Market Overview
The stock market had a solid showing today, with major indices all jumping more than 1.0%. The S&P 500 (+1.02%) closed above 5,600 for the first time. However, today's trade featured below-average volume due to hesitation ahead of the June Consumer Price Index release tomorrow and the start of earnings season on Friday.
Sector Performance
- Mega Cap and Semiconductor Stocks: Strength in these sectors boosted the broader market. The PHLX Semiconductor Index (SOX) logged a 2.4% gain, and the Vanguard Mega Cap Growth ETF (MGK) jumped 1.0%. Notable performers included NVIDIA (NVDA 134.93, +3.55, +2.7%), Apple (AAPL 232.98, +4.30, +1.8%), Microsoft (MSFT 466.25, +6.71, +1.5%), and Alphabet (GOOG 192.66, +2.22, +1.2%).
- Bank Stocks: Bank stocks also outperformed the broader market ahead of earnings results from some big banks on Friday. The SPDR S&P Bank ETF (KBE) gained 2.0%, and the SPDR Regional Banking ETF (KRE) closed with a 2.2% gain. Citigroup (C 66.98, +0.43, +0.7%) and JPMorgan Chase (JPM 207.80, +0.17, +0.1%) closed higher, while Wells Fargo (WFC 59.72, -0.16, -0.3%) logged a slim decline.
Overall Market Participation
Many names participated in the upside moves. The equal-weighted S&P 500 logged a 0.8% gain, and all 11 S&P 500 sectors closed higher. The heavily-weighted information technology sector (+1.6%) led the pack, while the financial sector (+0.4%) brought up the rear.
Fed Chairman's Testimony
Fed Chairman Powell concluded his two-day semiannual testimony on monetary policy with an appearance before the House Financial Services Committee, which didn't produce any surprises like yesterday's remarks to the Senate.
Bond Market
The 10-yr note yield dropped two basis points to 4.28%, and the 2-yr note yield settled unchanged from yesterday at 4.63%. This price action was partially in response to a strong $39 billion 10-yr note reopening.
Year-to-Date Performance
- Nasdaq Composite: +24.2% YTD
- S&P 500: +18.1% YTD
- Dow Jones Industrial Average: +5.4% YTD
- S&P Midcap 400: +5.1% YTD
- Russell 2000: +1.2% YTD
Upcoming Economic Data
Looking ahead, Thursday's calendar features the June Consumer Price Index at 8:30 ET. Other data include:
Guru Stock Picks
Robert Olstein has made the following transactions:
Jerome Dodson has made the following transactions:
Parnassus Value Equity Fund has made the following transactions:
Tweedy Browne International Value has made the following transactions:
- Reduce in XPAR:TTE by 13.9%
- Sold out in HKSE:00296
- Add in FMC by 49.3%
- New position in XKRX:145720
Today's News
Tesla's (TSLA, Financial) recent rally appears to be driven by more than just market buzz. The surge began after Tesla revealed it deployed 9.4 gigawatt hours of energy storage products in Q2, more than doubling its Q1 figures. This deployment is enough to power 10,000 homes in the U.S. for a year, significantly impacting quarterly revenue and profit. Morgan Stanley now projects Tesla's energy business to reach 100GWh in storage deployments by 2028, three years earlier than previously forecasted. The firm also raised its valuation of Tesla Energy to $50 per share, citing accelerating global demand for energy storage amid rising generative AI needs.
Shares of HubSpot (HUBS, Financial) plummeted 12% following a report that Alphabet (GOOGL) abandoned plans to acquire the company. While initial reports suggested detailed talks for a potential all-stock or mixed cash deal, the companies never reached the due diligence stage. HubSpot shares had already dropped 14% since April 18, the day before the first report on a potential deal surfaced. The stock had briefly surged 8% on May 28 when speculation about an all-stock deal emerged, but it has since faced significant declines.
Restaurant stocks like CAVA Group (CAVA, Financial), Sweetgreen (SG, Financial), and Dutch Bros (BROS, Financial) saw declines of 4.0%, 4.8%, and 5.0%, respectively, as investors shied away from high-earnings-multiple stocks. Shake Shack (SHAK) and Wingstop (WING) also retreated. Evercore ISI issued a warning about broadly lower sales trends, driven by weaker traffic in casual dining. The firm noted that while fast food sales showed some improvement this week, upcoming summer promotions will test consumer demand.
Nikola Corporation (NKLA) announced it had regained compliance with Nasdaq's listing rules after its stock maintained a closing bid of $1.00 or greater from June 25, 2024, to July 10, 2024. This comes as a relief for the company, which has faced multiple challenges in maintaining its listing status.
Apple (AAPL, Financial) suppliers, including Taiwan Semiconductor Manufacturing Company (TSM, Financial), saw gains as Apple aims to boost iPhone shipments this year. TSMC, which produces chips for various Apple products, saw its shares rise by 3%. Micron Technology (MU, Financial), which supplies memory chips for Apple, jumped 4%. Other suppliers like Skyworks Solutions (SWKS), Qualcomm (QCOM), and Qorvo (QRVO) also experienced gains.
Semiconductor stocks were buoyed by the AI spending boom. AMD (AMD, Financial) shares rose over 3% after announcing a $665M deal to acquire European AI lab Silo AI. Taiwan Semiconductor (TSM, Financial) also saw a 2.7% rise after reporting June revenue figures that exceeded estimates, driven by AI-related demand.
MarineMax (HZO, Financial) surged 13% after Island Capital Group offered to buy its yachting and marina business. The bid likely values the unit at $500 million to $600 million. This offer comes after MarineMax acquired the YRMS business from Island Capital in 2022 for $480 million, indicating a strategic move by Island Capital to regain control.
Newmont (NEM, Financial) gained 3.5% as CIBC upgraded the stock to Outperform, raising its price target to $61. CIBC cited Newmont's unique position as the only gold producer listed on the S&P 500, making it an attractive option for U.S. investors amid a favorable macroeconomic outlook and rising gold prices.
CVRx (CVRX, Financial) stock plunged 31% while Sight Sciences (SGHT) shares jumped 14% after the U.S. government released proposed Medicare reimbursement rules for 2025. CVRx faced significant proposed cuts, while Sight Sciences saw proposed increases, which could impact their respective financial performances.
Illumina (ILMN) saw its stock rise as Citi upgraded it to buy, citing potential core margin upside post-GRAIL divestiture. The bank also upgraded Quest Diagnostics (DGX) and Agilent (A), while downgrading Avantor (AVTR) to neutral, reflecting shifting market dynamics and valuation opportunities.
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