Nasdaq jumps as Nvidia turns a corner

By Investor Empires On Jun 25, 2024

US stocks were broadly flat on Tuesday, with artificial intelligence chipmaker Nvidia (NVDA) eyeing a cautious comeback from a three-day slide, as investors unloaded their portfolios at the end of the quarter.

The Nasdaq Composite (^IXIC) rose nearly 0.7%, while the S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, falling about 0.3% after rising more than 200 points at the start of the week.

Stocks look brighter after the Nasdaq and S&P 500 were bruised as Nvidia’s decline dampened a tech rally that has fueled gains this year. Investors are seen taking profits recorded in AI-related names as a stellar quarter comes to a close, raising the question of whether recent losses will continue further.

Shares of AI Darling rose more than 3% in early trading, after falling more than 6% on Monday.

At the same time, the Dow Jones appears to have found its feet amid the shift from technology stocks to value stocks, lending weight to the idea of extending gains to other sectors.

Elsewhere, everyone is awaiting Friday’s update to the Personal Consumption Expenditures index, the Federal Reserve’s preferred indicator of inflation. Central Bank Governor Michelle Bowman confirmed on Tuesday that she is ready to raise interest rates if keeping them steady fails to control price pressures.

In terms of economic data, house prices recorded a new record high in April despite the slowdown in annual growth compared to the previous month, according to European Central Bank data. Standard & Poor’s CoreLogic Case Shiller a report.

Meanwhile, the consumer confidence reading highlighted cracks in previous resilience. According to the Last reading From the Conference Board, the index came in at 100 for June, lower than the 101.3 seen in May. The results were in line with what economists surveyed by Bloomberg expected.

Dana M. said: Peterson, chief economist at the Conference Board: “Confidence declined in June but remained within the same narrow range it has for the past two years, as the strength of current views on the labor market continued to outweigh concerns about the future.” In issuing data. “However, if material weaknesses emerge in the labor market, confidence could weaken as the year progresses.”

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Tuesday, June 25, 2024 at 10:04 AM EST

Consumer confidence fell slightly in June

Consumer confidence fell slightly in June, halting any signs of recovery.

the The most recent indicator reading From the Conference Board it was 100, down from the 101.3 seen in May and in line with the expectations of 100 economists surveyed by Bloomberg.

“Confidence fell in June but remained within the same narrow range it has remained for the past two years, as the strength of current views on the labor market continued to outweigh concerns about the future. However, if material weaknesses emerge in the labor market, confidence could weaken “As the year progresses,” said Dana M. Peterson, chief economist at the Conference Board.

“Consumers expressed mixed feelings this month: their outlook on the current situation improved slightly overall, driven by rising sentiment about the current job market, but their assessment of current business conditions slowed,” Peterson added.
Tuesday, June 25, 2024 at 9:34 AM EST

Opening bell: Nasdaq jumps, Dow Jones slides

US stocks opened mixed on Tuesday, with AI-powered chipmaker Nvidia (NVDA) eyeing a cautious comeback from a three-day slide, rising more than 0.2% in early trading.

The Nasdaq Composite (^IXIC) rose nearly 0.5%, while the S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, falling about 0.2% after rising more than 200 points at the start of the week.
Tuesday, June 25, 2024 at 9:23 AM EST

Home prices hit a new record high in April

Home prices hit a new record high in April as the market continues to tighten. But annual growth slowed from the previous month.

Home prices in the 20 largest U.S. metro cities rose 7.2% in the past 12 months ending in April, less than the 7.5% annual increase the previous month, according to a report Standard & Poor’s CoreLogic Case Shiller. On a monthly basis, home prices in the 20 largest cities rose 0.4% in April compared to the previous month.

Low inventory, high mortgage rates and record home prices have kept the housing market out of reach or out of reach for many potential buyers. Economists at Bank of America believe housing hurdles won’t go away anytime soon.

“The U.S. housing market is stuck, and we are not convinced it will become unstuck any time soon,” Michael Gaben, an economist at Bank of America, wrote in a note to clients on Monday.

“After rising housing activity during the pandemic, it has since declined and stabilized. “We look at the forces that have reduced affordability and created a constraining effect for homeowners, and limited housing activity will remain over our forecast horizon,” the economist added.

At this point, the investment bank believes that pandemic housing shocks have yet to pass through the market. Bank of America expects home prices to rise about 4.5% this year and 5.0% next year, but then decline to 0.5% in 2026.
Tuesday, June 25, 2024 at 6:40 AM EST

One of the main market risks for 2025

As if I needed something else to do with money.

In an exclusive interview with Yahoo Finance Jennifer Schoenberger Late Monday, US Treasury Secretary Janet Yellen reminded investors that Trump’s tax cuts are set to expire in 2025.

I can’t think of the last investor I’ve spoken to who expressed concern about expiration and how that could impact the markets.

But Yellen did her best to bring this matter back to light:

“The signature policy since the Trump years was the Tax Cuts and Jobs Act, which promised an investment boom that never actually materialized. It gave massive tax breaks to corporations and wealthy individuals. It led to a massive increase in the deficit and reduced tax revenues below historic levels, and I believe it is responsible for many “The problems we’re having now are in our financial trajectory, so I’ll be interested in leaving that all in place.”

How markets will react in 2025 if tax cuts are not extended due to deficit concerns is not widely known today. However, it should not be ignored in the investment planning process. Consider this alone: Not extending the tax cut would mean that the top tax rate would return to 39.6% from 37%.

This is real money for real people.

You can watch Jane’s full interview with Treasury Secretary Janet Yellen below.
Tuesday, June 25, 2024 at 6:22 AM EST

Helpful reminder on Nvidia

While everyone now seems to be Nvidia (NVDA) experts and waxing poetic about the stock’s recent surprising decline, I’m not going to go that route this morning.

Instead, I wanted to provide some realistic numbers with the help of BTIG Technical Analyst Jonathan Krinsky. It provides some nice context on why Nvidia stock is off a bit.

Here’s what Krensky says, as if to remind the crowd that stocks don’t go up every day.

“NVDA recently traded almost 100% above its 200-day moving average. Since 1990, the largest spread ever for any US company to trade above its 200-day moving average while the largest was 80% by Cisco ( CSCO) in March 2000, which hit an all-time high. In other words, NVDA is in a league of its own. It is also worth noting that at last week’s peak, NVDA briefly surpassed Microsoft (MSFT) as the largest US company on March 24, 2000. CSCO briefly surpassed MSFT to also become the largest company by market cap, representing the peak of both CSCO and Nasdaq to date and while we fully understand that the fundamentals are much different this time around, in the last five years NVDA has been +4,280% comparable. With CSCO’s gain of +4,460% in the five years leading up to its peak over the past 18 months, NVDA’s is +827% which is actually double CSCO’s gain over the 18 months to 2000.