To The Moon

• S&P 500 and Nasdaq-100 returned 1.62% and 3.5%, respectively, last week.

• The outperformance was mainly contributed by share spikes in companies like Apple (+7.92%), Nvidia (+9.1%), and Broadcom (+23.35%).

• Important events this week: Retail Sales on Tuesday, US Juneteenth holiday on Wednesday, unemployment claims on Thursday, Manufacturing PMI and Quadruple Witching on Friday.

I remain optimistic about the US equity market this week for the following reasons:

1) International funds continue to flood into the US market:

Over the past month, approximately $30 billion of new money has poured into stock funds, with 94% of the allocations favoring US assets, particularly tech shares, according to EPFR Global data compiled by TD Securities.

2) Softer-than-expected inflation data:

Despite the Fed dot plot showing that Fed members predict only one rate cut this year, softer-than-expected CPI and PPI data pushed US stocks higher last week. Wall Street now anticipates softer PCE data to be announced at the end of June. Futures traders predict two rate cuts this year, in September and December, according to CME FedWatch.

3) Potential for more stock splits:

Broadcom just announced a 10-for-1 split following Nvidia. Nvidia rose 27% before its stock split ex-date, and market participants expect Broadcom to potentially enjoy a rally driven by the stock split. We may see a stock-split frenzy as this is one of the easiest ways to potentially drive up stock prices. Potential candidates for future stock splits include Chipotle $Chipotle Mexican Grill(CMG)$ (stock: USD 3271.11), Meta $Meta Platforms, Inc.(META)$ (stock: USD 504.16), SMCI $SUPER MICRO COMPUTER INC(SMCI)$ (stock: USD 844.54), Lam Research $Lam Research(LRCX)$ (stock: USD 1,035.98), and Netflix $Netflix(NFLX)$ (stock: USD 650.06).

You may refer to an example of Aggressive Equity Portfolio below.