Tesla & Nvidia fall as Inflation Cools !
What was meant to be a joyous celebration did not materialize.
On Thu, 11 July 2024, US inflation - the consumer price index for June 2024 was released. (see below)
Readings were “better” than Wall Street forecasts but instead of charting new “highs” (like the past few days), both S&P 500 and Nasdaq indexes tumbled.
Headline Inflation (June 2024)
US core CPI (MoM) came in at 0.10%, lower than forecast of 0.20% & lower than May’s data of 0.2%.
US core CPI (YoY) came in at 3.3%, lower than forecast of 3.4% & lower than May’s data of 3.4%.
Taking into considerations what Mr Powell had said in his semiannual testimony at Capitol Hill that:
US central bank is “concerned that holding interest rates too high for too long could jeopardize economic growth”. (see above)
Interest Rate Cut Probability.
CME Fedwatch tool
And just like that, the probability of a September 2024 interest rate cut got “higher”:
Rising from previous 72% (shared in my 08 July post, click here! to read).
To a new high of 75%, with the latest core CPI data out. (see above)
Unfortunately, US market closed weaker on late Thursday afternoon:
DJIA: +0.08% (+32.39 to 39,753.75).
S&P 500: -0.88% (-49.37 to 5,584.54). Broke 7-day winning streaks.
Nasdaq: -1.95% (364.04 to 18,283.41). Suffered worst day loss since April 30.
Root Cause.
Analysts attributed US stocks’ Thursday rolled over as:
Investors rotated out of tech stocks; taking profits after consecutive days of index charting new highs.
Even multi-millionaire Jeff Bezos have been selling his $Amazon.com(AMZN)$ shares (see below)
Investors flocked to rate sensitive sectors like (a) Real Estate $Real Estate Select Sector SPDR Fund(XLRE)$ and (b) $Utilities Select Sector SPDR Fund(XLU)$ following June's cooler than expected inflation print.
04 July 2024
10 July 2024
How Will US Market Close Out on Friday?
my viewpoints: (mine only)
Futures index cont'd to "evolve" until US Market openstil
Taking US pre-market indicators for Friday at face-value, it is plain to see that negative sentiments will continue to affect Tech index, Nasdaq.
Nasdaq is poised to fall a further -0.10% when market resumes trading on weekend Friday.
As “fears” continue to strangle hold investors, there should be more outflow this Friday; especially for the Magnificent Seven. (see below)
Foresee $Tesla Motors(TSLA)$ will continue to lead the pack as the biggest loser (just like on Thu, 11 Jul 2024).
This would be followed by $NVIDIA Corp(NVDA)$ and likely Meta Platform ($META).
Why these 3 stocks ?
For the simple reason that these 3 stocks have risen the most (in the past 4 weeks). Like the saying goes “The higher you climb, the harder you fall” - right !
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Do you think Tech Stocks will continue to pull back on Fri, 11 Jul 2024 ?
Do you think it is right time to invest in Interest sensitive stocks or ETFs in anticipation of a September 2024 interest cut ?
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