Equities gain on in-line US inflation, Treasury yields dip

All three indexes took a big dive at the outset, the Dow down 140 points at noon.  Then at noon, the entire market took off. It must have been right at noon that the PCE numbers came out. As is often the case, the smart money was all wrong as just yesterday the prediction was that unless there was a substantial dip in the data today, there would be a big sell off.  Instead, the PCE came in just slightly lower than expected which was taken as gleeful news that inflation continued to edge downward instead of upwards. 

Wall St slips with inflation data on deck

The indexes remained on pause again awaiting Thursday’s PCE data to gauge inflation and, subsequently, Fed policy on rate cuts. The expectation is that PCE will come in slightly higher and the consensus is that anything less than a substantial decrease will cause another sell off especially in light of another three Fed officials today saying again that the Fed should be “taking its time” on cuts. 

Stocks pause as key inflation data eyed

It was another seesaw day for tech, though both the S&P and Nasdaq did manage to stay modestly in the black. Not so for the traditional Dow which took a near 200-point hit until noon but then recovered in the afternoon to close at a more modest 96 point loss.  The consensus is that the market is on hold pending more inflation data but the dour expectation is that the PCE will show inflation on a modest rise and with three Fed officials today saying there’s “no rush to cut rates,” investors are expecting that “they are not going to get what they want and so backing up.” 

Global equities index sluggish with inflation in focus, oil climbs

Though all three indexes started in the black, it was a straight shot downhill all day long, except the Nasdaq that saw seesaw action all day, but still straight down, with all three closing modestly in the red. Some called it a breather after last week’s big rally, or it could be caution ahead of the PCE and a round of new inflation data. Reports continue to reflect remarkable resiliency in the economy despite the higher rates, which also triggered selling as a portent of continued “higher for longer.” On the same caution, Treasury yields rose.  Per the CBOE, volume came in at 11 billion. 

Inflation and Interest Rates

With this week's less than enthusiastic inflation data coupled with Thursday's Nvidia report that more or less knocked interest rates right off the front page, I thought I'd submit yet another perspective, this time from the AAII, on the inflation vs rates issue, and how interesting this opinion is that was published just before the Nvidia news.  Enjoy and enjoy your week.  

Not If, But When

Courtesy of Heritage Capital Research, here is a very interesting perspective on the state of the market including their take on the bull market and the Fed cutting rates.  What's interesting is that this was published just before Nvidia's remarkable performance on Thursday that all the smart money, including Heritage, predicted would cause a big sell off. The reality of course was the opposite.  That's what makes the markets so fascinating. Even the smartest people in the room frequently get it wrong.  Enjoy the weekend.  

S&P, Dow eke out another record closing high as Nvidia momentum endures

The Nvidia craze continues with its stock, the Dow, and the S&P all making modest gains which also translates into new modest gains in their records. In fact, Nvidia briefly traded above $2T making it “one of the key companies, if not the key company, driving the S&P and Nasdaq higher.” The chart tells a slightly different story with both the Dow and S&P being way up in the morning but then declining after 11 a.m. and losing almost all gains by close. Still, the success of Big Tech has been so huge that it has pushed Fed worries onto the backburner. Despite the nearly day-long declines, all the sectors ended the day in the black and all three indexes ended the week with an average 1.5% gain. Volume has returned to a more cautionary mode at 10.64 billion. 

S&P 500, Dow surge to record closing highs as Nvidia sparks AI frenzy

It was widely predicted in the last couple days that today would be a down day with a big sell off in Nvidia given that, save a blockbuster report, investors would certainly be taking their profits even if the company beat expectations. Short-selling Nvidia was the game of the day and it’s always a great source of satisfaction when short-sellers fall on their face. That’s exactly what happened when Nvidia fooled everyone and turned in a super-blockbuster report forecasting 3x Q1 revenues and today’s stock price jumping 16.4% adding $277B to its cap, beating out even Meta and giving the short-sellers a $2.9B spanking.  

S&P 500, Dow close slightly up; Nvidia gains after the bell

It was the same pattern as yesterday, everything humming along modestly in the red until 2 p.m. Yesterday, the big drop happened at 11 a.m., today it was exactly 2 p.m. that the bottom precipitously fell out, then began a late and huge surge around 3:30 p.m. to close modestly in the black. That is, all except the Nasdaq which continued to feel the fallout from Nvidia and thus spent the whole session in the red.  After the bell, Nvidia scored with a Q1 revenue forecast above estimates and, having soared 40% this year, Thursday will tell whether its lofty valuations are justified.  

