Magnificent 7 On Cue For Boxing Day Rally ?
On Thu, 26 Dec 2024 as traders approach another pivotal day for US markets, there are two crucial economic data releases that could sway market dynamics, amidst simmering concerns about inflation creeping back in 2025.
(1) Spotlight will be on US weekly jobless claims report, that serves as a key indicator of the labour market's health.
US Weekly Jobless Claims - Recap.
For week ended 14 Dec 2024, initial claims decreased by -22,000 to 220,000 versus economists’ expectations of 230,000 claims. (see below)
The data did not cause too any alarm to US market.
In fact, it acted like a cushion to soften further fall out from Wednesday.
That was when Fed chairman Mr Powell post FOMC press conference, rocked US market to the core, causing a plunge on Wed, 18 December 2024.
(2) Additionally, the 7-year note auction could provide insights into investor appetite / confidence for US government debt.
7 Year Auction Note.
The most recent 7-year note auction on 27 Nov 2024, saw moderate investor demand. (see above)
The bid-to-cover ratio, which measures the amount of bids received compared to the amount of debt offered, was 2.43.
This indicated a relatively successful auction with aggressive bids.
This also means while there was still interest in the notes (4.18% coupon rate was still decent), it was not overwhelming.
With the latest -0.25% interest cut announced by US FOMC committee on 18 Dec 2024, it is still up in the air if (i) the 7-year note’s interest and (ii) the new bid-to-cover ratio - will rise or dip further ?
Will know more about the actual ground sentiments when December 2024 data is released later in the day at12noon (ET).
** Note : The bid-to-cover ratio is just one factor to consider. Other relevant data points include (a) US interest rate on the notes and (b) overall market conditions at the time of the auction.
US Stock Index Futures.
In the meantime, US stock index futures were largely steady on Wed, 25 Dec 2024 evening as markets were shut for Christmas.
Futures taken on 26 Dec 2024, 4pm Singapore time.
The 3 US Composite Indexes’ Futures taken on 26 Dec 2024, 4pm Singapore time:: (see above)
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Dow Jones Futures were slightly lower at 43,617.00 points.
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S&P 500 Futures were muted at 6,098.50 points.
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Nasdaq 100 Futures were slightly higher at 22,056.25 points .
Magnificent 7 will be Magnifique?
All eyes remain fixated on the Magnificent Seven’s performances on Boxing Day.
So far, 5 of 7 futures indicate mild corrections: (see below)
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$Amazon.com(AMZN)$ slated for -0.087% fall.
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$Apple(AAPL)$ - slated for -0.02% fall.
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$Alphabet (GOOG)$.- slated for -0.02 fall.
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$Meta Platform (META)$ - slated for a +0.02% gain.
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$Microsoft(MSFT)$ - slated for a -0.06% fall.
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$NVIDIA(NVDA)$ - slated for a -0.34% fall.
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$Tesla Motors(TSLA)$ - slated for a +0.63% rise.
There are concerns swirling in the market about chips stocks, when trading on Thursday.
On 24 Dec 2024, it was reported that outgoing Biden administration has just initiated a new trade investigation into Chinese-made legacy chips. (see below)
The probe, which may result in additional tariffs on Chinese semiconductors, underscores ongoing tensions in the global tech supply chain.
Perhaps most, if not all chips stocks might be flighty this week ?
Will have to wait & see how things will play out in the coming days and weeks.
For now, pre-market indicators for Top 5 semiconductor stocks are a mixed bag. (see below)
Pre-market indicators taken at 4pm Singapore time.
Actually with less than one month to go before the new president is sworn-in, is the current government sowing seeds of chaos for the incoming team to manage or is it a genuine concern ?
It pretty murky when viewed from where I am sitting. More importantly, does it present a “Buy” opportunity for Nvidia, especially. Mmmm….
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Do you think US stock market will continue to power through on Boxing Day to new ATHs today ?
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Do you think now would be a good time to pick up / add a semiconductor stocks ?
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- AAPL : +0.32%
- AMZN : -0.87%.
- GOOG : -0.24%
- META : -0.72%
- MSFT : -0.28%
- NVDA : -0.21%
- TSLA : -1.76%
Wrapping up the post Christmas Friday, it begs the question, will the Magnificent 7 continue with its downwards trend or break the cycle ?
What do you think ? Share your comments and views and keep the community alive ya !
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