To The Moon

Last Week's Recap

The US Market - The S&P 500 and Nasdaq set record highs

• The stock market saw fresh record highs on the S&P 500 and Nasdaq during the holiday-shortened week, as the latest jobs report reignited hopes for rate cuts from the Federal Reserve.

• The S&P 500 registered its 34th record close in 2024 with a 16.7% year-to-date, while the Nasdaq’s year-to-date gain is 22.3%.

• Widely monitored labor data reflected a 206,000 increase in nonfarm payrolls in June, but a slight uptick in the unemployment rate, which rose to 4.1%, slightly higher than the expectation of 4%.

• Treasury yields fell following the Jobs report. Investors hiked their bets on a September interest rate cut, according to the CME FedWatch Tool.

• Small-cap stocks have underperformed for the week, with the small cap-focused Russell 2000 dropped 1%. With that, it is now lower by 0.2% on the year.

The US Sectors & Stocks - TSLA turned into positive territory for 2024

• The technology and communication services sectors led the S&P 500 up again, with 3.4% and 2.3% increases, respectively. While the healthcare and industrial sectors lagged.

• Apple (AAPL) advanced 7.5% for the week, while Microsoft (MSFT) rose by 4.6%. Both of them ended at record highs. The two largest market caps helped bolster the benchmark and the technology sector hit record highs.

• Tesla (TSLA) skyrocketed 27% for the week, continuing a powerful run with second-quarter deliveries of 443,956, well above analysts' lowered expectations. Production came in at 410,831, letting Tesla reduce inventories. Tesla also said it deployed 9.4 gigawatt-hours (GWh) of energy storage products, more than doubling Q1's record of 4.053 GWh. TSLA shares turned into positive territory for 2024.

• Nvidia (NVDA) got a downgrade on valuation concerns after its big rally. New Street Research analyst Pierre Ferragu downgraded the AI-focused chipmaker to neutral from buy, writing that the stock has finally run out of room to push higher. New Street set a one-year price target of $135 for NVDA, compared with its Friday close of $125.82. Jensen Huang sold nearly $60 million worth of shares in early July.

• Amazon (AMZN) ticked up 3.5% and closed at $200 last week. The share price climbed 32% in 2024. Despite Jeff Bezos filing plans Tuesday of his intent to sell 25 million of his Amazon shares worth more than $4.9 billion at the time of the filing.

• Meta Platforms (META) also scored an all-time closing high, gaining around 7% despite European regulators saying the social platform violates digital competition rules.

• Crypto-related stocks were shocked as Bitcoin and other cryptocurrencies were dragged lower by the pending refund of assets from the collapsed Mt. Gox crypto exchange.

• Macy's (M) gained 9.5% to $19.64 on Friday, after The Wall Street Journal reported investment firms Arkhouse Management and Brigade Capital Management raised their bid for the retailer to roughly $6.9 billion, or $24.80 per share.

• President Joe Biden and Sen. Bernie Sanders, in a joint op-ed Tuesday called out the drug giants for the "unconscionably high" prices of their diabetes and weight-loss drugs. As a result, Eli Lilly （LLY) and Novo Nordisk (NVO) retreated. Later in the day, Eli Lilly won Food and Drug Administration approval for its Alzheimer's treatment donanemab, now called Kisunla. Then, LLY erased weekly losses.

• Rivian (RIVN) jumped 10% for the week, as it reported Q2 deliveries of 13,790 EVs and reaffirmed full-year production guidance of 57,000. Meanwhile, reports emerged that Volkswagen and the EV startup are already discussing expanding their partnership from primarily software to also include hardware and joint production.

Hong Kong Market - HSI rose 0.46%

• Hong Kong stocks rose as risk appetite crept back into markets following soft US data and dovish Federal Reserve comments on inflation. The Hang Seng Index was up 0.46% to 17,799.61.

• Chinese EV market continues to rebound from a soft start to the year on the back of subsidies, discounts and incentives. BYD (1211.HK), Nio (9866.HK) and Zeekr (ZK) achieved record quarterly deliveries on Q2. Li Auto (LI) and XPeng (XPEV) also reported higher second-quarter sales.

• Chinese EV makers fell as the European Commission’s additional duties on Chinese EVs. Geely and Li Auto led retreats on Friday.

Singapore Market - STI added 2.34%

• The Singapore stock market added 2.34% last week. Singapore's retail sector rebounded in May, posting a 2.2% year-on-year growth in the retail sales index, reversing the 1.2% decline in April, powered by higher motor vehicle sales.

• Singapore’s largest bank DBS Group will for the first time custody stablecoin reserves and offer related cash management services, in a tie-up with the local unit of cryptocurrency issuer Paxos Trust Co.

Australian Market - ASX was up 0.7%

• The Australian share market marked time as the dominating miners and banks once again ignored positive offshore leads and lost value. The benchmark ASX 200 index finished the week up 0.7% to 7822 points, with coal and gold stocks being two of the bright spots.

• The big banks were mostly weaker, with National Australia Bank (ASX: NAB) shares shedding 2.5% to $35.33 while the big Kahuna and one of the past financial year’s top performers, Commonwealth Bank (ASX: CBA) saw its shares slide 0.22% to $127.10.

• A 2% drop in iron ore futures was the culprit, sending BHP (ASX: BHP) and Rio Tinto (ASX: RIO) down. While defensive stocks continued to work well as a safe haven with the healthcare sector up 0.7% courtesy of solid gains from the heavy hitters.

The Week Ahead

Macro Factors - June CPI on focus

• A reading on inflation and the start of second quarter earnings reports will greet investors.

• Thursday's inflation report is expected to be the main event for U.S. markets during a busy week. Economists polled by The Wall Street Journal expected headline inflation to slow to 3.1% year-over-year in June, from 3.3% in May, while core inflation, a more closely watched measure that strips out volatile food and energy costs, is expected to remain steady at 3.4%.

• Semiannual testimony from Federal Reserve Chair Jerome Powell before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday will also be a key focus for investors.

• Investors will also parse through Friday’s producer price index, which bolstered equities last month after the most recent reading showed unexpected signs of disinflation.

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Earnings

• Earnings season is upon us again, and Financials sector (XLF) will be in particular focus over the next two weeks. 40% of the S&P 500 companies set to report over that period will be from the sector, according FactSet. The sector isn't expected to be a leader in earnings growth this quarter, with analysts forecasting 4.3% year-over-year earnings growth in Q2. This places Financials seventh among the eleven sectors in the S&P 500 for earnings growth.

• Consensus forecasts are for the S&P 500's earnings to grow 8.8% against the year prior in the second quarter, according to FactSet. This would mark the highest year-over-year earnings growth for the index since the first quarter of 2022.

• Friday morning will see some of America's largest financial institutions, including JPMorgan (JPM), Wells Fargo (WFC), and Citi (C), kick off second quarter earnings season. Results from PepsiCo (PEP) and Delta Air Lines (DAL) will also be in focus earlier in the week.

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