Stocks close lower as Nvidia weighs ahead of earnings

It was a bad day for tech all around, well into the red all day but taking an especially big dive right at 11 a.m. The Dow fared better, being at break-even early on but also taking a big dive right at 11 a.m.  It must have been right at 11 a.m. that Nvidia started to stumble once investors became wary whether the AI giant’s Q4 earnings could justify its valuations. In fact, the day’s sentiment became defined as wariness over whether the whole glorious AI surge has become a bubble. Nvidia’s Q4 report is coming late Wednesday so Thursday will tell.  But as today’s experts pointed out, whether Nvidia comes in over or under expectations, there’s little doubt it will fall as profits are taken.  

The Individual Investor's Guide to the Top Mutual Funds 2024

On this third and final day of Presidents Day weekend, and continuing our theme of choice investments, this month's Members Only article from the AAII gives us a survey of the top mutual funds for this year.  The markets are back in business tomorrow.  

9 Best Mutual Funds to Buy Now

Continuing with this holiday weekend's theme of best investment opportunities, this week's edition of U.S. News Invested talks about mutual funds.  

10 Stocks Warren Buffett Just Bought and Sold

Given the big news from Nvidia this week having knocked both Amazon and Google out of place, I thought this week's U.S. News Invested was particularly topical given that Warren Buffett also made the news for having made a substantial divestment in Apple, along with several other major holdings. So below is a discussion of the ten major stocks in which Buffett has just made a significant reallocation.  There's an education to be had here. Enjoy still another long weekend, at least for the markets.  

Wall Street slides as hot producer price data crimps rate cut bets

What an interesting chart we have today, it’s like the market was having a nervous breakdown, all the indexes starting the day deeply in the red and then bouncing back and forth like a yoyo. At least by 2:30, all was close to break-even, then at exactly 2:40, all three dropped like a rock. It must have been at exactly 2:40 that the PPI report came out. Just as yesterday’s retail sales showing an unexpected drop that stimulated buying, the PPI today showed an unexpected rise that provoked more panic selling. Yesterday there was renewed hope for a May rate cut. Today that is back to June, and even June is now in question as the Fed narrative remains at “higher for longer.” There was also no encouragement from two Fed presidents with both Atlanta and San Francisco issuing statements that “there is more work to do.” Volume was just a little below average at 11.18 billion. 

Wall Street ends higher as retail sales slump feeds hopes for rate cuts

It was another day of bad news being taken as good news and, in today’s case, very good news as, after several months of steady gains in the retail sector, sales dropped almost 1% in January. This stoked a lot of new optimism that rate cuts could be coming sooner as it was a sign that the economy was weakening. The odds of a May cut shot up to 40% vs 36% Tuesday, though June also shot up to a healthy 79% but left the Dow benefiting from “safe” sectors that had been recently declining and, with a 348-point gain, has now recouped almost all the losses from Tuesday.  

Wall Street ends higher, lifted by Uber, Lyft and Nvidia

It was a repeat of Monday with the tech indexes on a steady rise but with the Dow seesawing like crazy between a minus 80 and a plus 170. All closed the session nicely in the black after yesterday’s big panic. Nvidia made big news Monday when it overtook Amazon to become the fourth most valuable U.S. company. Today it made bigger news when it overtook Alphabet and is now the third most valuable company. Tech overall got a big boost, again mainly because of AI.  

Wall St ends sharply lower as hot inflation sparks sell-off

Yesterday’s fence sitting turned into outright panic today when the CPI and PPI numbers nudged above expectations showing increasing inflation and triggering a big selloff from squelched hopes of sooner rate cuts. Even though Fed governors have been warning for a couple weeks now that cuts would be later and the market was being premature, it wasn’t until today’s inflation gauges that it was finally believed. March of course has been off the table for some time but much of the recent rallies were predicated on hopes that the first cut would come in May.  

Nasdaq slips from near all-time high, Dow up modestly ahead of inflation data

The narrative says that everyone was being cautious today but the charts tell a very different story with all the indexes going great guns in the morning, then suddenly falling precipitously at almost exactly 1:15 p.m.  The Dow was up some 260 points, even the Nasdaq bolted almost a hundred, then total collapse at 1:15 p.m. The only conjecture is that investors decided with the coming CPI and PPI that however the numbers are running, hot or cold, it’s not going to change the Fed’s position on cuts and that, therefore, there was a sudden decision not to make any big bets.  

