Tag Archives: U.S. stocks

U.S. Stocks Rise Ahead of Key Decisions and Major Tech Earnings

U.S. Stocks Rise Ahead of Key Decisions and Major Tech Earnings: The U.S. markets are experiencing significant anticipation ahead
of crucial decisions by the Federal Reserve and the announcement
of earnings data from four major technology companies valued at around $10 trillion.
These developments will significantly impact market trends and stock movements in the coming period.

 

Contents
 Shift in Stock Preferences

Collective Stock Performance

Interest Rate Expectations

Developments in Technology Companies

Review of Corporate Earnings

Future Market Trends

Conclusion

 

 

 

 

Shift in Stock Preferences

The shift in stock preferences has led the Nasdaq 100 index to the brink of correction,
with large tech stocks rising while small stocks fell after gaining up to 10% in July.
Investors await the earnings results of Microsoft, Meta Platforms, Apple, and Amazon,
which will be crucial in guiding the market after a disappointing start to the major companies’ earnings season.

 

Collective Stock Performance

The S&P 500 index stabilized near the 5,470-point level,
while large-cap companies’ “Magnificent Seven” index rose 1.4%.
Conversely, the Russell 2000 index of small companies fell by 1.3%.
Tesla’s stock surged after a positive recommendation from Morgan Stanley,
while McDonald’s shares declined despite a drop in sales as the company pledged to launch new promotions.

 

Interest Rate Expectations

It is widely expected that the Federal Reserve will keep interest rates unchanged next Wednesday.
However, investors see signs of a potential move in September,
with increasing risks from a weakening but still strong labor market.
Interest rate decisions in Japan and the United Kingdom will also be closely monitored.

 

 

 

 

Developments in Technology Companies

Experts noted that the dominance of a few technology companies this year is not related to Silicon Valley tech dreams
but rather to new developments and trends.
According to Bank of America analyses, S&P 500 companies that exceeded Wall Street estimates
The next day, in terms of sales and earnings, it outperformed the U.S. stock index by 2.4 percentage points.

 

Review of Corporate Earnings

The bleak expectations for U.S. corporate earnings negatively affect economy-linked stocks,
as investors worry about the impact of falling inflation on pricing power.
Michael Wilson from Morgan Stanley pointed out that a measure tracking earnings upgrades
versus downgrades has weakened, which is typical for this time of year.

 

Future Market Trends

After a robust first half of 2024, traders should temper their optimism about stock market gains in the coming months.
Data from SentimenTrader indicates that most key indicators have been in danger territory for 182 consecutive days,
nearing a level last seen during the meme stock frenzy in 2021.

 

Conclusion

Recent developments indicate that global markets are undergoing significant transformations,
which require investors and traders to monitor them continuously and make strategic decisions
based on precise analyses of economic data and major corporate earnings.

 

U.S. Stocks Rise Ahead of Key Decisions and Major Tech Earnings

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt: U.S. stocks surged to all-time highs as market volatility expectations
failed after the assassination attempt on Donald Trump, which boosted his chances of reaching the White House.
Trump has chosen Ohio Senator J.D. Vance as his running mate for the presidential election.

Contents

Jerome Powell’s Statements

A New Generation of Republicans

Major Stock Indices Rise

U.S. Bonds Rise

Analysts Reactions

Performance of Major Companies

Neil Dutta’s Comments

Greater Focus on Inflation Data

Electoral Impacts

Impact of the Assassination Attempt on Winning Chances

Republican National Convention

 

 

 

 

Jerome Powell’s Statements

Traders also closely monitored statements from Jerome Powell,
who noted that recent inflation readings had bolstered confidence and that the economy was performing “extremely well.”
He also pointed out that the labor market was heading towards better balance and that
the time lag between adopting monetary policy and its effects meant that the Fed could intervene before inflation reached 2%.
The Fed Chairman also clearly refused to signal any timing for interest rate cuts, stating that the policy was tight “but not overly so.”

 

A New Generation of Republicans

Vance, 39, is nearly four decades younger than the 78-year-old Trump.
He is a fresh voice contributing to the Republicans’ efforts and enhancing their appeal to the working class,
which previously formed a core base for the Democratic Party in battleground states like Michigan, Wisconsin, and Pennsylvania.

 

Major Stock Indices Rise

All major stock indices rose, with the S&P 500 achieving its 38th record high this year.
Trump Media & Technology Group Corp’s stock jumped by 30%.
The candidate’s chances boosted the positions of oil producers, weapons manufacturers, and private prisons.
His support for cryptocurrencies raised the value of Bitcoin and companies in the industry.
Tesla’s stock soared as Elon Musk endorsed Trump.
Solar energy and marijuana company stocks fell as Democrats became more supportive of these sectors.

 

U.S. Bonds Rise

Yields on 30-year U.S. bonds rose above those of 2-year bonds for the first time since January,
betting that Trump would adopt an expansionary fiscal policy if he won the U.S. presidential election in November. The dollar rose slightly.

