Traders drove Wall Street higher, with the S&P 500 and Nasdaq 100 hitting new all-time highs, while Nvidia surpassed the historic $1,000 mark after another earnings beat and a glowing sales outlook, fueling hopes that artificial intelligence hype will continue to drive the rally.
The S&P 500 is on track to hit its 25th record high this year. Nvidia, which is at the center of the AI revolution, is up 7% in pre-market U.S. trading, pushing the company's valuation to about $170 billion. That's more than the market capitalization of Intel (~$135 billion). The AI giant also announced a 10-for-1 stock split and increased its dividend by 150%.
Market sentiment was somewhat weighed down by lower-than-expected initial jobless claims, which reinforced fears that Fed rate cuts may be further away than hoped. At the moment, slightly “bad” US economic data would be better than slightly positive data as it would be seen as Fed-friendly.
However, if Nvidia can hold its gains or even rise further above $1,000, it would be a very positive sign that the strong earnings (growth) of the big tech companies on Wall Street can continue. We expect the Nvidia effect to play out strongly today and the current rally to continue a little longer.
We see stable yields and a slightly weaker USD after a three-day rally – both cautious signs of improving risk sentiment. Commodity prices, including oil and gold, have continued to fall in Asian trade, but we now see an attempt at recovery that looks set to continue. Mixed markets in Asia will limit gains in commodities for now, but improving risk sentiment and a slightly weaker USD will support a recovery / further rise in risk assets.
👁 ROB'S MARKET OVERVIEW:
May 23, 2024
🌐/🇺🇸 Global Markets ↗️/↕️ (push to new highs lead by tech stocks – short profit taking waves at ATHs)
Cyclical / Luxury Stocks ↗️/↕️
Tech/Growth Stocks ↗️/↕️/↗️
Financial Stocks ↗️/➡️
Defensive Stocks ➡️
Energy Stocks ↗️/➡️
Materials Stocks ➡️ (stabilize, slight gains after recent sharp decline)
💱 Forex (USD driven today)
AUD, EUR ↗️ (rebounding thanks to weaker USD)
GBP, CAD ↗️/➡️ (saw already strong gains yesterday, remains slightly bullish)
CHF ↗️/➡️
JPY ➡️ (headwinds from weaker oil prices, lower than expected inflation in Canada)
USD ↘️/➡️
⚒ Commodity Markets ↗️/↕️
Oil prices ↗️/➡️
Natural Gas prices ↗️/↕️
Metal prices ↕️
Gold /↘️/↕️/↗️ (attempting to rebound after technical selling to oversold territory)
⚡️Cryptos ↕️ (remains volatile but loses short-term attractiveness due to more attractive stock markets)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
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