To The Moon

After climbing to record highs on last Friday (06 Dec 2024) when we saw how the November jobs report reinforced Wall Street's expectations for a December interest rate cut from the Federal Reserve, U.S. equities fell at midday as sliding tech shares slowed the recent record-setting stock runup.

S&P 500 and NASDAQ each fell 0.61% and 0.62% respectively while DJIA also declined by 0.54%. Both S&P 500 and NASDAQ have closed on records on last Friday while building on a post-election rally that has pushed stocks to several all-time highs in the past month.

On Monday, we saw the AI trade suffered a bump, AI chipmaker Nvidia (NVDA) shares fell more than 2% after Chinese regulators said they were investigating the company over possible violations of anti-monopoly laws.

Shares of AI server maker Super Micro Computer (SMCI) closed just slightly higher after soaring at the open when it announced that Nasdaq had extended its deadline to regain compliance with the stock exchange's listing requirements.

Vistra (VST) and Constellation Energy Group (CEG), which have soared this year on surging electricity demand from AI and data centers, slumped 7% and 5%, respectively.

Wednesday CPI Data In Focus

The New York Fed's November Survey of Consumer Expectations indicated a slight increase in inflation expectations across various time frames. October Wholesale Inventories rose by 0.2%, aligning with consensus forecasts.

One of the important economic data to look out for this week despite there is no economic data release on Monday would be the November's Consumer Price Index (CPI) scheduled to be released Wednesday before November's wholesale inflation data, expected Thursday.

These reports would be the data that Fed would get before it makes its final interest rate decision of 2024 on 18 Dec.

Only Two S&P 500 Sectors Managed To Close In The Green

As stocks retreated after S&P 500 and Nasdaq Composite struggled to maintain last week's momentum, opening lower and failing to enter positive territory. Investor caution prevailed ahead of Oracle's (ORCL) earnings report,

The communication services, financial, and utilities sectors were the weakest, each declining more than 1%. In contrast, the health care and real estate sectors managed to post slight gains.

Note Yield Went Higher

Treasury yields rise higher on Monday, 2-year yield was up nineteen basis points to 4.131% while the 10-year yield, which is sensitive to interest rate expectations, up by eight basis points to about 4.21%.

These movements followed President-elect Trump's interview on "Meet the Press," where he reiterated his policy goals.

Stocks To Watch

$Alibaba(BABA)$ U.S.-traded shares soared Monday after Chinese authorities said they planned to expand stimulus spending next year, and co-founder Jack Ma highlighted the promise of artificial intelligence (AI). Alibaba affiliate Ant Group also announced a new CEO.

Shares of Super Micro Computer (SMCI) , gained after the troubled server maker reported that the Nasdaq had delayed a possible delisting of the company from its index until Feb. 25. That gave Supermicro more time to file its annual report, which has been held up because of accounting concerns.

$Alphabet(GOOGL)$ shares rose as the company introduced its new quantum computing chip, Willow. Capable of performing complex calculations in mere minutes, the chip significantly outpaces current supercomputers. Google CEO Sundar Pichai highlighted Willow's potential to revolutionize industries like drug discovery and energy. The announcement had mixed effects on quantum computing stocks, with Rigetti Computing (RGTI) seeing a slight rise. GOOGLE's (GOOGL) payment division came under scrutiny from the Consumer Financial Protection Bureau, which cited risks to consumers in its supervisory order. In response, Google filed a lawsuit against the CFPB, arguing regulatory overreach and lack of substantial evidence of consumer harm.

Despite these news causing mixed reactions to GOOGL share movement, I think GOOGL still have a good potential for more upside as seen from the technical (MACD and MTF), we saw a bullish MACD crossover formed late last week and since then we have seen GOOGL trading comfortably above the short-term and long-term MA,

And MTF is also giving a strong upward trend now, so I foresee that GOOGL might be making a longer upside movement this time.

Intuit (INTU) and $Amazon.com(AMZN)$ have formed a strategic partnership to support Amazon sellers with financial management solutions. Intuit's AI-driven platform will offer insights into profitability and cash flow, with QuickBooks becoming the preferred partner integrated into Amazon Seller Central. The rollout will begin in mid-2025, initially focusing on U.S. sellers.

I would think this deal would benefited AMZN in the long run, as this will attract more Amazon sellers, as the task of financial management would be taken care of by this AI -driven platform.

From the technical, we can see that AMZN is having a pretty good potential for a longer period of upside movement, having traded above the short-term and long-term MA comfortably and also the MACD is showing very convincing upside movement.

MTF is also giving a strong upward trend signal. I would be holding onto my Amazon stocks as I believe there will be a chance that Amazon could be the next winner in retail eCommerce stocks next year (2025).

$MongoDB Inc.(MDB)$ saw a 10% rise in post-market trading after reporting Q3 results that exceeded expectations. The company posted adjusted earnings per share of $1.16, significantly above consensus estimates, with revenue increasing by 22% year-over-year to $529.4 million. MongoDB's Atlas service showed strong growth, contributing to the positive results. But as time of this writing, MDB has dropped by -1.94%, so we might need to monitor and hold onto looking to get into this stock.

AMD (AMD) shares fell 5% after a report suggested Amazon Web Services (AMZN) had not seen significant demand for its AI accelerators. AMD refuted these claims, stating their active engagement with AWS on AI opportunities. The comments from AWS's Gadi Hutt raised investor concerns, despite AMD's assurances of a strong relationship with AWS.

$NVIDIA Corp(NVDA)$ shares experienced a 2% decline in premarket trading as China's antitrust authority initiated a probe into potential monopoly law violations. The investigation by the State Administration for Market Regulation highlights concerns over Nvidia's market dominance. Despite these challenges, Nvidia remains committed to its operations in China, particularly in the data center sector, as it adapts its AI accelerators to comply with U.S. export regulations.

Summary

I think there might be some small recovery after we saw the stocks retreat after weeks of rally post election, with the post earnings results from C3.ai which have gained more than 4% in post market, this could help to ignite the interest and sentiment for the AI sector stocks again.

But I would exercise caution today (10 Dec) as market await the CPI data tomorrow which will somehow affect Fed next week decision for the rate cut for 18 Dec.

Appreciate if you could share your thoughts in the comment section whether you think market would continue the retreat but some sector might recover?

@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.