META charges ahead: Can it lift S&P 500 or vice versa?
Record breaking S&P ?
While doing my weekend readings and catch up, I could not help but noticed that most analysts were obsessed about the $S&P 500(.SPX)$ index performance, climbing to an all-time high.
It appears to me that Wall Street was hellbent to keep up the momentum to push the S&P 500 over the edge for a new record high.
To an equal extent, the Dow index was breaking record too but somehow its glory moments have been eclipsed by the S&P 500.
Positive Sentiments catalyst.
It definitely helped that the latest University of Michigan consumer sentiment survey released on Fri, 19 Jan 2024 showed a +13% jump in overall sentiment during the January month. (see below)
The index reading for the month came in at 78.8.
Making this the index highest mark since July 2021.
It was also well above economists' expectations of 70.1.
The cumulative +29% climb seen in the sentiment index over the past two months is the largest two-month increase since the US economy recovered from recession in 1991.
Analyst Joanne Hsu believed that the sharp increase in December 2023 was no fluke.
Consumers’ views were supported by:
Confidence that inflation has turned a corner.
Strengthening income expectations.
Coupled with the investors’ return to the market in full force after fleeing for the past few sessions, led the market to close higher.
By the time Friday trading was over: (see above)
Dow gained +1.05% to settle at 37,863.30.
S&P 500 rose +1.23% to close at 4,839.81.
Nasdaq tech-heavy Composite was the biggest winner, rising +1.7% to close at 15,310. It is slowly but surely inching its way up to its record-close of 16,057, reached on November 2021.
Burning questions.
(1) Going into week 4 of January 2024, will Wall Street and investors alike be able to sustain the S&P 500 upwards trajectory?
(2) Will this week’s Quarterly earnings have what it takes to fuel all 3 Composite indexes to the new record high so desired? (see below)
(3) Pre-market indicators for Mon, 22 Jan 2024 seems to indicate so. (see below)
In the Artificial Intelligence race, Semiconductors seemed to be hogging the limelight and as a result, their stock prices have rocketed to new heights even when market was consolidating. The likes of $NVIDIA Corp(NVDA)$, $Advanced Micro Devices(AMD)$ and comeback kid Intel Inc (INTC) comes to mind - agree?
Technology companies was next in line to benefit. Needless to say companies like $Microsoft(MSFT)$ and Amazon (AMZN) are also gunning for the moon recently. However they have been “affected” by market pullback marginally.
Of late, Internet content providers are gaining tractions in the AI-sphere. I supposed when we talked about AI, it is “difficult” to imagine how and where AI could be deployed to further drive content to the consumers without being “intrusive”.
$Meta Platforms, Inc.(META)$ of late is gathering pace as well in its quest for all things AI.
Shares of the social networking company rose +1.5% to a new record high as CEO Mark Zuckerberg doubled down on the strategy to focus on AI.
He announced an expansion of its AI infrastructure Thu, 18 Jan 2024, with plans to build Meta's own artificial general intelligence (AGI). (see above)
Meta seeks to build out massive compute infrastructure to help support its generative AI (Gen AI) ambitions, including the latest version of its open source Llama LLM.
In a statement on Instagram and Threads platforms, Zuckerberg said that Meta will bring its AI research team ‘closer together’ and that it was building out its compute infrastructure to support its future roadmap, which includes a further push into AI.
All socializing seems to pay off as Meta’s YTD stock price has been on a tear. (see below)
In 2024, Meta bottomed at $344.47 on 03 Jan 2024.
It has since been climbing higher and higher steadily.
As of Fri, 19 Jan 2024, Meta has gain +10.73% — closing at $383.45 per share.
Going into week beginning 22 Jan 2024, Meta is poised to rise higher, opening at $386.36 per share.
As one of the top 10 stocks in the S&P 500 composite index, gains from this social media conglomerate will add as catalyst to fuel the Standards & Poor index to break new highs.
Conversely, will the rise in S&P 500 index fuel Meta’s growth in return?
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