To The Moon

First trading session of Q3 have closed with pretty positive gains, with Dow Jones Industrial Average managed +0.1%, S&P 500 have a +0.3%, and Nasdaq Composite closed with +0.8%.

With this gains, it has helped NASDAQ to a new all-time high, mainly driven by the mega-cap having outsized gains.

Monday Trade Was Driven By Underlying Negative Bias

Monday’s trade was driven by an underlying negative bias, with declining counters leading advancing counters by a 2-to-1 margin at the NYSE and 3-to-2 at the NASDAQ.

The equal-weighted S&P 500 logged a 0.8% decline, the Russell 2000 registered a 0.9% loss, and the S&P Mid Cap 400 fell 1.0%.

Jump In Treasury Yields Trigger The Downside Bias

With ISM Manufacturing index for June came in below the consensus, treasury yields managed to show a jump, the jump trigger a downside bias.

The 10-yr note yield settled 12 basis points higher at 4.463% and the 2-yr note yield jumped four basis points to 4.766%.

Mega Cap Help S&P 500 Information Technology Sectors To Upside

On Monday (01 July) we saw the S&P 500 cyclical sectors like Materials sector losing -1.6%, Industrials sector losing -1.1%, they are the biggest losers for the day.

Rate-sensitive real estate sector also lost -1.0%) and Utilities sector lost -0.7%. Top performing sectors from information technology with +1.3% gain, followed by consumer discretionary with 0.7% gain and financial sector also managed to get +0.2%.

Mainly we saw mega cap stocks like Apple, Amazon, Microsoft and Tesla, $Tesla Motors(TSLA)$ was up by 6.1% after solid June deliveries from Chinese EV makers released before Tesla own Q2 deliveries report on Tuesday (02 Jul).

Apple (AAPL) was up 2.9%, followed by Microsoft (MSFT) getting 2.2% gains and Amazon (AMZN) also fare well with a 2.0%.

Significant Data Signal Subdued Activity For Slowing Economy

June ISM Manufacturing Index came in at 48.5% with consensus at 49.1% while the previous stand at 48.7%. The key takeaway from the report is that each component remained in a state of contraction -- except prices, which slowed from the prior month -- signaling a state of subdued activity for the manufacturing sector that fits with a slowing economy.

May Construction Spending came in -0.1% with consensus at 0.1% while previous was revised to 0.3% from -0.1%. The key takeaway from the report was the drag in private residential spending driven by a decline in new single-family construction at a time when overall housing inventory has been constrained due to a lack of inventory for existing homes.

June S&P Global US Manufacturing PMI reported with final at 51.6 and the previous at 51.7, representing a dip of 0.1.

Tuesday JOS (May Job Openings Report) To Watch

The economic data to look out on Tuesday (02 July) is the May job openings report with the previous figure standing at 8.059 million. It is expected to come in at 10am Eastern Time.

Based on what we have seen with past job openings report, we could be expecting lot of the focus will be on the job market, as the economy enters the second half of the year with slowing growth and inflation.

Stocks To Watch

Morgan Stanley raised its earnings estimates and price target for $NVIDIA Corp(NVDA)$ due to "robust" data checks from Taiwan and China. The firm remains confident about Nvidia's near-term performance, despite acknowledging that the current Hopper cycle is nearing its end.

From the technical, we are still seeing a downside trend from MACD and KDJ, and there is no clear signs that Nvidia will be making any potential upside from MACD.

With KDJ declining on the J value, though it is picking up, but not strong enough, we might see that the current selling stop, then we could be talking about a possible upward move.

Wells Fargo added Tesla (TSLA) to its Q3 Tactical Ideas List, predicting a near-term decline. The firm expects declining delivery growth due to lower demand and diminishing returns from price cuts, estimating a 14% year-over-year decline in FY24 deliveries.

Ahead of Tesla’s deliveries report due on Tuesday (02 Jul), with this decline anticipation from Wells Fargo, we might want to take a look at how market perceive Tesla.

From the MACD and KDJ, Tesla is poised to make a quite stable upside movement, with MACD making an upward move and though KDJ does show signs of declining but based on past pattern, it tend to recover to the upside.

But I would still suggest that we do monitor closely especially after Tuesday Tesla deliveries report.

$Datadog(DDOG)$ continued its upward trend, closing 0.6% higher at $130.5. The stock has gained more than 10% in the last six sessions and is up 12% over the past month. Analysts remain cautiously optimistic about the company's future performance.

This is one of the software I have been using for monitoring our infrastructure security, I would say that there might be some potential as cyber security is getting more and more noticed, as to what analyst have mentioned, there is concerns of competitions with other much famous names.

But from the technical, market seem to be interested in this stock, judging from how MACD is showing a nice upside move, there seem to be potential continued upside.

With KDJ making an upside potentially though J value is not on the high side, I would continue to monitor the price action for DDOG.

Summary

We might still see the underlying negative bias driving the trade on Tuesday (02 July), especially with the May Jobs Openings report coming in at 10am eastern time, we might see some strength from the mega caps again, one of them to watch is Tesla.

The deliveries report for Tesla would be in focus, especially how its sales do in China, and this should give a glimpse on where Tesla stands in this important EV market.

Appreciate if you could share your thoughts in the comment section whether you think mega cap would still help to push the indexes on the high side?

@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.