 

 

 

 

 

Analysts Reactions

John Stoltzfus from Oppenheimer Asset Management said,
“We were shocked by the assassination attempt on former President Trump,
but we believe the markets will absorb the news quickly and without much fuss.
Shocking events do not deter investors; we expect them to remain focused on economic outcomes and earnings reports.”

 

Performance of Major Companies

The S&P 500 index rose to around 5630 points. The performance of major companies varied.
Apple shares peaked after Morgan Stanley classified it as the top pick.

Nvidia shares declined. The Russell 2000 index of small companies rose by 2%.
Goldman Sachs shares rose as earnings exceeded plans to reduce the pace of share buybacks.
Macy’s Inc. shares fell after the company ended acquisition talks.

 

Neil Dutta’s Comments

Neil Dutta from Renaissance Macro Research said,
“The only reason for not cutting interest rates in July is the illogical mindset followed by institutions when they say:
‘Well, we need to prepare the markets for that.’ I don’t understand it, but that is the case.”

 

Greater Focus on Inflation Data

Mark McCormick at TD Securities believes the markets are “less concerned with the elections”
and more eager to enjoy the decline in U.S. data surprises, especially the recent Consumer Price Index reading.

 

Electoral Impacts

Peter Boockvar from The Boock Report said, “Everyone is trading on their best Trump-related strategies—
but I think we’ve seen over the past century that stock market movements are more random than a president can impose.”

 

Impact of the Assassination Attempt on Winning Chances

According to PredictIt data, the chances of the potential Republican candidate,
who was shot during a rally in Pennsylvania on Saturday, winning a second term has increased following the attack.

 

Republican National Convention

The Republican National Convention in Milwaukee, held from Monday to Thursday,
marked the culmination of Trump’s control over the party. According to a post on the social media site X,
the former U.S. president told Fox News that he would announce his vice-presidential pick today.

 

U.S. Stocks Reach Record Levels Ignoring Trump’s Assassination Attempt

S&P 500 Index Approaches Historic Levels with Support from Nvidia

S&P 500 Index Approaches Historic Levels with Support from Nvidia: The S&P 500 index is approaching the 5490-point level,
marking the 31st record high this year.
In this context, 10-year Treasury yields fell seven basis points to 4.21%.
Bank of America’s institutional clients continued to invest in U.S. stocks for the second consecutive week.

 

Content

Rising Semiconductor Stocks

Bond Rally

Mixed Data

Infusion of Funds into the Stock Market

Hedging Against Risks

 

 

 

 

Rising Semiconductor Stocks

The rise in semiconductor stocks has driven Wall Street stock indices to another record high,
with traders betting that the Federal Reserve’s potential interest rate cuts will continue
to fuel the industry that has boosted the stock market this year.
The S&P 500 index approached the historic 5500-point level.
Nvidia became the most valuable company in the world, surpassing Microsoft and extending its record stock gains for the year.
An optimistic analyst predicted that the company’s value, which is at the heart of the AI boom,
could reach nearly $5 trillion next year, up from about $3.3 trillion.

 

Bond Rally

Bonds surged as traders flocked to buy $13 billion worth of 20-year Treasury bonds.
Wall Street saw the release of mixed economic data showing increased U.S. industrial production,
supported by a broad-based recovery in factory output. Retail sales rose sharply, with previous months’ figures being revised downward.
Federal Reserve officials emphasized the need for evidence that inflation has subsided before cutting interest rates.

 

 

Mixed Data

Anthony Saglimbene of Ameriprise said, “Investors should look at the half-full glass but recognize macroeconomic conditions,
as well as the nuances between corporate and consumer earnings and incoming economic data,
may develop in ways that could lower asset prices in the near term.”
The S&P 500 index is approaching the 5490-point level, marking the 31st record high this year.
Nvidia’s stock rose 3.5% after Rosenblatt Securities analyst Hans Mosesmann raised the target price
for the chipmaker to the highest on Wall Street at $200, up from $140.
Ten-year Treasury yields fell seven basis points to 4.21%.

 

 

 

 

Infusion of Funds into the Stock Market

Institutional clients of Bank of America continued to invest in U.S. stocks for the second consecutive week,
focusing on technology and social media stocks, according to strategists, including Jill Carey Hall,
in a note to clients.
Separately, a bank survey showed that global investors will likely continue pouring money into record-breaking stock markets.
When asked about the asset class that would benefit most from reallocating money market funds,
32% of participants chose U.S. stocks, 19% said the funds would go to global stocks,
and a quarter indicated they would buy government bonds.

 

Hedging Against Risks

There is currently little significant doubt in the market
that could curb enthusiasm for rising U.S. stocks supported by a small group of tech stocks.
However, some investors are increasingly seeking ways to hedge against concentration risks.
With the market hitting new records, this concentration becomes more pronounced.
Companies called “The Magnificent Seven” (Microsoft, Nvidia, Apple, Meta, Amazon, Alphabet, Tesla)
have contributed more than 60% of the S&P 500 index’s returns this year.

 

 

S&P 500 Index Approaches Historic Levels with Support from Nvidia