2008.

The 10-year Treasury yield jumped 13 basis points last week to 3.88% after spiking 27 basis points in the prior week. The 10-year yield ended 2021 at 1.51%.

U.S. crude oil futures rose 0.9% to $80.26 a barrel last week, the third straight weekly gain. Crude oil prices climbed 6.7% for the year, but finished well off their peaks above $130 a barrel.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) dipped 0.3%. The VanEck Vectors Semiconductor ETF (SMH) climbed 1%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) rose 0.9% last week, but after hitting a fresh five-year low on Wednesday. ARK Genomics ETF (ARKG) declined 0.7%. TSLA stock is a major holding across Ark Invest’s ETFs. Cathie Wood’s Ark also owns a small position in BYD stock.

SPDR S&P Metals & Mining ETF (XME) fell 1.9%% last week. The Global X U.S. Infrastructure Development ETF (PAVE) lost 1.2%. U.S. Global Jets ETF (JETS) descended 0.9%. SPDR S&P Homebuilders ETF (XHB) slipped 0.8%. The Energy Select SPDR ETF (XLE) rose 0.5% and the Financial Select SPDR ETF (XLF) advanced 0.7%. The Health Care Select Sector SPDR Fund (XLV) dipped 0.2%.

Five Best Chinese Stocks To Watch Now

Stock Market 2023: 5 Stocks To Watch

BioMarin stock dipped 0.8% to 103.49 last week, pulling back in the second half of December but holding support around its 21-day line. A strong rise from current levels might offer an aggressive entry. But investors may want to wait for BMRN stock to forge a new base, or find support at the 10-week line. BioMarin earnings are expected to triple in 2023.

Deere stock fell 1.9% to 428.76 in the past week, pulling back to the 10-week moving average, with a flat base now on a weekly chart. The official buy point is 448.50. Investors might use a 10-week line bounce as an early entry for DE stock, perhaps after retaking the 21-day line.

CELH stock retreated from record highs in December, sliding for the past four weeks, but rebounded from its 50-day line on Friday, closing at 104.04. Celsius stock could offer an early entry if it clears the 21-day line decisively, with a move above the Dec. 27 high of 109.31 as a specific trigger.

XOM stock climbed 1.5% last week to 110.30, slightly above a rising 50-day moving average. A move above the Dec. 27 high of 110.47 would offer an early entry. Exxon stock has a flat base with a 114.76 buy point, according to MarketSmith analysis.

MEDP stock rose modestly Thursday from its 50-day moving average, breaking above a downtrend line in a recent consolidation. That offered an early entry within its consolidation. On Friday, with the major indexes retreating again, Medpace stock fell back to its 50-day, but did close well.

Medpace’s move could still work, but it just shows how difficult it has been for stocks to make headway.

Stock Market Analysis

The stock market edged lower last week, even with Thursday’s strong bounce, capping a tough year.

The major indexes are off their October bear market lows but well below their December short-term highs. A rally attempt technically is underway as the 2023 stock market kicks off, but it needs a follow-through day to confirm a new uptrend.

Even then, the market would face a number of technical hurdles, with the S&P 500, Nasdaq and Russell 2000 all some distance below their 50-day and 200-day lines. The Dow Jones, the relative leader in recent months, dipped below its 50-day line to end 2022 but is above its 200-day.

Until there’s clarity on the Fed rate endgame and the economy, the market could be rangebound in choppy, sideways action.

The December jobs report on Friday, Jan. 6, will be important. Significant slowing in hiring and wage gains would reinforce expectations for further slowing in Fed rate hikes, and raise hopes that peak rates are near. But robust or accelerating job and pay growth would likely trigger a big sell-off.

Time The Market With IBD’s ETF Market Strategy

What To Do Now

On Friday’s year-end IBD Live, O’Neil Global Advisors portfolio manager Charles Harris said it was a “stay away” market in 2022. There will be great opportunities ahead, including in innovative companies and trends, but not yet.

A number of stocks are setting up nicely, including Deere, BioMarin and Medpace. The problem is that in the past few months, a lot of stocks have set up, but those setups generally haven’t worked out.

But investors should be stay engaged and be ready to act. If there’s a confirmed rally in early 2023, many stocks have the potential to quickly move solidly or sharply higher.

So work on your watchlists but enjoy the long weekend. Come back to the new year refreshed, waiting for the next bull market.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

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

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Business

Nio says Nvidia chip restrictions won’t hurt them

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Chinese electric car company Nio said it doesn’t expect U.S. restrictions on Nvidia to affect the start-up’s business operations.

