Nvidia has corrected as much as 24.48% from its all-time high of $140.76. Its current price of $112.28 is still trading 20.23% lower than its all-time high. Why $106.30 Could Be the Interim Bottom for Nvidia? 1) 127.2% Fibonacci Extension Support Level: Fibonacci Extension suggests a major support level at $107.25 (127.2% Fibonacci level). Yesterday's intraday low hit this level and rebounded to $112.28, indicating that the 127.2% Fibonacci level may hold (see Graph 1). Source: Tiger Brokers 2) Doji Reversal: Yesterday's candlestick formed a classic single doji reversal pattern (see Graph 2). Source: Tiger Brokers 3) Closing the Gap: The low of $106.30 may represent bears trying to close the previous gap at $106.47 from May 24 (see Graph 2). 4) 38.2% Fibonacci Extension Level:
TSMC Fell 16% from ATH. Is TSMC Running Out of Steam?
TSMC has fallen 16.11% to $160.28 from its all-time high of $191.05. However, the year-to-date return of 54% suggests that TSMC is likely experiencing an overdue temporary correction rather than a long-term downtrend. What You Need to Know About TSMC: 1) US Wants Tougher Trade Restrictions on China The recent panic sell-off is mostly due to renewed trade tensions between the US and China. According to Bloomberg, the Biden administration is considering more restrictive trade policies on advanced chip technology to China, which will negatively impact companies like TSMC. Trump recently commented that Taiwan should pay the US for protection and claimed Taiwan has taken "about 100%" of America’s semiconductor business. China now accounts for 16% of TSMC's total net sales in 2Q2024, markin
Geopolitical Tension Should Not Be the Reason to Avoid ASML
ASML ( $ASML Holding NV(ASML)$ ) is currently trading 20.58% below its all-time high of $1098.95 and remains 2.55% higher than its previous low of $852.84. Key Points About ASML: 1) Lower Earnings Growth Due to Reduced EUV Deliveries, Expected to Change in 2H2024 Both sales and net profit beat street expectations: Net sales: €6.24 billion vs €6.03 billion expected Net profit: €1.58 billion vs €1.43 billion expected 2Q2024 sales saw a -9.55% YoY growth, while operating income declined -18.93% YoY. The primary reason for lower revenue/operating income growth is the reduced EUV deliveries in Q1 and Q2. Only 19 EUV systems were sold in Q1 and Q2 2024, compared to 31 during the same period last year. During ASML’s earnings call, CEO Christophe Fouq
US Market Insights (22-26 Jul): Fear Not, Market Corrections Are Common
Both the S&P 500 and Nasdaq 100 suffered a sell-off last week, ending with weekly losses of -1.95% and -3.98%, respectively. Major market movers last week included UnitedHealth (+10.52%), Berkshire Hathaway (+2.36%), Exxon Mobil (+2.47%), Nvidia (-8.75%), Microsoft (-3.62%), Amazon (-5.84%), Eli Lilly (-9.59%), AMD (-16.54%), and CrowdStrike (-17.87%). Important events this week include: Tuesday: Earnings reports from Tesla, Visa, and Alphabet Wednesday: PMI and ServiceNow’s earnings Thursday: GDP and unemployment claims Friday: PCE Things to Know Before Starting Your Week: 1) Rotation Will Continue but Likely Slow Down: Unlike the second week of July, which witnessed a broad-based rally, limited sectors benefited from sector rotations. Only "old economy sectors" s
Midweek Update: Why Are There Spiking Rate Cut Expectations?
Traders now expect 3 rate cuts by the end of 2024, compared to only 1 rate cut expected one month earlier. There is a 90% chance of a September rate cut, up from about 70% earlier, while the probabilities of rate cuts in November and December are above 50%. Other than softer-than-expected inflation data, I reckon a weaker-than-expected labor market is the key driver for spiking rate cut expectations. Source: CME Fedwatch Why might the labor market be weaker than expected? 1) April and May job numbers revised down sharply. The US labor market initially added 165K and 272K jobs in April and May respectively, but recently, the non-farm payrolls were revised down to 108K and 218K for those months. In other words, there were 111,000 fewer jobs in April and May than previously estima
US Market Insights (15-19 Jul): Stock Market May Rise on Trump-Win Bets
S&P 500 and Nasdaq 100 returned 0.89% and -0.29%, respectively, last week. Major market movers include Microsoft (-3%), Meta (-7.6%), Amazon (-2.76%), Alphabet (-2.9%), Netflix (-6.23%), Nvidia (+2.71%), Apple (+1.86%), Eli Lilly (+3.7%), and Home Depot (+7.53%). The main reason the S&P 500 still returned positively last week, despite major tech stocks suffering a sell-off, is due to broadening market breadth. 426 out of 505 stocks in the S&P 500 index returned positively last week. Important Events This Week: 15-18 Jul: Trump will speak at the Republican convention. Monday: Powell speaks, Goldman Sachs earnings. Tuesday: Retail Sales, earnings results of Bank of America and UnitedHealth. Wednesday: ASML’s earnings. Thursday: Unemployment Claims, earnings results of TSMC and
2Q 2024 Earnings Preview: Can AI Boost Tesla, Amazon, and Apple Earnings?
Synopsis: Are AI stocks trading at unreasonably expensive valuations? Could the upcoming earnings reports from Tesla, Amazon, and Apple boost their stock prices? What are the risks, given that their prices have soared from their 2023 lows? Please click here to access the webinar on July 16th at 7.30 pm.