Not Much Conviction On Last Week Final Session Though Indices Gains

On last Friday (07 June), the final session of last week did not show much conviction on either side of the tape, this is despite seeing gains in the major indices through the session.

An underlying negative bia drove last Friday’s movement. The market breadth favored decliners by nearly 3-to-1 at the NYSE and by 8-to-3 at the NASDAQ.

Treasury Yield React With Sharp Jump to Downside Market Bias

Because of the sharp jump in market rates, we saw downside bias responding. The 10-yr note yield settled 15 basis points higher on Friday, and eight basis points lower this week, at 4.439%. The 2-yr note yield jumped 15 basis points on Friday leaving it two basis points lower on the week, at 4.897%.

The price action in Treasuries followed the May Employment Situation Report, which showed higher-than-expected payroll and earnings growth.

Only Four S&P 500 Sectors Closed Higher

Despite economic report and the jump in market rates, stocks held up well. This is largely due to ongoing resilience to selling efforts. The equal-weighted S&P 500 closed 0.3% lower, and the market-cap weighted S&P 500 fell 0.1%.

Four of the S&P 500 sectors closed higher, led by financials (+0.35%) and information technology (+0.20%). The utilities (-1.1%) and materials (-1.01%) sectors logged the largest declines.

In other news, GameStop (GME, Financial) shares plunged 36.0% to 29.31 following a disappointing fiscal Q1 earnings report and the company's filing to sell up to 75 million shares of Class A common stock. Selling increased after "Roaring Kitty" livestreamed on YouTube on Friday (07 June)

Treasury Market's Knee-Jerk Selloff

The key takeaway from the report is the Treasury market's knee-jerk selloff, indicating that the Fed's inflation concerns won't be placated by this release.

Stocks To Watch

$NVIDIA Corp(NVDA)$ has officially announced its 10-1 stock split, which will take effect on 07 June. Trading on a split-adjusted basis will commence on 10 June. This move follows Nvidia's strong fiscal first-quarter results and reinforces investor confidence in the tech titan. Nvidia shares closed at $1,208.88 on Friday, down 0.1%.

We could still see some stock price for Nvidia adjusting downwards after the stock split start trading, so I personally think that this might be a time to look at loading more.

Keith Gill, also known as Roaring Kitty, made a return to YouTube with a livestream after a three-year hiatus. This event coincided with $GameStop(GME)$ reporting its Q1 earnings and revealing plans to potentially sell up to 75 million shares. Gill expressed continued confidence in GameStop's potential for reinvention under Ryan Cohen's leadership, despite acknowledging the risks involved.

If we looked at how GME earnings move during its last report, we could see that it did not create too much movement, but this time might be different, there might be some more downside, as we should be seeing adjustment to around $20, then we would see the hype and sentiment to increase the demand (buying) and push up the price.

$Alphabet(GOOGL)$ will avoid a jury trial in an antitrust case filed by the U.S. Justice Department regarding its digital advertising dominance. By agreeing to pay $2.3 million to cover the federal government's claim of monetary damages, the trial will now be heard directly by a judge. The case is set to begin on September 9.

This should be a good news for Google , and this should bring back some positive sentiment for GOOGL to push up its stock price.

We should be seeing some demand (buying) action increased today (10 June 2024).

Summary

This week we need to be aware of the Fed, CPI, PPI and University of Michigan consumer sentiment index. Not forgetting the Apple major event and Nvidia trading after its stock split.

So this week would be filled with some exciting opportunities and also soe data and challenge to look forward to.

Appreciate if you could share your thoughts in the comment section whether you think market would continue a negative bias this week with cautious trading ahead of CPI and PPI data release?

@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.