18 Nov Market Buying Momentum Pick Up As Yields Decrease

The S&P 500 and NASDAQ rose Monday (18 Nov) with 0.39% and 0.60% gains respectively as the U.S. equities market rebounded from a sharp sell-off at the end of last week. 

Russell 2000 increased by 0.1%. DJIA slipped 0.1%. Stocks were coming off their worst weekly performance since early September, with the S&P 500 and Nasdaq Composite losing 2.1% and 3.2%, respectively, last week as the post-election rally that had boosted stocks to record highs lost steam.

Buy-the-dip interest following last week's consolidation supported the market's upward trend. Mega-cap stocks and semiconductor-related names significantly contributed to the index gains.

Nvidia (NVDA) was down 1.29%. The stock fell due to reports about potential overheating issues with its AI chips. Earnings are expected to be reported after Wednesday's close.

$Tesla Motors(TSLA)$ rose sharply by 5.62%, continuing its post-election rally. The surge was fueled by Bloomberg's report that the Trump administration might relax regulations on self-driving cars. Since 05 November, Tesla has risen by 37.8%, boosting the S&P 500 consumer discretionary sector by 0.9%.

Other mega-cap tech stocks were mostly higher, with Apple (AAPL) , Microsoft (MSFT), Alphabet (GOOGL) and Meta Platforms (META) all gaining ground while Amazon (AMZN) was down slightly. Apple has once again overtaken Nvidia as the world's most valuable company by market capitalization.

Among other noteworthy movers, $SUPER MICRO COMPUTER INC(SMCI)$ shares jumped 16%, leading S&P 500 and Nasdaq gainers, amid hopes that the beleaguered server maker would submit a plan for its delayed annual report that could help the company avoid a Nasdaq delisting.

Housing Market Index Rose

The November NAHB Housing Market Index rose to 46, surpassing the consensus of 43, up from 43 in October. Looking ahead, the October Housing Starts and Building Permits report is scheduled for release at 8:30 ET on Tuesday.

Treasury Yield Decrease Help Grow Buying Momentum

Initial market activity was slow, but buying momentum grew as Treasury yields decreased.

The yield on 10-year Treasurys, which is sensitive to expectations around interest rates, settled twelve basis points at around 4.409%, after rising as high as 4.49% earlier in the day.

The 2-year Treasurys also settled two basis points lower to 4.287%.

S&P 500 Energy Sector Led With Only One Sector In The Red

The energy sector led the market with a 1.0% gain, driven by rising commodity prices. WTI crude oil futures rose by 3.2% to $69.18 per barrel, and natural gas futures increased by 5.3% to $2.97 per mmbtu.

We saw ten out of 11 sectors closed higher than last Friday’s close, with two sectors (Energy and Communication Services) up more than 1%, this indicate that market is experiencing widespread buying interest.

The health care sector remained mostly unchanged, affected by Eli Lilly (LLY), which dropped 2.6% due to political developments regarding the nomination for Secretary of Health and Human Services.

Stocks To Watch

Bakkt Holdings (BKKT) saw a significant surge of 65% in its stock price amid reports of advanced acquisition talks by $Trump Media & Technology(DJT)$ . The all-stock deal, if finalized, would enhance Trump's influence in the crypto market, which has already seen Bitcoin (BTC-USD) rise over 30% post-election. Trump's ongoing involvement in the crypto space continues to stir investor interest and speculation about future regulatory changes.

$NVIDIA Corp(NVDA)$ and $Alphabet(GOOGL)$ are collaborating on quantum AI processors, with Nvidia's stock dropping 1.6% while Google's rose 1.3%. The partnership utilizes Nvidia's Eos supercomputer and Google's Quantum AI to advance quantum computing, emphasizing GPU-accelerated simulations' role in this technological leap.

As investors might grapple with Nvidia’s Blackwell overheating issue, but I hope we do understand that this is more of a design issue, because if we look at how NVDA is trading still above the short-term and long-term MA, and MACD is trying to make a potential crossover, though MTF is not showing any clear upward trend, but I still believe that NVDA still have room to move to create a new highs.

I would take this recent decline more as a consolidation before its earnings. I am holding onto my position in NVDA, as we can see the level to look out is $134.

GOOGL collaborating on quantum AI processors with NVDA would make their cloud offerings more appealing to consumers, we will need to see what new cloud offerings could come out from this collaboration, and this should continue to boost GOOGL as technical is showing that GOOGL still showing strong upward trend in MTF.

Though GOOGL is trading lower recently, we could see that it is still above the short-term and long-term MA, and we are seeing that MACD is making a crossover, so I will be watching closely on the price action for GOOGL for Tuesday (19 Nov).

Micron Technology (MU) ended a losing streak with a 1.21% gain, supported by strong fundamentals and promising product developments. Analysts maintain a 'Strong Buy' rating, citing growth in R&D and new product releases as key drivers for the stock's positive outlook.

Broadcom (AVGO) also rebounded, closing up 0.49% after a six-day decline. Analysts remain optimistic about its growth prospects, driven by AI demand and strategic acquisitions like VMware, which diversify its revenue streams.

$MicroStrategy(MSTR)$ announced plans to offer $1.75 billion in convertible senior notes to fund further Bitcoin acquisitions and other corporate needs. The notes, due 2029, are part of the company's strategy to leverage its position in the cryptocurrency market.

Coinbase Global (COIN) rose 6.8% as Trump met with CEO Brian Armstrong to discuss potential regulatory frameworks for cryptocurrencies. This meeting signals possible favorable regulatory changes under Trump's administration, boosting investor confidence in the crypto sector.

Summary

We should be seeing more obvious rotation out of technology stocks into crypto stocks, as we are seeing strength in crypto stocks trading.

We could be seeing buy-the-dip on some of the technology stocks for defensive and also investors might take advantage of the crypto stocks rise.

Appreciate if you could share your thoughts in the comment section whether you think market would give another strong buying momentum.

@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.