To The Moon

08 July 2024 Monday trading session ended somehow mixed with S&P 500 and NASDAQ closed at new record highs with +0.1% and +0.3% gains respectively.

We also saw the Russell 200 closed with a +0.6% gain while DJIA declined with 0.1%. Despite that, S&P 500 and NASDAQ has lackluster showing with mega cap stocks giving mixed price action. However, throughout the session, the overall vibe was positive.

Advancers led decliners by an 11-to-10 margin at the NYSE and by a 4-to-3 margin at the Nasdaq.

Comm Services Decline While Info Tech Sector Gain Slightly

S&P 500 Communication Services decline -1.01% as Meta Platforms (META) saw a solid decline, with decline registered from Alphabet (GOOG), Microsoft (MSFT) and Amazon (AMZN) too,

NVIDIA (NVDA) and Broadcom (AVGO) positive price action help to contribute to the S&P 500 Information Technology sector gain of +0.72%. Semiconductor stocks outperformed the broader market, providing a measure of support. The PHLX Semiconductor Index (SOX) showed a 1.9% gain at the close.

Note Yield Declined

The 10-yr note yield settled at 4.28% with three basis points down and the 2-yr note yield down by 8 basis points to 4.633%.

Credit Growth Accelerated. Market Hesitate Ahead Of PPI and Banks Earnings

Consumer credit increased by $11.3 billion in May with consensus at $9.5 billion after increasing an upwardly revised $6.5 billion from $6.4 billion in April.

This report show that revolving credit growth accelerated strongly after a slight contraction in May, raising questions about whether consumers are turning to revolving credit because of need or increased optimism about economic prospects.

The market action is pretty muted on Monday (08 July) as this could be related to hesitation ahead of the economic data events happening this week. Tuesday (09 July) we are expecting the June NFIB Small Business Optimism survey at 6am Eastern Time.

The more focused market-moving events is happening on Wednesday (10 July) and Thursday (11 July) when June Consumer Price Index and Producer Price Index will be released respectively. On top of these economic events, we are also starting the large cap banks earnings season for names like JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C).

Stocks To Watch

Microsoft (MSFT) will require its China-based staff to use only iPhones for work starting in September, as part of its global Secure Future Initiative. This move aims to ensure all staff use the Microsoft Authenticator password manager and Identity Pass app, as Google Play is not available in China.

$Amazon.com(AMZN)$ unveiled a new Echo Spot alarm clock ahead of its Prime Day event. The new model, priced at $79.99, features a display for time, weather, and music, and is integrated with Amazon's voice assistant, Alexa. Prime subscribers can purchase it at a discounted price through 17 July.

Can we see Amazon bring the interest and sentiment from investors? Amazon are still showing potential from the technical with MACD making upside movement though there is no bullish crossover. KDJ is also showing J value on the upside, though there is a slight dip.

What I can see is Amazon could be making a consolidation before breaking above $200 decisively, it has been toying the $200 dollar level for a few days already.

Super Micro Computer (SMCI) surged nearly 7% on Monday, leading a group of semiconductor companies benefiting from the growing AI market.

$Advanced Micro Devices(AMD)$ , Broadcom (AVGO), Marvell Technology (MRVL), Intel (INTC, Financial), Qualcomm (QCOM), and Arm Holdings (ARM) also saw gains. Increased demand for AI hardware in data centers and cloud providers is driving this growth.

As I have explained in my article yesterday for 05 Jul summary, we could see that AMD is making a good upside movement as seen decisive confirmation from MACD and KDJ, from what I can see, AMD would still continue to make upside move.

So there is still time for you to take position in AMD if you could like to take advantage of this nice upside.

$Intel(INTC)$ shares rose about 4% after Melius Research suggested that companies like AMD, Apple (AAPL), and Intel could catch up with AI leaders like Nvidia (NVDA) in the second half of the year. Mizuho Securities noted a short-cover trade in chipmakers, indicating a lack of negative catalysts for downside movement.

There is a very faint bullish crossover on the MACD on 27 June for Intel, when the KD is also making a BUY signal, since then, we are seeing Intel making a rather sideway trading before we see a nice upside movement from last Friday (05 July) and again on Monday (08 July).

I am expecting Intel to continue making this upside trading for this week, but I will be watching closely as we approach the CPI and PPI.

Nvidia (NVDA) was highlighted on Monday as investment firms UBS and Wolfe Research raised their price targets, citing robust demand for its upcoming Blackwell line. Shares rose 2% in late trading. UBS analyst Timothy Arcuri noted that Nvidia could earn roughly $5 per share in 2025 due to a significantly larger order pipeline for NVL72 and NVL36. Wolfe analyst Chris Caso similarly raised his price target, emphasizing strong investor sentiment despite recent downgrades.

Broadcom (AVGO) saw a 2% rise in early market action Monday, ahead of its 10-for-1 stock split scheduled for next week. The split will increase Broadcom's shares from 2.9 billion to 29 billion. The company also announced a mixed securities shelf offering for general corporate purposes, including potential business acquisitions. Broadcom's stock has increased over 20% since the split was announced.

Summary

From what we can see from yesterday trading (08 July), it looks like semiconductor is coming back to contribute with mega cap to keep the indices on the gains. But will this combination of strength contine to the rest of the week, considering that we are expecting CPI and PPI for June?

Will these two economic data derail the move?

Appreciate if you could share your thoughts in the comment section whether you think semiconductor and mega cap can continue to keep the market in mixed gains?

@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.