Dow Jones futures rose modestly Monday morning, along with S&P 500 futures and Nasdaq futures. Tesla (TSLA) remained in focus as CEO Elon Musk tweeted early Sunday that changing his work habits is not “an option” — even after Tesla stock suffered its worst weekly loss in two years as doubts grew about Musk himself. Meanwhile, U.S.-China trade talks resume in D.C., even with President Donald Trump set to escalate the China trade war with a further $16 billion in Chinese goods set to face 25% tariffs set to kick in. Hopes for a China trade war truce helped lift the Dow Jones industrial average and S&P 500 index last week. The Nasdaq composite retreated last week, even with Apple (AAPL) soaring nearly 5%, with chip stocks breaking support and FANG stocks Facebook (FB), Google parent Alphabet (GOOGL) and Netflix (NFLX) skidding lower.
Dow Jones Futures Today
Dow Jones futures climbed 0.25% vs. fair value. S&P 500 futures were 0.2% higher. Nasdaq 100 futures rose 0.3%.
Tesla CEO Elon Musk Won’t Change
Tesla stock fell 1.7% before the open in Monday’s stock market trading, extending big losses.
Tesla CEO Elon Musk, responding to an open letter from Arianna Huffington urging Musk to get more sleep, said that was not “an option” Sunday morning.
Musk sent the tweet at 2:32 a.m. PT.
Tesla stock fell 14% last week, with most of that coming on Friday, following a New York Times interview. Musk, who had bouts of laughter and tears during the interview, admitted to relying on Ambien.
Musk has been Tesla’s greatest strength and greatest weakness. His outsized personality and world-changing vision has inspired investors, employees and customers. But he often overpromised, notably on Model 3 production. He hasn’t turned over the reins of the production process to a manufacturing expert who could deliver on production numbers and quality.
Musk’s “funding secured” go-private tweet doesn’t appear to have been true, inviting shareholder lawsuits and SEC scrutiny and sending Tesla stock plunging since the initial Aug. 7 spike. This, along with Musk’s other recent statements, may be shaking the faith of long-time defenders.
Setting aside the headlines, investors should remember this: Tesla is an unprofitable company with shares plunging through key support levels Friday. Tesla the relative strength line, which tracks a stock’s performance vs. the S&P 500 index, has been trending lower for more than a year. Tesla stock has a lowly Composite Rating of 16.
China Trade War Truce Or More Trump Tariffs?
U.S. and China trade talks will be held on Aug. 22-23 in Washington, D.C. But the officials are low- to mid-level. Meanwhile, Trump tariffs are due to hit another $16 billion worth of Chinese goods on Aug. 23. If those go forward, with Trump tariffs looming on a further $200 billion, it’s unclear how that trade talks will achieve a big breakthrough, or set the stage for a trade peace summit between Trump and Chinese President Xi Jinping. Also remember that the Trump administration is split on the China trade war, while Beijing has stressed that not giving into the U.S. is a matter of national pride.
Dow Jones, Stock Market Going Forward
U.S.-China trade war headlines are likely to drive the stock market in the coming week, especially with earnings season continuing to wind down. Fed chief Jerome Powell is due to speak at the annual Jackson Hole, Wyoming, monetary conference on Friday, Aug. 24.
The Dow Jones led last week with a 1.4% gain. China trade war stocks such as Boeing (BA), Caterpillar (CAT) and Apple rallied. Walmart (WMT) and Cisco Systems (CSCO) soared on earnings. All those stocks boosted the S&P 500 index, though energy was a drag as oil prices keep falling.
Meanwhile, the Nasdaq composite dipped 0.3%, even with Apple stock and Cisco stock up 4.8%. The Nasdaq did find support at its 50-day moving average.
Apple Stock Vs. The FANG Stocks
Apple stock has become a true market leader once again, powering ahead 14% in August after its July 31 earnings report. Apple’s RS line, which failed to make much headway over the prior year, has rallied to record highs. Apple rose a fraction before Monday’s open.
Meanwhile, Facebook and Netflix stock have broken support and continue to weaken, though they were slightly higher early Monday. Facebook fell 3.6% last week and Netflix 8.4%. Google-parent Alphabet retreated 3% last week. Alphabet stock is still in buy range, but only about 1% above a 1201.59 buy point. It’s also approaching a test of its 50-day line.
Amazon.com (AMZN), for its part, edged lower last week. But the e-commerce giant is near record highs.