As the Dow Jones futures prepare to open Sunday evening, along with S&P 500 and Nasdaq futures, the focus for the coming week shifts to Micron Technology’s earnings and the Fed’s favored inflation measure. The stock market saw gains last week, with the S&P 500 and Nasdaq Composite hitting new highs on Thursday. However, there was some weakness towards the end of the week.
AI chip stocks, including Nvidia, Broadcom, Taiwan Semiconductor, Arm Holdings, and Micron, reversed from record highs. Nvidia, in particular, reached an extremely extended level before pulling back.
Aye. Nasdaq 100, Dow Jones, S&P 500 News: Triple Witching Adds Volatility; Nvidia Drops in Market Rebalancinghttps://t.co/iWxKoB17BU
— stock pirate (@stock_x_pirate) June 21, 2024
Micron’s earnings, scheduled for release on Wednesday, will be crucial in determining whether this AI chip stock can find support or will continue to decline. Additionally, earnings reports from Carnival, FedEx, and Nike are expected, providing insights into the economy and consumer spending.
Amazon.com, Meta Platforms, and Nu Holdings are also stocks to watch as they show potential for growth.
The Commerce Department will release the core PCE price index, the Fed’s preferred inflation gauge, on Friday morning. A relatively moderate reading is anticipated for May. Currently, markets predict about a 65% chance of a Fed rate cut in September and two cuts in 2024.
Last week, the Dow Jones Industrial Average led with a 1.45% gain, reaching a one-month high. The S&P 500 rose 0.6%, and the Nasdaq composite saw a minimal increase. The Russell 2000 climbed 0.8% but remains below its 50-day line.
The Invesco S&P 500 Equal Weight ETF and the First Trust Nasdaq 100 Equal Weighted Index ETF also posted gains. Despite mixed performance among leading stocks, the Nasdaq and S&P 500 are near all-time highs.
Nvidia fell by 11% in the last 2 days but US stock indices still managed to end the week green. Performance this week:
S&P 500 +0.7%
Nasdaq +0.2%
Russell 2000 +0.7%
Dow Jones +1.5%
Bitcoin -3.0%
Bank Index +1.6%
VIX +4.0%, front mth futures VIX +11%
Gold -0.6% pic.twitter.com/kJG6pbn26N— Global Markets Investor (@GlobalMktObserv) June 21, 2024
The 10-year Treasury yield increased slightly to 4.26%, while U.S. crude oil futures rose 3.4% to $80.73 per barrel.
Growth ETFs had varied results, with the Innovator IBD 50 ETF falling 1.1% and the iShares Expanded Tech-Software Sector ETF rising 2%. The VanEck Vectors Semiconductor ETF dropped 1.1%.
Nvidia remains a significant holding in several ETFs despite a 5% decline last week. Broadcom, Arm Holdings, and Taiwan Semiconductor also saw fluctuations, impacting the semiconductor sector.
Meta Platforms, Amazon, and Nu Holdings are nearing key buy points. Meta Platforms has a buy point at 414.01 from a cup-with-handle base. Amazon, with a flat base buy point at 191.70, shows potential for growth. Nu Holdings matched its record close and is actionable from breaking a downtrend.
Nvidia fell by 11% in the last 2 days but US stock indices still managed to end the week green. Performance this week:
S&P 500 +0.7%
Nasdaq +0.2%
Russell 2000 +0.7%
Dow Jones +1.5%
Bitcoin -3.0%
Bank Index +1.6%
VIX +4.0%
Gold -0.6%https://t.co/kD2MNz5xSy— Global Markets Investor (@GlobalMktObserv) June 21, 2024
The market’s current state is somewhat uncertain, with the Nasdaq still extended and the Russell 2000 below its 50-day line. Investors should monitor these stocks but be cautious about adding exposure. Quick exits are recommended if positions begin to struggle.
Staying updated with the market direction and leading stocks is crucial, as highlighted in daily analyses.
Key Points:
i. Key Earnings Reports: Micron Technology, Carnival, FedEx, and Nike are set to release their earnings this week, providing insights into the semiconductor sector and broader economic trends.
ii. Fed’s Inflation Gauge: The core PCE price index, the Fed’s preferred inflation measure, will be released on Friday, with markets anticipating moderate inflation and potential rate cuts in the future.
iii. Stock Market Performance: Last week, the Dow Jones led with a 1.45% gain, while the S&P 500 and Nasdaq reached new highs but faced some late-week weakness, especially among AI chip stocks.
iv. Growth ETFs and Key Stocks: Varied performance among ETFs, with Nvidia and other AI chip stocks experiencing declines; Meta, Amazon, and Nu Holdings are near key buy points.
v. Investor Strategy: The market shows signs of uncertainty, suggesting caution in adding new positions and quick exits if stocks struggle, while staying informed about market trends and leading stocks.
Charles William III – Reprinted with permission of Whatfinger News