Vcg | Visual China Group | Getty Images

Li said Wednesday there are many companies in China with artificial intelligence training chips, and that Nio is evaluating opportunities to work with different companies.

But he said the U.S. restrictions would not affect Nio’s long-term strategy.

Last week, automaker Geely said it won’t be affected by the new restrictions, as did autonomous driving start-ups WeRide and Pony.ai.

Read more about electric vehicles from CNBC Pro

Earlier this week, Chinese financial news site Caixin reported that He Xiaopeng, chairman of electric car start-up Xpeng, said the restrictions would bring challenges for all autonomous driving algorithm training on cloud computing platforms.

But he said the company has bought enough of the high-tech products to meet demand for the coming years, according to the report. Caixin cited He’s post on a personal WeChat account, which is similar to a private Facebook news feed post.

Xpeng did not immediately respond to a CNBC request for comment.

— CNBC’s Arjun Kharpal contributed to this report.

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Business

Dow Jones Reverses Ahead Of Apple iPhone 14 Debut; Tesla Rival Nio Surges On Earnings

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The Dow Jones Industrial Average reversed higher Wednesday morning, as Apple stock rallied ahead of its “Far Out” iPhone 14 launch event.




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Key earnings reports Wednesday came from Academy Sports & Outdoors (ASO) and Tesla rival Nio (NIO).

Academy rallied more than 7% after mixed results, while Nio stock reversed from early losses to race more than 7% higher in early trade after reporting a wider-than-expected second-quarter loss and a weak revenue outlook.

Electric-vehicle leader Tesla (TSLA) gained 1.3% Wednesday. Among the Dow Jones industrials, tech titans Apple (AAPL) and Microsoft (MSFT) both rose 0.8% after today’s stock market open.

In the market’s current volatility, Arista Networks (ANET), Costco (COST), Restaurant Brands (QSR) and Ulta Beauty (ULTA) — as well as Dow Jones stock Chevron (CVX) — are among the top issues to buy and watch. Keep in mind the market’s increased volatility is a good reason for investors to be more defensive.

Costco is an IBD Leaderboard stock in the wake of a recent breakout, while Apple stock and Restaurant Brands were featured in this week’s Stocks Near A Buy Zone column.

Dow Jones Today: Treasury Yields, Oil Prices

After the opening bell Wednesday, the Dow Jones Industrial Average gained 0.4%, while the S&P 500 rose 0.5%. The tech-heavy Nasdaq composite rose 0.8% in morning trade.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) and the SPDR S&P 500 ETF (SPY) were both squarely higher in early trade.

The 10-year Treasury yield ticked lower to 3.30% early Wednesday, easing after Tuesday’s jump. On Tuesday, the 10-year Treasury yield notched its highest closing level since June 15.

U.S. oil prices hit a recent low Wednesday morning, as West Texas Intermediate futures declined more than 3%. WTI futures traded below $84 a barrel.

Stock Market Rally Under Pressure

On Tuesday, the Nasdaq composite sustained the biggest margin loss of the major indexes. It extended its losing streak to seven trading days as it dipped 0.7%. It is the Nasdaq’s longest losing streak since November 2016, according to Dow Jones Market Data.

Tuesday’s The Big Picture column commented, “It was a bad day for retail, with jewelers, automobile, home furnishings and consumer electronics retailers among the worst performers. Generic drugmakers also struggled.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.

Five Dow Jones Stocks To Watch Now

Dow Jones Stocks To Watch: Chevron

Dow Jones stock Chevron dropped 0.5% Tuesday. The stock added a handle to a cup base, moving the correct buy point to 166.93 — according to IBD MarketSmith chart analysis — amid a strong performance by energy stocks so far this year. The stock dropped 2.5% early Wednesday, as oil prices faltered.

CVX stock shows a strong 97 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.

4 Top Growth Stocks To Buy And Watch In The Current Stock Market Rally

Top Stocks To Watch: Arista, Costco, Restaurant Brands, Ulta

Arista Networks has added a handle to a double-bottom base, placing the correct entry at 132.97, according to IBD MarketSmith chart analysis. Arista’s relative strength line is starting to give ground, as the stock stays below its long-term 200-day line. ANET shares were up 0.5% early Wednesday.

