We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dow Hits Record High on Otherwise Uneventful Trading Day
Read MoreHide Full Article
Monday, August 26th, 2024
It was an overall lackluster day in today’s stock market, save for one key piece of news: the Dow index has closed at new all-time highs. At 41,240 — +65 points on the day, or +0.16% — the blue-chip 30 stocks have taken out highs posted mid-July.
Meanwhile, the Nasdaq has sold off -152 points on the session, -0.85%. The S&P 500 today dipped -0.32% and the small-cap Russell 2000 grew a modest +0.08%. As I say, overall a lackluster day of trading.
What’s Behind the Chip Stock Selloff?
Ahead of the fiscal Q3 earnings report from NVIDIA (NVDA - Free Report) on Wednesday, market participants are cooling their jets somewhat on the semiconductor trade. This is not so much in expectation that NVIDIA may miss estimates — it’s got a current winning streak of six straight quarters. But at trading levels over +150% year to date, following +239% in calendar-year 2023, you might say NVIDIA has been priced for perfection, and is reasonably taking some profits off the table.
Elsewhere, the NVIDIA-adjacent trade took a powder today. Super Micro Computer (SMCI - Free Report) , for instance, dropped -8% in today’s session, though the stock remains +95% year to date. That said, it was up near $1200 per share back in mid-March and a smaller-cap play on NVIDIA’s business. Other chip stocks that sold today, like Micron (MU - Free Report) , did so on weaker shipments expected in the near term.
What’s the Next Market Catalyst?
Aside from Wednesday afternoon’s Q3 numbers for NVIDIA, the next big possibility for a market shakeup from our current vista is Friday morning’s Personal Consumption Expenditures (PCE) report for July. Expectations are for a flat-to-slightly-higher report month over month — and with a “2-handle” year over year, on both headline and core prints.
At +2.6% core PCE in June, it had already cut in half the +5.2% level we had seen in October of 2022. The forecast for Friday is for this to tick up to +2.7%, but even if it does, this doesn’t mean we need to fear inflation creeping back into these metrics. Since May of last year, we’ve seen nine months of core PCE move lower, four stay flat with the previous month, and only one ticking back up.
Image: Bigstock
Dow Hits Record High on Otherwise Uneventful Trading Day
Monday, August 26th, 2024
It was an overall lackluster day in today’s stock market, save for one key piece of news: the Dow index has closed at new all-time highs. At 41,240 — +65 points on the day, or +0.16% — the blue-chip 30 stocks have taken out highs posted mid-July.
Meanwhile, the Nasdaq has sold off -152 points on the session, -0.85%. The S&P 500 today dipped -0.32% and the small-cap Russell 2000 grew a modest +0.08%. As I say, overall a lackluster day of trading.
What’s Behind the Chip Stock Selloff?
Ahead of the fiscal Q3 earnings report from NVIDIA (NVDA - Free Report) on Wednesday, market participants are cooling their jets somewhat on the semiconductor trade. This is not so much in expectation that NVIDIA may miss estimates — it’s got a current winning streak of six straight quarters. But at trading levels over +150% year to date, following +239% in calendar-year 2023, you might say NVIDIA has been priced for perfection, and is reasonably taking some profits off the table.
Elsewhere, the NVIDIA-adjacent trade took a powder today. Super Micro Computer (SMCI - Free Report) , for instance, dropped -8% in today’s session, though the stock remains +95% year to date. That said, it was up near $1200 per share back in mid-March and a smaller-cap play on NVIDIA’s business. Other chip stocks that sold today, like Micron (MU - Free Report) , did so on weaker shipments expected in the near term.
What’s the Next Market Catalyst?
Aside from Wednesday afternoon’s Q3 numbers for NVIDIA, the next big possibility for a market shakeup from our current vista is Friday morning’s Personal Consumption Expenditures (PCE) report for July. Expectations are for a flat-to-slightly-higher report month over month — and with a “2-handle” year over year, on both headline and core prints.
At +2.6% core PCE in June, it had already cut in half the +5.2% level we had seen in October of 2022. The forecast for Friday is for this to tick up to +2.7%, but even if it does, this doesn’t mean we need to fear inflation creeping back into these metrics. Since May of last year, we’ve seen nine months of core PCE move lower, four stay flat with the previous month, and only one ticking back up.
Questions or comments about this article and/or author? Click here>>