Last Week's Recap
The US Market - Three major indexes hit highs
The stock market rally saw the major indexes hit record highs as the Federal Reserve stuck to its dovish rate-cut projections while Nvidia (NVDA), Broadcom (AVGO) and Microsoft (MSFT) had well-received AI events.
The Dow was up 2% for its best week since December to its record session. Goldman Sachs (GS), Salesforce (CRM) and Home Depot (HD) are the best weekly performers in the index, with gains of about 5%.
The central bank left rates unchanged, and commentary from Fed Chair Jerome Powell maintain expectations for three cuts this year despite a recent spate of hot inflation reports.
Societe Generale joined other Wall Street firms in raising its year-end forecast, to 5,500, citing the contributions AI will make to corporate profits.
The IPO window cracked open with investors two most hyped the market as Reddit (RDDT) and Astera Labs
The US Sectors & Stocks - Big week for tech Reddit and Astera were bullished
All 11 S&P 500 sectors closed the week higher, with the communication services sector being the top performer, followed by the industrials sector and technology sector.
The blowout run in semiconductor stocks is putting the VanEck Semiconductor ETF -SMH is up about 30% since the start of the year. The ETF is headed for its fifth consecutive winning month.
Nvidia (NVDA) detailed its next-generation AI computing platform, Blackwell, at its GTC 2024 conference. UBS analysts raised their price target on the chip maker to $1,100 from $800. NVDA was up 7% for the week.
Broadcom (AVGO) surged nearly 10%, after the company announced that it has signed a new customer for its AI chip business, which makes application-specific integrated circuits, or ASICs. Broadcom already makes custom AI chips for Google and Meta Platforms.
The Justice Department accused Apple (AAPL) of violating antitrust laws with its restrictive iPhone and App Store policies. Apple pushed back on the notion that the iPhone is a monopoly or that it had abused its position. AAPL lost 4% on Thursday.
Microsoft (MSFT) introduced its first AI PCs and promoted its Copilot artificial intelligence services at a digital event that proclaimed a "new era of work." Microsoft stock popped to a record high.
Tesla (TSLA) has reduced electric-vehicle production at its plant in China, according to Bloomberg. Tesla earlier this month instructed employees at its Shanghai facility to lower production of both the Model Y sport-utility vehicle and Model 3 sedan by working fewer days a week.
Memory-chip maker Micron Technology (MU) crushed Wall Street's targets for its fiscal second quarter with a surprise profit. It also guided well above views for the current quarter, citing a sales boost from artificial-intelligence infrastructure spending. MU jumped 18% for the week.
Lululemon (LULU) plunged 13% after the athleisure retailer guided low on Q1 revenue, despite it beating on both EPS and revenue for Q4 2023.
Nike (NKE) plunged on Friday as it gave a weak outlook for the full year and reported that sales in China have been slowing.
Digital World Acquisition (DWAC) fell 14% after the blank check company's shareholders approved a merger with the social media company owned by former President Donald Trump.
Astera Labs (ALAB), which sells data center connectivity chips to cloud and AI infrastructure companies, soared 72% in its Nasdaq debut, closing at $62.03. That gives Astera a market cap of close to $9.5 billion. The company founded in 2017 by former Texas Instruments executives, Astera counts Nvidia, AMD, and Intel among its customers. It’s also selling heavily to Amazon. As of the end of last year, Amazon controlled 232,608 shares, according to a securities filing.
Reddit (RDDT) popped 48% in Thursday's debut to close at $50.44. The social media platform priced its IPO at $34, with a valuation of $6.4 billion. However, it fell 8.8% to $46 on Friday, still a 35% gain from the IPO price.
FedEx (FDX) soared 12%, as the shipping giant narrowed its full-year earnings target, above analyst consensus, amid ongoing cost cuts. The company also announced a $5 billion buyback, in addition to $600 million remaining on a current program.
Chipotle Mexican Grill (CMG) said it plans a 50-for-1 stock split, pending shareholder approval in June. Shares hit a record high above $3,000.
Super Micro Computer (SMCI) priced a 2 million share public offering at $875 a share.
Pinduoduo (PDD), parent of Temu, reported a 107% EPS gain with revenue up 123% to $12.52 billion, both easily beating. PDD surged as much as 15% Wednesday, but slashed gains and kept falling, losing ground for the week.
Hong Kong Market - Tencent boosts its share buyback after weaker-than-expected results
The Hang Seng Index declined 1.32% to close at 16,499.47, after disappointing earnings from bellwether companies and the breach of a key support level by the yuan. The Tech Index slumped 2.65%.
Tencent Holdings (700.HK) decided to significantly boost share buyback after it posted weaker-than-expected revenue in the end of last year. Tencent intended to repurchase more than HK$100 billion (US$12.78 billion) in the year 2024. Tencent’s revenue for the quarter ended December31 gained 7% year-over-year (YoY) to RMB155.2 billion (US$21.6 billion), missing analysts’ projection of RMB157.4 billion. Net income in the fourth quarter also fell short of expectation of RMB33.3 billion as it plummeted 75% YoY to RMB27.025 billion.
Li Auto (LI / 2015.HK) slashed its Q1 delivery outlook by 24% on sluggish demand for its first pure electric vehicle, the pricey Mega minivan. LI tumbled over 18% in its Hong Kong shares.
XPeng (XPEV / 9868.HK) reported a smaller-than-expected fourth-quarter loss. The EV maker guided Q1 deliveries of 21,000-22,500 electric vehicles, below the expected of 25,000. Alibaba sold its XPEV positions. The shares fell over 8%.
Singapore Market - STI was up 1.42%
The Straits Times Index (STI) was up 1.42% for the week to close at 3,217.97, after the US benchmark to hit record-setting exuberance.
SingPost is looking at divesting its non-core assets, including its flagship retail-commercial mixed development SingPost Centre at Paya Lebar Central. Floating its Australian business is another option that has stemmed from its strategic review.
Singapore Airlines (SIA) carried 3.1 million passengers on a group level in February, up 28.2% from a year ago.
Australian Market -ASX 200 was up 1.31%
The ASX 200 index weekly gained 1.3% after plenty of hectic trading around a raft of central bank meetings.
A weaker oil price sent local oil stocks down after a stronger US dollar sent oil prices lower. Oil and gas major Woodside Energy (ASX: WDS) was a big influence. It was a similar story for the big miners.
Another downward influence on the market was an easing in the gold price to US$2,180 an ounce after it set a record high which had an outsize effect on the share prices of many gold miners.
The Week Ahead
Macro Factors - Inflation data highlight the short trading week
Wall Street is heading into the final trading week of March with momentum on its side. The week's key highlight on Friday with financial markets closed for Good Friday when the February Personal Consumption Expenditures (PCE) price index is released.
This report contains "core" PCE inflation, the Fed's preferred measure. Economists expect "core" PCE inflation rose 0.3% over the prior month in February and 2.8% over the prior year. That would match the January reading.
The dominance of the largest technology stocks, deemed the “Magnificent Seven,” in this Wall Street rally has led to worries about valuations and has drawn more than one comparison to the tech bubble of 1999. But a closer look at those companies, ranging from Amazon to Microsoft to Nvidia, can also lead to another, possibly unexpected, conclusion: Only a handful of stocks with sky-high price-to-earnings ratios have led the market to new highs, the earnings effect of those companies has also been significant and looks to be getting bigger.
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