#StockMarket #NVIDIA #EconomicUpdate
The stock market is heading into the week ahead at a record high, but with underlying uneasiness. The S&P 500 has reached a new record high of 3,230.25 points, marking its 25th record high this year, and extending its streak without a 2% one-day decline to 328 trading days. This tranquility, however, belies the tension between the excitement surrounding stocks like $NVIDIA and the chilling effects on more cyclical sectors.
$NVIDIA's feverish behavior, driven by its upcoming 10-for-1 stock split, has seen over $80 billion in common stock trading hands, more than ten times the activity seen in $AAPL and $MSFT. The GameStop saga, on the other hand, exhibits a less extreme case of volatility. Retail options activity and volumes in marginal sub-$1 stocks have surged, but they have not become pervasive or indiscriminate. Investor flows into equities have picked up, but they are still outpaced by the sums going into money-market vehicles.
The chills were felt by some cyclical segments of the market last week, as a continued decline in Treasury yields failed to improve the breadth of the rally or enliven small-caps, banks, and consumer cyclicals. This sensitivity to signs of an economy decelerating more than intended or desired by investors or the Federal Reserve was reflected in a series of downside surprises on manufacturing indexes, housing numbers, and commodities.
The jobs report for May delivered a warm headline payroll gain of 272,000, but the household survey revealed an unemployment rate of 4%, up from 3.9%. This split market, with the headline benchmark pressing highs and more stocks backsliding than rising, has left some analysts questioning the market's health. The S&P 500 is up almost 2% since its closing peak at the end of the first quarter, while the equal-weighted version is 3.4% below its March 28 crest.
The market's concentration, with three stocks accounting for 20% of its market value, has raised concerns about diversification and active investors' ability to beat the bogey. The market's future direction will depend on the ongoing structural growth opportunity in generative AI and the mixed macroeconomic picture. The coming week will provide some crucial insights, including $AAPL's developers event, another Consumer Price Index report, and a Fed meeting with an updated collective projection of monetary policy.
Perspective:
The comments section is filled with mixed reactions. Some investors are optimistic about the market's resilience, while others are cautious about the underlying uneasiness and the potential for a correction. There is also advice to diversify portfolios and be prepared for any eventuality.
Data:
- The S&P 500 has reached a new record high of 3,230.25 points, marking its 25th record high this year.
- $NVIDIA's stock split has contributed to its feverish behavior, with over $80 billion in common stock trading hands.
- The market's concentration, with three stocks accounting for 20% of its market value, has raised concerns about diversification and active investors' ability to beat the bogey.
Original Article: https://www.cnbc.com/2024/06/08/mike-santoli-stock-market-week-ahead-nvidia-apple.html
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