IBD Leaderboard stock Costco fell further below its 50-day line Tuesday and is about 6% below its 552.81 buy point from a cup with handle. The stock is close to triggering the 7%-8% loss-cutting sell rule. Shares traded up 0.5% Wednesday.

Restaurant Brands dropped 1.1% Tuesday, falling for a second straight day. Shares are building a cup with handle that has a 61.19 buy point. Restaurant Brands franchises and operates 29,000 Burger King and Tim Hortons restaurants globally. The stock was up 0.4% early Wednesday.

Cosmetics retailer Ulta Beauty remains modestly above a 417.08 buy point in a double-bottom base following Tuesday’s 1.1% rise. The RS line hit a new high Tuesday, as the stock demonstrates abnormal strength in a weak market environment. ULTA shares traded up 0.4% Wednesday morning.

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla Stock

Tesla stock rallied 1.6% Tuesday, closing right above its 50-day line, which is a potential support level to watch. Shares of the electric-vehicle giant rose 1.3% Wednesday morning.

Tesla stock found resistance at its 200-day line in recent months and is about 34% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares declined 0.8% Tuesday, closing further below support at their 50-day line. The stock is about 13% away from a buy point at 176.25 off a cup with handle. Despite the recent losses, the stock’s relative strength line is holding near new highs, indicating steady stock market outperformance.

Shares rose 0.8% Wednesday morning ahead of the company’s “Far Out” product launch event at 1 p.m. ET. Apple is set to unveil the iPhone 14 line, a fresh slate of smartwatches and new AirPods.

Microsoft fell 1.1% Tuesday, extending a losing streak to seven sessions and falling further below its 50-day line. Shares remain sharply below their long-term 200-day line and about 28% off their 52-week high. The stock gained 0.8% early Wednesday.

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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Business

Nio Earnings Mixed, Outlook Weak As Tesla China Rival Ramps Up Models, Markets

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Nio stock slid further below key levels Wednesday morning with Nio (NIO) reporting a wider-than-expected second-quarter loss and weak revenue guidance.




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Nio’s EV deliveries rose 14%, year over year, in Q2. They slowed in July and August vs. June, but held above 10,000 both months.

The once red-hot Chinese EV startup has seen headwinds mount. Those headwinds include new export curbs on Nvidia (NVDA), a Nio chip supplier. It also includes fierce new competition and fresh Covid-19 lockdowns in China.

Investors will be keen to learn how Nio is managing through persistent supply challenges while pursuing ambitious growth strategies. The emerging Tesla (TSLA) rival is launching several new EVs, expanding overseas, and eyeing a mass-market foray.

Nio Earnings

Estimates: Analysts polled by FactSet expect net loss to widen to 16 cents per American Depositary Share from 6 cents a year ago. Revenue is seen growing 8.5% to $1.415 billion, below the low end of Nio’s Q2 guidance range.

Results: Nio lost 20 cents a share, while revenue climbed 22% to $1.54 billion.

Outlook: Nio sees Q3 revenue of $1.918 billion-$2.03 billion. Wall Street had expected Q3 revenue of $2.38 billion, a 55% gain. The EV maker also sees Q3 deliveries of 31,000-33,000. With 20,729 EVs delivered in July and August already, that implies September deliveries of 10,271-12,271.

Nio Stock

Shares fell 4.4% before the open on the stock market today. Nio stock lost 3.5% to 17.11 on Tuesday. Nio stock met resistance at the 50-day moving average in late August and remains far below the 200-day average.

Startup rivals Li Auto (LI) and Xpeng (XPEV) fell about 1% early Wednesday after losing more ground Tuesday. Li Auto stock edged lower to a three-month low while XPEV stock sank 5.1% to a record low.

China EV giant BYD (BYDDF) rebounded 0.8% Tuesday, following a four-session plunge as Warren Buffett sold a small amount of his big stake. Tesla stock rose 1.6%, back above its 50-day moving average as it fights for support there.

Futures Rise After Nasdaq Falls Yet Again; This Solar Stock Shines

Nio EV Sales, Growth Strategies

Founded in November 2014, Nio targets the Chinese market for premium electric cars. As of August, it had produced and sold almost a quarter-million electric vehicles cumulatively.

EV sales more than doubled for Nio — and for China overall — in 2021. But the lingering chip shortage and other supply disruptions hit Nio’s production and EV sales earlier this year.

Nio sold 25,059 EVs in Q2, roughly in line with the top end of its delivery guidance. It sold 10,052 EVs in July and 10,677 EVs in August, both below June’s level.

