‘Mag Seven’ Rally as Nvidia’s Winning Run Hits 13%: Markets Wrap

By Investor Empires On Oct 8, 2024

(Bloomberg) — A rally in the world’s largest technology companies sent stocks higher, with the market rebounding from its worst session in a month. The turmoil in Treasuries paused as traders delved into comments from Federal Reserve officials.

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The tech-heavy Nasdaq 100 rose 1.1%, with Nvidia Corp extending its five-day rally to 13%. Apple shares rose 1.5%. US-listed Chinese stocks fell as Beijing was reluctant to launch more major stimulus, disappointing traders looking for more fuel for a global equity rally. Treasuries saw small moves after the recent sell-off, with shorter maturities outperforming.

Federal Reserve Governor Adriana Kugler said the US central bank should remain focused on bringing inflation back to its 2% target, but through a “balanced approach” that avoids an “unwanted” slowdown in employment growth and economic expansion. Officials cut the benchmark interest rate by half a point last month, a larger-than-expected move that Jerome Powell said was aimed at protecting the strong labor market.

“While strong US jobs data (along with a stronger ISM release) bolster our confidence in a soft landing, US data is not so strong that the Fed’s contribution to the global interest rate cutting cycle looks set to end,” Mark said. Hafele at UBS Global Wealth Management. “We therefore maintain our belief that investors will set lower interest rates.”

The S&P 500 rose to about 5,740. Bloomberg’s gauge of giant companies “Magnificent Seven” rose about 1.5%. Honeywell International Inc. benefited. Who plans to spin off its advanced materials division. Roblox Corp. has declined. Hindenburg Research said it was betting against the gaming platform.

10-year Treasury yields were little changed at 4.02%. West Texas Intermediate crude fell 4.4% to $73.75 a barrel. Hedge fund manager Pierre Andurand predicted that oil prices would rise by $10 to $15 per barrel if Israel attacked Iranian export facilities.

Mohamed El-Erian says the guessing game over the Fed’s monetary policy path is leading to market volatility.

“Markets are all over the place. In the last 15 days, the probability of a 50 basis point rate cut in November has risen from more than 60% to zero. “November is next month,” El-Erian, president of Queen’s College in Cambridge, told Bloomberg TV on Tuesday.

“That’s how much uncertainty there is in this market. These are massive moves based on data points,” he added.

Yields have risen after a healthy decline, and that currently suggests the bond market is pricing in fewer interest rate cuts rather than more, according to Michael Landsberg of Landsberg Bennett Private Wealth Management.

“Yields are likely to remain within range, and even if they rise from here, they have plenty of room to rise before higher yields start to negatively impact share prices,” he said.

The company’s most prominent features:

Hon Hai Precision Industry Co. plans to boost server capacity to meet stronger-than-expected demand for Nvidia Corp. chips used for artificial intelligence development, reflecting its expectations that spending on artificial intelligence will remain high.
DocuSign rose after S&P Dow Jones Indices said the e-signing company would join the S&P Midcap 400 index before the start of trading on October 11.
PepsiCo Inc. reduced its Its revenue forecasts for this year, as cash-strapped consumers, boycotts in the Middle East and major recalls impact large volumes of food and beverages.
Wells Fargo & Co. shares rose after Wolfe Research upgraded the bank’s performance to outperform its peers, noting that “the bad news has been fully acknowledged.”
Shares of WW International Inc. rose. After the diet company said it would start offering a copycat version of the weight-loss drug at a much lower cost than Novo Nordisk A/S’s Ozempic and Wegovy.

Main events this week:

Fed Minutes, Wednesday
The Fed’s Lori Logan, Raphael Bostic, Austin Goolsby and Mary Daly speak on Wednesday
US Initial Jobless Claims, CPI, Thursday
The Fed’s John Williams and Thomas Barkin speak on Thursday
JPMorgan and Wells Fargo kick off earnings season for Wall Street’s big banks on Friday
US Producer Price Index, University of Michigan Consumer Confidence, Friday
The Fed’s Lori Logan, Austin Goolsby and Michelle Bowman speak on Friday

Some key movements in the markets:

Stocks

The S&P 500 rose 0.7% as of 12:10 PM New York time
The Nasdaq 100 rose 1.1%.
The Dow Jones Industrial Average rose 0.2%
MSCI World Index rose 0.2%
The Bloomberg Magnificent 7 Total Return Index rose 1.2%.
Russell 2000 index rises 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
There was little change in the euro at $1.0972
There was little change in the pound sterling at $1.3093
There was little change in the Japanese yen at 148.15 to the dollar

Cryptocurrencies

Bitcoin fell 1.4% to $62,126.43
Ethereum fell 1.1% to $2,415.69

Bonds

The yield on 10-year Treasury bonds was little changed at 4.02%.
The yield on 10-year German bonds fell by one basis point to 2.24%.
The yield on British 10-year bonds fell two basis points to 4.18%.

Goods

West Texas Intermediate crude fell 4.4% to $73.75 a barrel
Gold in spot transactions fell 1.1 percent to $2,614.75 per ounce

This story was produced with assistance from Bloomberg Automation.