To The Moon

05 June 2024 stocks rallied and helped the S&P 500 (+1.2%) and Nasdaq Composite (+2.0%) to close at fresh all-time highs.

This surge was driven by Nvidia (NVDA) jumping 5%, taking its market value over $3 trillion. It is now the most valuable stock by market cap after Microsoft (MSFT). We also saw other mega caps and chipmakers contributing to the broader market's gains. Meta Platforms (META) went up by 3.8% and $Broadcom(AVGO)$ was up 6.2%.

Sector Performance - Semiconductor Biggest Winner

The Vanguard Mega Cap Growth ETF (MGK) settled 1.8% higher, and the $Philadelphia Semiconductor Index(SOX)$ saw a 4.5% gain.

Strength in these etfs helped the sectors in information technology up with 2.68%, communication services up 1.50% and consumer discretionary up by 0.67%. These joined industrials up by 1.00% at the leaderboard.

Semiconductor stocks surged on 05 June 2024 (Wednesday) was led by ASML Holding N.V. (ASML) and Taiwan Semiconductor Manufacturing Company (TSM), which rose 8% and 7%, respectively. The rally was fueled by news that ASML plans to ship its latest chip-making system to TSM and Samsung. Other semiconductor companies, including Applied Materials (AMAT), Lam Research (LRCX), and Broadcom (AVGO), also saw significant gains.

Market Broad Advance After Resilience To Sell-Off

Wednesday (05 June)’s broad advance saw many stocks participating after the market showed resilience towards the selling efforts happening earlier this week. The equal-weighted S&P 500 rose 0.6%, and market breadth favored advancers by a 2-to-1 margin at the NYSE.

Treasury Yields Drop Support Equities

A drop in Treasury yields again acted as support for equities today after limiting gains in recent sessions. Key yield movements included.

The 10-yr note yield was down 5 basis points to 4.29% and 2-yr note yield was down 4 basis points to 4.73%. These decline was after ISM Non-Manufacturing Index for May showed some deceleration in the Prices Index from April.

At time of this writing, we saw 10-yr note yield up by 19 points to 4.299 and 2-yr note yield up by 15 basis points to 4.743%.

Economic Data Signals Pickup In Manufacturing Sector

Weekly MBA Mortgage Applications Index came in at -5.2% with prior recorded at -5.7%. May ADP Employment Change was 152K compared to consensus at 175K, its prior revised to 188K from 192K.

May S&P Global US Services PMI - Final came in 54.8 with its prior at 51.3. May ISM Non-Manufacturing Index was 53.8% compared to consensus at 50.7%, its prior was 49.4%.

These data provided a key takeaway that signals a pickup in activity in the nation's largest sector with prices paid remaining elevated, albeit less so than the prior month. Most importantly, it is a report that does not command a rate cut soon.

Stocks To Watch

$NVIDIA Corp(NVDA)$ soared past a $3 trillion market cap on Wednesday, driven by excitement surrounding artificial intelligence. Shares climbed over 5% to close at $1,224.40. This milestone places Nvidia in an exclusive club, joining Apple (AAPL) and Microsoft (MSFT) in reaching such a valuation. CEO Jensen Huang announced upcoming AI accelerators and the Blackwell Ultra chip for next year, adding to the bullish sentiment. Nvidia also plans a 10-1 stock split this week, following last month's earnings announcement.

So how does NVDA looks like before its stock split? I have done a previous article providing the estimated price target, both have been met before the stock split, so what would be the new one?

If we were to look the price target from my supertrend, the first PT of $1,200 have been surpassed so I am looking at a new PT at $1,400.

$Lululemon Athletica(LULU)$ reported Q1 GAAP EPS of $2.54, beating estimates by $0.12, and revenue of $2.21 billion, exceeding expectations by $10 million. Comparable sales increased by 6%, and the company's gross margin rose by 20 basis points to 57.7%. However, the Q2 outlook fell short of consensus, with expected revenue between $2.4 billion and $2.42 billion, and diluted EPS forecasted to be between $2.92 and $2.97.

Look at my previous article where the earnings volatility suggest slight upside and LULU have surprised with much better earnings but Q2 outlook fell short of consensus.

Watch Out For Lululemon Approach To Overcome Low Sales, Not More Layoffs

Shopify (SHOP) extended its winning streak to seven consecutive trading sessions, closing at $61.26 on Wednesday. The stock has gained 6.35% over the past six days, buoyed by a recent upgrade from Goldman Sachs to Buy from Neutral. The analysts cited the company's marketing investments as a driver for future revenue growth, despite a year-to-date decline in shares.

Amazon (AMZN) is facing renewed labor challenges as the Amazon Labor Union has teamed up with the International Brotherhood of Teamsters. The partnership aims to strengthen negotiations for better pay and working conditions at the JFK8 warehouse in Staten Island. A vote to formalize the affiliation will occur in the coming weeks.

NIO (NIO) is set to report Q1 earnings on June 6, with analysts expecting a loss per share of $0.39 on revenues of $1.44 billion. Despite a challenging quarter, NIO recorded over a 200% year-over-year increase in vehicle deliveries for May.

$AMC Entertainment(AMC)$ shares rose over 8% following the company's annual shareholder meeting. Shareholders rejected the executive pay plan but approved an equity incentive plan for executives. The proposal to declassify the board of directors did not pass.

I think we need to ditch the meme stock label on AMC for now, it looks like AMC is capable of making higher move with news, and we could see that AMC have make a move of significant 8% after their annual shareholder meeting.

But will it continue to move upside, I am looking at MACD to show me a crossover.

Summary

We saw the power of Nvidia strength on the market again, Nasdaq was up 2% as Nvidia hits $3T market cap, and this has prompted me to look at its price target, I am expecting NVDA to go higher to near $1,400.

Appreciate if you could share your thoughts in the comment section whether you think market would continue the rally with strength from semiconductor and some mega cap stocks?

@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.