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Dow Jones Futures Rise As Market Rally Gains Steam; Nvidia, Google Are Buys; Tesla Rivals Nio, Xpeng Report Sales

June 01 2021
Dow Jones futures rose modestly Tuesday morning, along with S&P 500 futures and Nasdaq futures. The stock market rally continued to strengthen last week, with more breakouts and buying opportunities picking up. But investors should step cautiously, ready to act in a still-tricky market.
 
Goldman Sachs stock, Nvidia (NVDA), Google-parent Alphabet (GOOGL) and General Electric (GE) are all in buy range.
 
Nvidia stock and Google are on IBD Leaderboard. Goldman Sachs (GS) is on SwingTrader and the IBD 50.

Tesla EV Rivals Nio, Xpeng Report Sales

 
Nio (NIO) and Xpeng (XPEV) reported May delivery figures early Tuesday. Nio reported sales of 6,711, up 95% vs. a year earlier, but down 5.5% from 7,102 in April. Xpeng sales of 5,686 shot up 483% vs. a year before, rising 10% from 5,147 in April.
 
Li Auto (LI) and BYD Co. (BYDDF) will likely release May sales in the next couple of days. Can Nio and its China EV rivals grab share from Tesla (TSLA) in that huge auto market? Or will chip shortages stymie their expansion plans?
 
Nio in particular has warned that chip woes will limit production in Q2. On Tuesday, Nio said it expects Q2 production of 21,000-22,000 vehicles, implying June output will pick up to 7,187-8,187. Xpeng and Li Auto, which recently reported earnings, see sequential growth in the second quarter.
 
Tesla's China sales for May will come later in June from industry reports. In April, Tesla's China sales plunged by nearly two thirds. It's unclear if that reflected weak demand amid a China consumer backlash, fanned by state media, or production limits due to chip or battery shortages. China has been Tesla's main growth driver over the past year, so an extended retreat would be a major blow for the EV giant.
 
Tesla has removed radar sensors from Model 3 and Model Y vehicles for the North American market. CEO Elon Musk had touted vision-only driver-assist, but there are reports that chip shortages spurred the abrupt shift.
 
Musk confirmed Sunday that Tesla also removed lumbar support from the passenger seat in Model 3 and Model Y vehicles, presumably due to chip shortages. He said recent Tesla price hikes reflect supply chain pressures.
 
Nio stock reclaimed its 50-day line last week, along with Xpeng, Li Auto and BYD, but all are still far below old highs. Tesla stock reclaimed its 200-day moving average, moving back toward its 50-day.
 
Early Tuesday, Nio and Xpeng stock rose solidly. Tesla climbed 1%.

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