To The Moon

Ahead of the holiday on Wednesday (19 June 2024), the U.S. market saw the S&P 500 and Nasdaq Composite extended their record highs. Do note that bond and equity markets are closed Wednesday for Juneteenth.

There was not a lot of conviction from either buyers or sellers ahead of the break, as stocks continue to hit all-time highs. Advancers had a 4-to-3 lead over decliners at the NYSE, while decliners led advancers by the same margin at the Nasdaq.

Wedbush Securities' Dan Ives predicted that the ongoing bull market in U.S. technology stocks will continue until possibly 2027. The S&P 500 Information Technology sector has climbed approximately 31% this year, driving the broader market's performance.

Top-Weighted S&P 500 Components Closed With Losses

We saw many top-weighted S&P 500 components closed with losses, keeping the broader market in check. Significant losers include names like

Apple (AAPL) closed at $214.29, down by 1.1%. Microsoft (MSFT) closed at $446.34, down by 0.5%. Meta Platforms (META) closed at $499.49, was down by 1.4%.

Nvidia Provide Solid Gains On Collaboration News

Market have some offsetting support with $NVIDIA Corp(NVDA)$ solid gains of 3.5% to close at $135.58. Nvidia responded well to the news of collaboration between Deloitte, Hewlett Packard Enterprise (HPE) at $21.84, up 1.4%, and NVIDIA on co-developed generative AI solutions.

Nvidia (NVDA) insiders reportedly sold shares worth over $700 million so far this year. The value of shares sold was significantly higher compared to previous years, driven by a nearly 177% jump in Nvidia stock over the past year. CEO Jensen Huang was among the executives who sold shares, with his most recent sale amounting to over $31 million in June.

Nvidia (NVDA) agreed to acquire Shoreline.io, a startup for software developers, in a transaction valued at about $100 million. This acquisition aligns with Nvidia's strategy to expand its capabilities in AI and software development.

Information Technology Sector Best Performer Again

The S&P 500 information technology sector was up by 0.61% as it was boosted by gains from HPE and NVDA on the collaboration news. This helps the sector toward the top of the leaderboard on Tuesday (18 June 2024).

Financial sector turned out to be another top performer after gartnering 0.55%. But the consumer discretionary sector was among the top laggards, dropping 0.4%, due in part to weakness in homebuilder stocks after Lennar (LEN) at $148.72, down 5.0%, reported earnings. Selling in the stock was related to a disappointing outlook for a sequential decline in orders.

Note Yield Settled Lower

Treasury yields moved lower today. The 10-year note yield settled six basis points lower at 4.22%, and the 2-year note yield declined six basis points to 4.70%.

This price action followed a batch of mixed economic data, including weaker-than-expected retail sales, stronger-than-expected industrial production, and in-line business inventories. Treasuries also reacted to today's impressive $13 billion 20-year bond reopening.

Consumer Spending Slows But Manufacturing Strength Support Gains

The May Retail Sales came in at +0.1% with consensus of 0.3%), the previous was revised to -0.2% from 0.0%. May Retail Sales ex-auto was reported to be at -0.1% with consensus of 0.2%), the previous was revised to -0.1% from 0.2%.

These data are showing that consumer spending on goods are facing some slowness, this will have some effect on the weaker Q2 real GDP forecasts.

The May Industrial Production came in at +0.9% with the consensus at 0.4%), the previous remains at 0.0%. May Capacity Utilization was higher at 78.7% than the consensus of 78.5%) while the previous was revised to 78.2% from 78.4%.

April Business Inventories remained the same +0.3% as the consensus at 0.3%) with the previous standing at -0.1%.

Significant strength seen in manufacturing output help to mitigate hard-landing concerns, this helps to provide widespread gains across major market groups.

Weekly Mortgage Application Index On Wednesday Holiday

Though market is closed for holiday on Wednesday (19 June), we are expecting the release of the weekly MBA Mortgage Applications Index at 7am Eastern Time and the June NAHB Housing Market Index at 10am Eastern Time.

Stocks To Watch

Nvidia (NVDA) reached a value of $3.3 trillion on Tuesday, surpassing Microsoft (MSFT) and Apple (AAPL) to become the highest valued company in the world.

Shares of Nvidia have surged as much as 180% year-to-date and over 200% in the last 12 months, driven by a significant demand for its AI chips. Nvidia’s market cap has risen more than tenfold in the past four years, from around $323.24 billion in 2020 to $3.32 trillion at present.

Interactive Brokers (IBKR) reported heavy trading activity in Nvidia (NVDA) following the AI chipmaker's recent stock split. Nvidia had grossed 571.3K trades across its stock and options over the past five trading sessions, outpacing Tesla (TSLA) activity. The stock split and a surge in demand for AI technology have contributed to Nvidia's dominance in the market.

If we looks at the technical indicators, we could see that NVDA buying strength is getting stronger and the movement in KDJ did suggest that it is trying to make an upside move on the J value as well.

The rise in J value normally mean that the stock is going to make another new high.

$MasterCard(MA)$ declared a quarterly dividend of $0.66 per share, maintaining its forward yield at 0.59%. The dividend is payable on August 9 to shareholders of record as of 09 July 2024.

$Netflix(NFLX)$ shares continued their upward trend, closing 1.5% higher at $685.7 on Tuesday. The stock has gained nearly 5% over the past six sessions and is up 10% over the past month.

If we looked at how NFLX have been trading over the last few session, the demand (buying) strength is not decreasing and it is growing. With KDJ as confirmation, it looked like NFLX is still making an upside movement.

I would think that there is another few sessions of upside, so can consider to take a position for a small gains.

Summary

Market rally looked like it would be continuing with only a few mega tech stocks, but I personally feel that there might be some profit taking coming after the holiday.

The names worth watching would be $Broadcom(AVGO)$ , $Taiwan Semiconductor Manufacturing(TSM)$ , Nvidia and Netflix.

Appreciate if you could share your thoughts in the comment section whether you think stock market would experience some selling due to profit taking after the holiday on Thursday (20 June).

@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.