Artificial Intelligence Stocks: The 10 Best AI Companies

The latest and greatest on AI ... 

The Individual Investor's Guide to the Top ETFs 2024

The latest hot stuff from the AAII.  

Megacaps rally pushes S&P 500 to first close above 5,000 milestone

Tech did very well today with both the S&P and Nasdaq taking a shot straight up with the S&P shooting up a whopping 28 points to finally close over the coveted 5,000 mark.  As tech goes, the Dow often goes the other way and today saw the index in the red all day, hitting a low of 170 points down by noon before recovering to a 54-point loss by close. AI was once again the major market mover bolstering the semiconductor index by 2%. The Nasdaq also briefly touched its own major milestone of 16,000 and though neither achievement changes the risk factors, they both do “raise the profile of what’s happening in the market.” 

S&P 500 ends just shy of 5,000 mark after touching milestone

After a lot of exuberant confidence yesterday, today it was back to a lot of seesaw action as the markets returned to business as usual trying to balance rate cuts vs earnings with both the S&P and Dow spending much of the session in the red as a consequence, the Dow down some 130 points by 11:30.  But then both indexes bounced back and both ended the day modestly in the black. The S&P added to optimism by briefly touching the 5,000 milestone. Once again, solid Q4 earnings reports saved the day, especially with tech as the Nasdaq spent the whole day in the black though with much choppiness but with the semiconductor index jumping 1.6%.  

S&P 500 closes at record high; earnings, rate outlook in focus

Yesterday was a day of uncertainty debating between rate cuts and growth, today was once again a day brimming with optimism with investors reveling in growth and the strength of earnings shooting the Dow and Nasdaq both up 3-digits. Once again, the S&P made another record and the 147 points ahead on the Nasdaq has now put that index just 2% shy of its 2021 record. More mixed messages came from the Fed with the Minneapolis Prez predicting up to 3 cuts this year, while the Fed’s Kugler said more positive data is needed.  More than half of Q4 S&P is in with 81.2% beating estimates. Volume was a little below average at 11.2 billion. 

Stocks edge up, Treasury yields slip, China ETFs gain

Choppiness is the only word that really fits today’s market performance with the tech indexes spending much of the day in the red, though closing modestly in the black. The Dow fared better gaining 141 by close but not before going through dozens of peaks and valleys. For the second day, investors are struggling with the opposing questions of rate cuts vs growth, now wondering whether the “soft landing” scenario is even relevant anymore or whether we’re instead heading to a “no landing” future with even acceleration. 

Wall Street equities fall with interest rates, earnings in focus

For the umpteenth time, Powell issued a statement that there was little or no chance of a rate cut in March. Today the markets finally chose to believe him and that sent all the indexes spiraling downwards, the Dow losing 435 points by 11 a.m. and the S&P and Nasdaq faring not much better. But strong earnings from tech enabled both the S&P and Nasdaq to regain almost all of their lost ground before close. The Dow was not so fortunate, recovering only about 1/3 of its losses. But with the markets doing so very well the last three months, a little pullback is actually a good thing. 

Best Stocks to Buy in All 11 Market Sectors

Once again, U.S. News Invested gives their take on the single best stock in each of the 11 S&P market sectors.  

7 Best Vanguard Funds for Beginner Investors

Sat 2-3-24

Once again, getting back to basics ... 

S&P 500 surges to record closing high on solid earnings, robust data

It was just yesterday that investors were celebrating a cooling job market, which was good news on the inflation front, and today there was more celebration of a roaring job market as the January report came in with almost twice the expected number at 353,000 new jobs. Add to that solid Q4 reports from two of the Magnificent Seven – Meta and Amazon – and there was indeed enough celebrating to put the Dow and Nasdaq into 3-digits for a second day and the S&P to still another record high. 

Stocks rally on earnings outlook, yields slip on banking concerns

As is often the case with the markets, what is taken as bad news one day gets repurposed as good news the next. That’s what happened today as, after yesterday’s calamity with the hopes of a March rate cut virtually dashed, today investors took a second look and decided that – hey! Maybe cuts aren’t coming as soon as we’d like but they are coming. Besides which, Q4 is going pretty well.