July 10th Market Overview

July 10th Market Overview (no fluff)

Author

J.L. Bernstein
July 10, 2024

Happy Wednesday everyone. Today I am officially covid free!

Anyways lets dig in…

Executive Summary

  • Soft CPI data anticipated which could lead to higher markets.

  • Several tech companies including NVDA and DELL show more bullish positioning and strong performance.

  • Market volatility (VIX) indicator shows trades are short; Wall Street’s “Fear Gauge” suggests a holding pattern.

  • French markets and global economic uncertainties are impacting traders’ strategies.

    SPY currently at - $559
    QQQ currently at - $502

Market Overview

  • Traders’ bearish positioning on the dollar signals an expectation of a soft or in-line CPI which could support markets.

  • SPX is on its longest winning streak since January.

  • Nasdaq is flat, trading at 20,500 (premarket), with traders buying dips as they occur.

  • DJI appears to be on the verge of a breakout from its current triangle formation.

  • French and German markets experience pressure due to Moody’s downgrade threat to France.

Key Market Drivers

  • Japan’s PPI data came in softer than expected, adding to global inflation concerns.

  • Mortgage applications fell by 0.25% this week.

  • Fed speeches and talks from Powell, Bowman, and Goolsbee hint at dovish policy movements and acknowledgment of weaker labor markets.

  • China’s mixed inflation data shows domestic demand is not picking up as anticipated.

Stock Spotlight

  • NVDA - Vol skew points higher, indicating bullish positioning into August; bears forced to close their positions.

  • DELL - Retested pendant breakout and held above, indicating bullish sentiment on technicals with a target of 160.

  • AMZN - Skew diverges lower as price consolidates under 200, despite Bezos selling shares. Current volume positioning remains bullish.

  • HOOD - Still inside the wedge, but good consolidation and fundamentals suggest a move higher soon with a target of 25.

Other Magnificent 7 Updates

  • META - TD Cowen raises PT to 600 from 530 due to positive engagement trends and solid ad checks.

  • MSFT - Gives up observer seat on OpenAI’s board, noting improved governance.

  • TSLA - Goldman raises price target to 248, noting long-term growth prospects but short-term earnings pressure.

  • AAPL - Needham raises PT to 260 from 220, expecting significant share repurchase programs.

  • GOOGL - Noted robust growth in search spend, indicating a healthy digital ad environment.

Other Notable Company News

  • BTC - Above 59k, lifting crypto stocks in premarket.

  • Beijing announced support for robo taxis; BIDU’s Apollo GO to deploy 1,000 robot axis in Wuhan this year.

  • ORCL - Ends talks with xAI for 10B AI server deal, but still sees strong demand.

  • CMG - Weak price action post-stock split; announced CFO retirement after 25 years, to be succeeded by Adam Rymer.

  • BA - Delivered 44 commercial aircraft in June, marking its highest monthly total.

  • WMT - Piper Sandler upgrades to overweight, citing early stages of significant profit growth through high-margin streams.

Sector Watch

  • Global PC shipments increased by 3% in Q2 2024, driven by AI-capable devices, with AAPL showing 20% YOY growth.

  • IDC raised forecasts for data center compute and storage spending through 2028, benefiting NVDA, TSM, AMD, SMCI.

  • Samsung Electronics union strikes are impacting their 8-inch semiconductor production.

  • Chinese vehicle sales saw a 2.7% decrease YOY in June.

Bond Market

  • Short-term positioning on TLT suggests traders are hedging but remain bullish, aligning with expectations of a soft CPI.

Policy Watch

  • Powell highlighted that the labor market is no longer a source of broad inflationary pressures and acknowledged concerns about weakening labor data. This dovish stance hints at future rate cuts.

  • Yellen echoed Powell’s sentiments, predicting lower inflation over time and noting that the jobs market’s influence on inflation has decreased.

  • France faces pressure after Moody’s downgrading threat due to its debt servicing costs.

    -JB

    P.S. I wrote a whole book on how I approach swing trading, I didn’t hold back on what Ive learned from the best traders I got to shadow while working on Wall Street.

Note: This newsletter is intended for informational purposes only.