But the EV startup did increase deliveries in August vs. the prior month, trumping Xpeng and Li Auto, which reported declines.

In July, a shortage of casting parts hurt the production of Nio EVs, including the flagship new ET7 electric sedan. But Nio began delivering the new ES7 SUV on Aug. 28 and plans to launch the smaller ET5 sedan on Sept. 30.

Besides a growing EV lineup, Nio plans to expand abroad, shipping the luxury ET7 to Europe. It already sells EVs in Norway and aims to be in 25 countries by 2025.

Various reports suggest that Nio could launch a mass-market EV, challenging the likes of Volkswagen (VWAGY) in China.

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Business

NIO, other China-based EV maker stocks surge after July deliveries jump

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The U.S.-listed shares of NIO Inc.
NIO,
+1.23%
rallied 4.2% in premarket trading Monday, after the China-based electric vehicle maker reported deliveries rose in July from a year ago to mark a third-straight monthly increase. The company said July deliveries increased 26.7% to 10,052 vehicles. That comes after a 60.3% increase in July and a 4.7% rise in May, which followed a 28.6% drop in April due to COVID-related shutdowns. In July, NIO said its deliveries included 7,579 premium sport-utility vehicles (SUVs) and 2,473 premium sedans. Also on Monday, fellow China-based EV makers XPeng Inc.
XPEV,
+0.66%
reported a 43% jump in July deliveries to 11,524 vehicles, to send the stock up 3.9% premarket, and shares of Li Auto Inc.
LI,
-0.27%
climbed 4.2% after the company reported July deliveries that grew 21.3% to 10,422 vehicles. Over the past three months, NIO’s stock has hiked up 18.1%, XPeng shares have slipped 0.7% and Li Auto’s stock has soared 46.4%, while the S&P 500
SPX,
+1.42%
has inched lower by less than 0.1%.

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Business

Nio: Two killed as car crashes to ground from Shanghai building

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One member of Nio’s staff and an employee from a partner company were killed in the accident, the Chinese electric carmaker said in a statement Thursday.
Both were inside the test vehicle, which crashed on Wednesday afternoon at the Shanghai Innovation Park, Nio (NIO) said in a Weibo post. The company’s headquarters is inside the industrial park.

It added that “according to analysis of the on-site situation, we can preliminarily confirm that it’s an accident (not due to vehicle-related reasons).”

Nio also said it is cooperating with a police investigation into the cause of the accident.

The company hasn’t responded to a request for additional comment by CNN Business.

Nio’s statement on the crash attracted at least 78 million views on Weibo and more than 1,700 discussion posts. Videos circulating online show rescue workers in orange suits attempting to save passengers in the car, which looks badly damaged.

Founded by Chinese entrepreneur William Li in 2014, Nio has become one of the fastest growing electric car startups in China, and one of several homegrown rivals to Elon Musk’s Tesla.

Last year, it delivered 91,429 vehicles, up 109% from 2020, according to the company. For the first five months of this year, it delivered 37,866 units, up 12% from the same period a year ago.

Tesla was the top seller of pure EVs in China until April, when Covid lockdowns in Shanghai affected its sales and supply chains. China’s BYD (BYDDF), backed by Warren Buffett, overtook Tesla that month.

Nio listed its shares on the New York Stock Exchange in 2018.

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Business

2 people died after a Nio electric car they were test driving fell 3 floors in Shanghai, company says

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A person views one of Nio’s self-driving electric cars in Germany.NOK

  • Two people died after a Nio electric car they were test driving fell three floors, per Nio’s statement.

  • The company did not specify in its statement what caused the accident.

  • Social media users in China said Nio had a responsibility to ensure the test drive was safe.

Two people died after an electric car made by Tesla’s Chinese rival, Nio, fell three floors in Shanghai on Wednesday afternoon, per the company’s statement on China’s Twitter-like platform, Weibo.

The two people were test driving one of Nio’s cars at its Shanghai headquarters when the incident happened, per the statement. One of the people was a Nio employee, while the other worked for a supplier.

Photos shared on social media and published in Chinese media appear to show chaos at the scene of the accident.

In one of the photos, rescue workers appear to be surrounding a gray car lying on its side, according to a tweet from China-based electric-vehicle news outlet CnEVPost. Broken glass and debris can be seen around the vehicle.

