$NVIDIA Corp(NVDA)$ ๐น๐น๐น GAIN ๐น๐น๐น
Today witnessed significant downturns in the stock market, propelled by an unforeseen surge in the March Consumer Price Index (CPI). The month-over-month increase of 0.4% in the total CPI exceeded expectations of a 0.3% rise. Likewise, the core CPI, excluding food and energy costs, also climbed by 0.4%, surpassing the forecasted 0.3%. This CPI surge triggered substantial losses in Treasuries, with the 10-year note yield soaring from 4.35% to 4.56%, and the 2-year note yield escalating by 22 basis points to 4.97%.
The CPI report has intensified apprehensions regarding the Federal Open Market Committee's (FOMC) persistent hawkish stance on monetary policy, prompting investors to recalibrate their anticipations for future rate adjustments. The probability of a rate decrease at the June FOMC meeting plummeted from 57.4% to a mere 17%, as evidenced by the CME FedWatch Tool. Initially optimistic about six rate cuts by the close of 2024, the market has now tempered expectations to just two.
Notwithstanding the broader market decline, several prominent stocks demonstrated resilience, closing with gains:
- Meta Platforms (META, Financial) saw a 0.6% increase, reaching $519.83.
- Amazon.com (AMZN, Financial) rose by 0.2% to $185.95.
- NVIDIA (NVDA, Financial) experienced a 2.0% gain, closing at $870.39.
- Eli Lilly (LLY, Financial) advanced by 0.6%, ending at $761.98.
These stocks have exhibited notable performance this year, with META up by 46.9%, AMZN by 22.4%, NVDA by 75.8%, and LLY by 30.7%.
Year-to-date performance of market indices:
- S&P 500: +8.2%
- Nasdaq Composite: +7.7%
- S&P Midcap 400: +5.9%
- Dow Jones Industrial Average: +2.1%
- Russell 2000: +0.1%
Today's economic data presented mixed signals:
- The Weekly MBA Mortgage Applications Index slightly increased by 0.1%, following a -0.6% reading last week.
- Both March CPI and Core CPI surpassed consensus estimates, each rising by 0.4%.
- The year-over-year headline CPI acceleration could indicate sustained FOMC hawkishness, influencing June rate cut expectations.
- February's Wholesale Inventories met expectations at 0.5%, indicating a rise from January's 0.3%.
Looking forward, key economic indicators to monitor include March's Producer Price Index (PPI) and weekly jobless claims, in addition to updates on natural gas inventories and global market performances in Europe and Asia.
NVDA
With the stock rising from a key support level, a new entry is at hand.
There are two options for those holding the stock: Wait while the stock forms a base and add more at a proper buy point, or trim the holdings if the stock breaks a key support level such as the 50-day moving average.
Nvidia (NVDA) appears to be forming a base and the next possible entry could be 967.66 or 974. A clear base with a proper breakout makes Nvidia a buy.
Meanwhile, Nvidia's chart shows that its relative strength line, which compares stock performance to the S&P 500, is falling.
On Wednesday, however, shares are finding support at the 10-week moving average and are paring some of Tuesday's losses after investors reacted to Alphabet's (GOOGL) new AI chips. The rise from the support level offers a new entry around 840.
NVDA is a Zacks Rank #1 (Strong Buy)
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