To The Moon

Last week we saw the market was focused on China after China’s officials announced a raft of measures aimed at boosting consumption, property demand, and stock market liquidity.

The People's Bank of China lowered its reserve requirement ratio, the repurchase rate, the medium-term lending facility rate, and hinted at a potential cut to the loan prime rate. A flood of fiscal spending was also announced with upcoming bond issuance expected to reach roughly half of the amount spent to counter the Great Financial Crisis.

We saw S&P 500 China Select ADR Index gained 3.92% on Friday (27 Sep).

S&P 500 Energy Sector Top The Group

Shares of oil and gas exploration and production company APA Corp. (APA) posted a daily gain of 6%. Crude oil futures prices staged a slight recovery on Friday after dropping earlier in the week amid expectations of an output boost by major producers.

APA also announced this week that it would extend its partnership with software infrastructure provider Palantir Technologies (PLTR) aimed at harnessing AI technology to help the energy company optimize its operational planning, supply chains, production, and contract management.

This helps the S&P 500 Energy sector to gain +2.11%, there was also renewed strength in semiconductor names after Micron (MU) beat quarterly expectations and issued strong guidance. The stock rallied to a two-month high, taking the PHLX Semiconductor Index to rise by +4.3% for the week.

Nvidia shares, which had closed higher in each of the four previous sessions, fell 2.1% on Friday, in line with declines for other large chip stocks including Marvell Technology (MRVL), Broadcom (AVGO) and KLA Corp. (KLAC). Other mega-cap technology companies were mixed, with Apple (AAPL) and Alphabet (GOOGL) rising while Microsoft (MSFT), Meta Platforms (META) and Amazon (AMZN) lost ground.

This has caused the information technology sector to be at the bottom of the group with -0.96%.

Longer Term Note Yield Ended Slightly Up

10-year note yield ended the week with slight increase with four basis point to close at 3.758% while 2-year note yield managed to gain thirteen basis points to close at 3.582% as rate cut expectations increased.

At the end of the week, the fed funds futures market was pointing to a 57.1% implied likelihood of another 50-basis point cut in November, up from 50.4% a week ago.

Stocks To Watch

Shares of casino operators moved higher following this week's announcement of an economic stimulus in China, which could provide a boost to their properties in Macau. $Wynn(WYNN)$ jumped 7.2% on Friday, notching the top performance in the S&P 500, after Morgan Stanley upgraded the stock to "overweight" and increased its price target. Analysts highlighted Wynn's ongoing investments, high-end offerings, locations near newly launched attractions, and upcoming project in the United Arab Emirates.

Even though we saw WYNN stock price rose by more than 7% on last Friday, but if we looked at the MTF, we are seeing a downward momentum because the long-term MA is above the short-term MA, MACD though show promising upside, we might need to be cautious of this stock.

Unless we are going to see a crossover of the short-term MA over the long-term MA, I would continue to monitor this stock.

Nvidia (NVDA) is experiencing regulatory pressure from China, discouraging local companies from purchasing its chips, including the H20. This move is part of China's strategy to boost its domestic AI chipmakers like Cambricon and Huawei, reducing reliance on U.S. technology. Nvidia shares slipped 3% on Friday, although the company still derives 12% of its revenue from China and Hong Kong.

Intel (INTC) and Micron Technology (MU) both ended their six-day winning streaks amid broader declines in semiconductor stocks. INTC finished 0.08% lower at $23.90, while MU was down 2.18% to $107.49. Despite the dip, Intel has seen a 14.31% gain over the last six trading sessions, driven by strong performance and market sentiment.

$Walt Disney(DIS)$ received a mixed update from J.P. Morgan, which lowered its Q4 earnings estimates by 1.8% to $3.72B due to a loss of carriage with DirecTV and a two-day shutdown at Shanghai Disneyland. However, they remain bullish on the stock, maintaining a positive outlook for Disney+ and Hulu net additions.

DIS is trading between the short-term and long-term MA, which could signal that we might expect a reversal, but we need to see a crossover signal though MACD is presenting an upside movement potential.

$McDonald's(MCD)$ continued its upward trend, closing 0.02% higher at $303.70 on Friday. The company recently raised its quarterly dividend by 6% to $1.77 per share and has seen positive traffic trends, partly driven by the success of its new Collector's Meal.

Broadcom (AVGO) ended a six-session winning streak, closing 3% lower at $172.7 on Friday. Despite the decline, the stock has gained nearly 60% this year. Analysts remain bullish, with a majority giving it a Buy rating.

Apple (AAPL) is expected to launch a new version of its Vision Pro mixed reality headset in 2025, powered by the M5 chip. This update aims to enhance the user experience significantly, potentially integrating advanced AI functionalities.

Amazon (AMZN) faced labor challenges as more contract drivers at its DBK4 facility in Queens, New York, formed a union with the International Brotherhood of Teamsters. This follows a similar move by drivers at three other delivery partners last week.

$Carnival(CCL)$ is set to report its Q3 earnings on Monday, with analysts expecting a 30% rise in EPS to $1.15 and a 14% increase in revenue to $7.81 billion. The cruise industry has seen a strong recovery post-COVID, although analysts caution that demand may wane in 2025.

There have been strong signal from MTF and MACD as we might be seeing a bullish crossover from MACD.

And for the MTF, it looks like it is consolidating but I am expecting a breakout after its earnings today (30 Sep) for CCL.

Summary

I would expect the chinese ADRs and related stocks to continue to perform as we should be seeing more news and how the China economic stimulus is working on the different parts of the economy.

So we need to watch out for stocks with market focused on China as well.

Appreciate if you could share your thoughts in the comment section whether you think market would make another positive bias with strong showings from Chinese related stocks.

@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.