The market is buzzing with optimism! Yesterday, about 20% of S&P 500 companies hit new highs for the year. This includes big names like Nvidia, Disney, Meta, Costco, JPMorgan, and Eli Lilly. However, there seems to be some cracks in the tech sector. AMD is dipping on news of a potential regulatory hurdle in China, and Apple continues to drop after reports of slowing iPhone sales.
Other stocks in the news, GitLab’s stock suffered a major sell-off after their disappointing forecast, while Target is moving higher with great quarterly results. The market has been regrouping but with the market broadening out with so many stocks hitting new highs but indices pausing.
Investors will be watching economic data closely today, with reports on the service sector (S&P Global US Services PMI and ISM Services Index) and durable goods orders on the agenda.
Investors should always practice risk management. The market is an overly optimistic market but justified by the recent positive earnings results. The stock market is hitting new highs on a regular basis, but it would be wise to have discipline and patience as the market is overly optimistic. The economy is strong, and we should always be invested but caution is always wise.
Key Points:
Market Optimism: There’s a high level of enthusiasm in the market.
Tech Sector Volatility: The tech sector is experiencing mixed results. AMD and Apple’s stock are showing weakness.
Market Broadening: The market is broadening, with many stocks hitting new highs. However, there’s a momentary pause in the indices, suggesting a period of consolidation or regrouping.
Economic Data: S&P Global US Services PMI, ISM Services Index, and durable goods orders could influence market direction and should be watched as direction of the US economy.