To The Moon

We saw the stock market get off with a mixed start, S&P 500 and NASDAQ was slightly up catalysed by the gains in mega cap and semiconductor stocks, yet we saw DOW get a slight decrease.

The actual momentum started in the afternoon session, we saw major indices closing near their session highs. This is because investors start to get away from the previous day's sell-off resulting in a rebound. This is also supported by the cooler-than-expected inflation data for March 's inflation data showed a month-over-month increase of 0.2%, lower than the 0.3% expected, while the Total Producer Price Index (PPI) accelerated to 2.1% from February's 1.6%.

Treasury Market Remained Calm

The 10-year note yield rise to

The Treasury market remained calm, with the 10-year note yield rising slightly to 4.58% and the 2-year note yield decreasing to 4.96%. A $22 billion 30-year Treasury bond reopening did not significantly impact the market.

Sector ETF Stellar Performance Drive Position Direction

Mega caps and semiconductor stocks significantly influenced the market's positive direction. The $Vanguard Mega Cap Growth Index Fund ETF Shares(MGK)$ saw a 1.6% increase, and the $Philadelphia Semiconductor Index(SOX)$ surged by 2.4%.

However, the financials sector underperformed, dropping by 0.6%, partly due to a decline in Morgan Stanley's shares following news of a federal investigation into its wealth unit.

Another ETF we could look at is $iShares Semiconductor ETF(SOXX)$ , as semiconductor stocks making their comeback, and there have been healthy competition among Nvidia, AMD and Intel for new chips leadership.

So the next leader would be determined more by how investors look at the stock with more potential to give value and returns back to investors.

If we looked at how SOXX have performed when market experienced a pullback when CPI is released, the buying sentiment from investors did not drop much, this could mean that whether inflation remains hot or cooling down, what is important is whether the stock could give value and returns back to investors.

$NVIDIA Corp(NVDA)$ might be a good buy now, since there is price correction experienced. $Taiwan Semiconductor Manufacturing(TSM)$ is another name not to be ignored as well.

Stable Labor Market Might Be Good News

The latest economic data revealed that weekly initial claims were at 211K, below the 218K consensus. Continuing claims were slightly revised to 1.817 million. The March PPI increased by a smaller-than-expected 0.2%, and the core PPI matched expectations at 0.2%. These reports suggest a stable labor market and a slight acceleration in year-over-year growth rates for PPI and core PPI.

Consumer Sentiment For April -> Stronger Inflation?

Friday's economic calendar includes data on March Import Prices, Export Prices, and the preliminary April University of Michigan Consumer Sentiment. Additionally, international markets showed varied performances, with European indices mostly down and Asian markets mixed. Commodity prices saw movements, with crude oil and natural gas declining, while gold and silver prices increased.

Summary

Looking at how market has reacted to both CPI and PPI economic data, it seem like market do cheer for cooler inflation after putting the anticipation of rate cut aside, mega cap and semiconductor stocks response positively to that sentiment.

I believe this sentiment would continue as we get more economic and labor data over the next few weeks, I will be adopting a semi defensive strategy for trading and investing in the shorter term.

Appreciate if you could share your thoughts in the comment section whether you think mega cap and semiconductor stocks would continue its performance ahead of more economic and labor data?

@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.