“Based on the analysis of the situation at the scene, it can be preliminarily confirmed that it was an accident and not related to the vehicle itself,” Nio wrote in the Weibo statement. Investigations are ongoing, it added.

The company did not specify in its statement what caused the accident. Various media reports described the floor from which the car fell as a test-drive area, a car park, or a showroom. Nio did not immediately respond to Insider’s request for comment.

The car involved in Wednesday’s incident appeared to be a model ET5, which features self-driving technology, according to South China Morning Post (SCMP).

Another Nio vehicle was involved in a fatal accident last year. A Chinese businessman died in August after his Nio ES8, which had its self-driving system activated, rear-ended another vehicle on a highway in Fujian province, per SCMP.

Founded in 2014, Nio markets itself as a premium car brand focused on autonomous cars. It’s often seen as a rival to Tesla. Nio is publicly listed in New York, Hong Kong, and Singapore.

Several Weibo users questioned Nio’s handling of Wednesday’s incident.

Zhongcao Daren Zhuge, a Weibo influencer with 5.1 million followers, said on Friday that Nio was responsible for ensuring that the environment was safe for the test drive. “Why was the car not tested in a designated area? Why were there no guardrails and protection facilities? Did employees receive safety training?” he wrote in a Weibo post.

Read the original article on Business Insider



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Business

Why Did Nio Shares Jump Today?

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What happened

Investors in Chinese electric vehicle (EV) maker Nio (NIO 2.03%) are taking some recent struggles in stride. The American depositary shares were up as much as almost 5% Monday morning, and remained 2% higher as of 10:51 a.m. ET.

So what

That move could be surprising to some after the company reported its April 2022 deliveries over the weekend. The 5,074 electric vehicles delivered last month marked a major drop from April 2021.

Nio ET5 midsize sedans will begin deliveries later this year. Image source: Nio.

For all of 2021, Nio more than doubled its deliveries year over year, and it was continuing to increase production this year. But quarantines and lockdowns related to COVID-19 cases in China are hitting the business now. April vehicle deliveries decreased 28.6% compared to the same month last year. But year-to-date deliveries in 2022 are still 13.5% higher than the prior-year period.

Now what

Another data point that might have investors feeling better is the fact that with April deliveries, the company is on the verge of its 200,000th vehicle since it began production in 2018. 

The recent drop in production can be pinned squarely on supply chain issues mostly related to the lockdowns imposed as a new wave of COVID-19 spreads in various regions of China. Shanghai, in particular, is a major commercial city that remains locked down. While Nio’s Hefei facility is about 300 miles from the city, suppliers have been directly affected, causing Nio to pause production. 

The company says production continues to recover gradually. Investors seem to be letting the short-term issue pass, and are focusing on the new products the company is launching this year. Its first sedan has already begun deliveries, with almost 700 ET7s shipped in April. The first batch of midsize ET5 sedans has also been produced to be used for tooling trials. That vehicle will begin deliveries this fall. These positive factors are what investors seem to be looking at today.



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Business

Nio, Veru, Sailpoint Technologies and more

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Take a look at some of the biggest movers in the premarket:

Nio (NIO) – The China-based electric carmaker’s shares slumped 8.4% in premarket action after it suspended production due to Covid-19 related supply chain disruptions.

Veru (VERU) – The drugmaker’s shares surged 24.8% in the premarket after it reported “overwhelming” evidence of efficacy for its experimental drug for treating hospitalized Covid-19 patients. It will meet with the Food and Drug Administration to seek emergency use authorization for the treatment.

Sailpoint Technologies (SAIL) – The cybersecurity company’s shares soared 29.5% in premarket trading after it agreed to be acquired by private-equity firm Thoma Bravo for $6.9 billion or $65.25 per share.

Twitter (TWTR) – Twitter fell 1.5% in the premarket following the announcement that Elon Musk will not be joining Twitter’s board. Musk revealed a 9.2% stake last week, followed by news that he would be joining the board. Neither side gave a reason for the reversal.

Shopify (SHOP) – The e-commerce platform company’s stock added 1.1% in the premarket after it proposed a 10-for-1 stock split, as well as the creation of a new “founder share” that would increase CEO Tobi Lutke’s voting power to 40% from the current 34%.

AT&T (T) – AT&T added 1.9% in the premarket after completing the spin-off of its WarnerMedia unit to Discovery Communications late Friday, with the stock of the newly combined Warner Brothers Discovery (WBD) set to begin trading today under its new name and ticker symbol. Separately, Deutsche Bank named Warner Brothers Discovery a “top pick” given its robust entertainment content.

