In the dynamic realm of finance, staying abreast of the stock market’s twists and turns is crucial. Given below is a breakdown of recent market events, trends, and insights for the upcoming week.
These futures serve as early indicators, yet it’s important to note that overnight actions don’t always mirror actual trading in the subsequent regular stock market session.
Despite a week filled with economic news and earnings reports, the Dow Jones and S&P 500 achieved all-time highs, showcasing the resilience of the stock market.
The Nasdaq also experienced a resurgence, reaching a two-year high, attributed to robust performances by Meta Platforms (META) and Amazon.com (AMZN).
Earnings from Big Tech were a mixed bag, but overall positive, providing crucial support to the tech sector.
Market breadth exhibited weakness, especially among small-cap stocks. Tesla (TSLA) managed to break a weekly losing streak but stands out as a leading S&P 500 loser in 2024.
Despite the challenges in market breadth, there have been ample opportunities for stock selection in this discerning stock picker’s market.
Noteworthy buy signals flashed on Friday from companies like Adobe (ADBE), Axon Enterprise (AXON), MongoDB (MDB), Samsara (IOT), and Synopsys (SNPS).
Growth-oriented Exchange-Traded Funds (ETFs) such as iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) exhibited notable movements.
ARK Innovation ETF (ARKK) rebounded, breaking a five-week losing streak, while Global X U.S. Infrastructure Development ETF (PAVE) and Industrial Select Sector SPDR Fund (XLI) reached record highs.
Specific stocks drew attention for their performance during the week:
MongoDB (MDB) witnessed a 6.6% jump, breaking out from a two-month consolidation period.
Axon Enterprise (AXON) surged 1.7%, extending gains from the 10-week line and presenting an early entry point.
Adobe (ADBE) showed resilience, rising 1.1% and closing just above a flat-base buy point of 633.89.
Synopsys (SNPS) climbed 2.2% to 552.05, with a 554.57 buy point from a cup-with-handle base.
Samsara (IOT) rose 2.8% to 32.51, reclaiming the 21-day and 50-day moving averages.
Tesla (TSLA) experienced a 2.5% rise, breaking a six-week losing streak. However, it remains the S&P 500’s worst performer in 2024, down 24.4%.
Tesla’s market cap, at $597 billion, is significantly lower than its peers. Nevertheless, it boasts the highest forward price-to-earnings ratio among the Magnificent Seven stocks.
After a weak Q4 earnings report and a cautionary 2024 growth outlook, analysts foresee flat earnings for 2024 compared to the previous year’s $3.12 per share.
In response to challenging market conditions, Tesla has implemented price cuts in China and Europe, with Model Y inventory discounts exceeding 10% in the U.S.
The upcoming week promises a wave of earnings reports from notable companies such as Caterpillar (CAT), Chipotle Mexican Grill (CMG), Eli Lilly (LLY), ELF Beauty (ELF), Arm Holdings (ARM), and Pinterest (PINS).
Dow Jones futures open at 6 p.m. ET on Sunday, providing an initial glimpse into market sentiment for the week. However, it’s crucial to remember that overnight movements may not necessarily dictate regular stock market session trends.
The 10-year Treasury yield experienced a notable drop to 4.03%, influenced by concerns in regional banks.
U.S. crude oil futures plunged by 7.35% to $72.28 a barrel amid demand concerns and hopes for an Israel-Hamas cease-fire.
Growth-focused ETFs like iShares Expanded Tech-Software Sector ETF (IGV) and VanEck Vectors Semiconductor ETF (SMH) demonstrated positive trends.
ARK Innovation ETF (ARKK) rebounded, signaling a break from a recent losing streak.
Sector-specific ETFs such as Global X U.S. Infrastructure Development ETF (PAVE) and Industrial Select Sector SPDR Fund (XLI) reached record highs.
The stock market rally persists, driven by strong leadership, particularly within the AI sector.
While caution is advised due to the Nasdaq’s extended status, maintaining significant exposure to the market is recommended.
Investors experienced buying opportunities late in the week, with some stocks showing promising setups. However, many leading stocks are currently extended.
The Nasdaq’s repeated extension raises caution flags for new buys, although investors are encouraged to retain substantial exposure.
Continuous monitoring of watchlists is essential for identifying potential opportunities.
Utilize the weekend to review portfolios: consider pruning underperformers and decide whether to take profits or add shares to successful investments.
Individualized decisions should align with personal investing styles, keeping in mind the ever-evolving nature of the market.