To The Moon

After the latest Purchasing Managers' Index (PMI) showed an expansion in the manufacturing sector but revealed an increase in the "prices paid" index during December, the major U.S. indices lost ground, with S&P 500 slipped 1.11%. Underperformance in the technology sector dragged on the NASDAQ which fell 1.89%, while the DJIA ended the session 0.42% lower.

The indication of pricing pressure in the final month of 2024 could encourage a cautious stance by Federal Reserve policymakers as they weigh the appropriate timing and magnitude of additional interest rate cuts this year.

The broad tumble was also partly fueled by rising Treasury yields. Volume fell on the New York Stock Exchange and rose substantially on the Nasdaq, according to preliminary data. Decliners topped advancers by 5-to-2 on the NYSE and by about 11-to-5 on the Nasdaq, according to FactSet.

Significant Stock Performance - Palantir Losses - An Opportunity?

The heaviest losses in the S&P 500 hit shares of big data analytics software provider Palantir Technologies (PLTR), which dropped 7.8%. Tuesday's decline extended the losses posted in the prior session after Morgan Stanley analysts expressed their trepidation about the stock's valuation following the massive 2024 run-up that made Palantir the top performer in the benchmark index last year.

I am holding onto my $Palantir Technologies Inc.(PLTR)$ but there is a possibility of Palantir going down further if it failed to defense its support level.

If we looked at how the technical is playing out, it is trading below 12-EMA, and in the space between 12/26 EMA, so the defense would be at 26-EMA, this is the area where Palantir bulls might defend 66 dollars level, so if there is anyone looking to go into this AI analytics stock, you might want to look at the 66-67 level, if the bulls lose the support at 26-EMA level.

Economic Data Updates On Tuesday (07 Jan)

The Institute for Supply Management reported that its Services Index rose to 54.1. That topped the 53.2 expected and was higher than November's 52.1. A reading above 50 indicates that the services economy is generally expanding.

In addition, the Labor Department's Job Openings and Labor Turnover Survey, or JOLTS, showed 8.098 million job openings in November vs. the 7.65 million projected. It also exceeded 07 October's 7.744 million reading. Both reports pointed to a strong economy and dimming chances for additional interest-rate cuts.

S&P 500 Energy and Healthcare Sector The Only Gainers

Energy sector was up 1.06% after being boosted by $Devon(DVN)$ , it has stirred up excitement with the announcement of their fourth-quarter and full-year 2024 earnings release and conference call scheduled for February 18. The anticipation has led to a 3.1% increase in their stock price, with investors eagerly awaiting financial insights from the company.

The healthcare sector was helped by Moderna (MRNA) after its stock jumps amid bird flu vaccine hope after first U.S. death.

Information Technology was the biggest loser with losses clocked by Palantir -7.81% loss, Nvidia lost 6.22%, SMCI lost 5.68% and Broadcom also lost 3.29%.

Note Yield 10-Year At Its Highest Since 25 April

The 10-year Treasury yield added seven basis points to 4.685% to the highest since April 25. A pair of stronger-than-expected economic reports pushed bond prices lower.

2-year was also 1.07% higher to close at 4.29%.

Stocks To Watch

$Moderna, Inc.(MRNA)$ shares logged the S&P 500's best performance on Tuesday, soaring 11.7%. The Centers for Disease Control and Prevention (CDC) reported Monday that a patient in the U.S. had died after being infected with severe avian influenza A (H5N1), the country's first fatality from the virus commonly known as bird flu. Moderna is developing an experimental vaccine to protect against H5N1.

If we looked at MRNA currently, we have seen it moving above the 12-EMA, but we need to understand that it is in an inverse relationship, which could mean that MRNA need to make a significant upside to clear near towards the 50/200 MA level.

If the suspected virus situation for bird flu continue, we might see the need for vaccine to be developed, this mean other healthcare vaccine makes would benefit as well.

Shares of hospital operator HCA Holdings (HCA) gained 3.8% after analysts at Truist trimmed their price target on the stock but maintained their "buy" rating. The analyst team noted that, although a more cost-conscious dynamic within the government could weigh on healthcare services companies, the industry should see tailwinds from demographics, trends toward value-based care, and robust core demand.

Solar power stocks built on their hot start to 2025, becoming the latest industry to benefit from expectations for surging AI-driven power demand. The Invesco Solar ETF (TAN) was up 3% on Tuesday. Shares of panel manufacturer First Solar (FSLR) jumped 3.4%, while Enphase Energy (ENPH) shares powered 3% higher as the firm announced that its microinverters had been selected for a solar project at a radioactive waste facility in Belgium.

Summary

I think the market might still see profit taking as investors are worried about the lesser or no more rate cuts in 2025, as the latest economic data suggest economy is going strong.

As investors, if we looked at how the AI and technology stocks have been driving the stock market in 2024 even though we grappled with lack of rate cuts by Fed, we might looked at the potential of growth from these stocks.

I would be preparing myself to buy some more good quality stocks, which could be some upcoming growth stocks.

Appreciate if you could share your thoughts in the comment section whether you think market might continue to see profit taking and pullback continue.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.