Nvidia (NVDA) – The graphics chipmaker’s stock slid 3% in premarket action, following the announcement that it would seek shareholder approval to double the number of authorized shares. That would give Nvidia the flexibility to take actions like stock splits and issuing equity incentives without a further shareholder vote.

Lowe’s (LOW) – Lowe’s fell 1% in the premarket after announcing the departure of David Denton as chief financial officer. Denton is leaving the home improvement retailer to take the same job at drugmaker Pfizer (PFE). He’ll be replaced by Senior Vice President Brandon Sink effective April 30.

JetBlue (JBLU) – The airline is cutting back its summer schedule in an effort to avoid flight disruptions, while working to ramp up hiring. JetBlue added 1% in premarket trading.

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Dow Jones Futures: Market Rallies As Nvidia, AMD Lead Chip Surge; Nio Earnings Mixed

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Dow Jones futures fell slightly overnight, along with S&P 500 futures and Nasdaq futures. The stock market rally bounced back Thursday from the prior day’s retreat.




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Nvidia (NVDA) and Advanced Micro Devices (AMD) were big winners on a strong day for semiconductors. Nvidia and AMD stock cleared some resistance levels, offering aggressive add-on entries for existing long-term holders.

Fellow chipmaker Broadcom (AVGO) cleared a buy point, while commodity plays Marathon Petroleum (MPC) and BHP (BHP) broke out, at least intraday. Google parent Alphabet (GOOGL) flashed a fresh buy signal. Anthem (ANTM) moved back into a buy zone as health insurers and service providers act well.

Nio Earnings

After the close, Tesla (TSLA) EV rival Nio (NIO) reported a wider-than-expected loss while revenue narrowly topped.

Earlier Thursday, the first luxury ET7 sedans rolled off the assembly line. On March 28, Nio ET7 deliveries begin, with two more new EVs set to debut later this year. Xpeng (XPEV) reports earnings on Monday, with EV giant BYD (BYDDF) also likely due that week, along with March China EV sales.

Very late Thursday night, Nio gave more details on its cheaper ET7 sedan and a newer ES7 due out in the third quarter. It also said work is advanced on a new, lower-priced EV brand.

Nio stock fell 2% late Thursday, but traded halted before the company’s 9 p.m. ET conference call. Shares rose 0.5% in Thursday’s session. XPEV stock and BYD stock also rose a fraction. Tesla stock climbed 1.5% to 1,013.92.

Stocks On IBD Lists

Nvidia stock, Tesla and Anthem are on IBD Leaderboard. AMD stock was added to SwingTrader. Google stock is on IBD Long-Term Leaders. Tesla, Nvidia and AVGO stock are on the IBD 50.

The video embedded in the story discusses Thursday’s market rebound and analyzes Nvidia, AMD and AVGO stock.

Dow Jones Futures Today

Dow Jones futures edged lower vs. fair value. S&P 500 futures sank 0.15% and Nasdaq 100 futures fell 0.2%.

The 10-year Treasury yield rose 3 basis points to 2.37%. Crude oil prices fell 1%.

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

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally bounced back from Wednesday’s retreat, gaining steam after a NATO meeting without any surprises.

The Dow Jones Industrial Average rose 1% in Thursday’s stock market trading. The S&P 500 index popped 1.4%, with Nvidia stock and other chipmakers among the best performers. The Nasdaq composite jumped 1.9%. The small-cap Russell 2000 advanced 1.1%.

U.S. crude oil prices fell 2.3% to $112.34 a barrel, continuing to drift lower in electronic trading while stocks continued trading.

The 10-year Treasury yield rose 2 basis points to 2.34%, though off session highs.

ETFs

Among the best ETFs, Innovator IBD 50 (FFTY) rallied 2.2%, while Innovator IBD Breakout Opportunities (BOUT) climbed 0.8%. The iShares Expanded Tech-Software Sector ETF (IGV) retreated 0.7%. VanEck Vectors Semiconductor (SMH) leapt 4.9%. NVDA and AMD stock are major SMH holdings, with Broadcom a significant holding.

The SPDR S&P Metals & Mining ETF (XME) gained 2.7%, The Global X U.S. Infrastructure Development ETF (PAVE) advanced 1.2%. U.S. Global Jets (JETS) ascended 2.1%. SPDR S&P Homebuilders (XHB) slumped 1.1%. The Energy Select SPDR ETF (XLE) edged up 0.25%, and the Financial Select SPDR ETF (XLF) rose 0.8%. The Health Care Select Sector SPDR Fund (XLV) added 1.2%.

Reflecting stocks with more speculative stories, the ARK Innovation ETF (ARKK) rose 1.1% and ARK Genomics (ARKG) tacked on 1.2%, with both trading between their 21-day and 50-day lines. Tesla stock remains the No. 1 holding across Ark Invest’s ETFs. Ark Invest also owns some BYD and XPEV shares.

Five Best Chinese Stocks To Watch Now

Nvidia Stock

Nvidia stock jumped 9.8% to 281.50 in heavy volume after pausing for a few days. A trader could have used Thursday’s move above this week’s highs — roughly coinciding with the early-February peak — to start a new position, but the risks are elevated. Thursday’s move was better suited for an add-on buy, if anything.

AMD Stock

AMD stock popped 5.8% to 120.53, moving above the 50-day and 200-day lines. An aggressive trader could have used this as an opportunity to take an early position, but there is a lot of overhead resistance.

AVGO Stock

Broadcom stock advanced 4.5% to 626.43, clearing a 614.74 early entry. AVGO stock is moving up toward the consolidation buy point of 677.86. The relative strength line, the blue line in the charts provided, is close to highs already.

BHP Stock

BHP stock rose 1.8% to 74.27, clearing a cup-with-handle buy point of 73.68. Investors could have taken a position on March 18, as the mining giant broke a downtrend in the handle.

Mining and metal plays have been trending higher, but they are prone to significant pullbacks.

Marathon Petroleum Stock

MPC stock climbed 1.2% to 81.39, closing just below an 81.49 flat-base buy point, according to MarketSmith analysis. Shares hit 81.75 intraday.

Marathon Petroleum is a major U.S. refiner, as well as a petroleum products retailer and transporter, so it isn’t as closely tied to crude oil prices as, say, shale oil producers.

Google Stock

Google stock climbed 2.4% to 2,831.44, again bouncing from its 200-day moving average and moving slightly above Tuesday’s high. Investors could buy GOOGL stock now as an early entry or as a Long-Term Leader.

ANTM Stock

Anthem stock advanced 2,5% to 473.73, back above buy points at 470.12 and 472.11.

UnitedHealth (UNH) and Molina Health (MOH) rose within their buy zones. CVS Health (CVS) and HCA Healthcare (HCA) also are working on buy points.

Time The Market With IBD’s ETF Market Strategy

Market Rally Analysis

The stock market rally rebounded Thursday, closing near session highs. The Nasdaq led while the S&P 500 moved back above its 200-day moving average. The Dow Jones, little changed for the week, closed above its 50-day line once again.

Sideways action or a modest pullback in the major indexes here wouldn’t be a bad thing. It would let stocks finish off bases and form handles, or at least longer resistance areas.

If the market rally doesn’t pause here, the major indexes could do so near their early-February peaks.

While it would have been nice for Nvidia stock to pause for a few more days, it’s definitely positive to see chip names rebounding. It’s hard to see a big tech advance without chip stocks playing a major role.

Energy and commodity plays such as Marathon Petroleum and BHP stock still look strong. Health insurers such as ANTM stock are trading right around buy points. Some biotechs and drugmakers such as Regeneron Pharmaceuticals (REGN) could be working on handles or high handles. Some networking stocks still look strong.

A few travel plays are trying to forge new consolidations, but could use some more time to widen out their V-shaped patterns.

Among the megacaps, Apple (AAPL) rose for an eighth straight session, still in range from an early entry and close to an official breakout. But a handle, or at least a pause, would be great to see. Google parent Alphabet (GOOGL) is offering a buy signal. Tesla stock moved back above the 1,000 level in its eighth straight advance, but could use a handle to offer a lower buy point.

Tesla Vs. BYD: Which Booming EV Giant Is The Better Buy?

What To Do

The stock market rally continues to show strong action, bouncing back from Wednesday’s retreat.

There are buying opportunities out there, but many stocks are extended or running up from the bottom. Don’t feel compelled to keep adding exposure if you don’t like the setups. If you picked up exposure over the prior week, there’s nothing wrong with sitting on your hands.

Keep working on those watchlists. Some stocks will come off your lists because they are extended or now lagging. A new crop of stocks is coming to the fore.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

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

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