Will Markets Hastate?

Bitcoin Remains Under Pressure...

KR Opinion

Before getting into tonight's opinion, remember there is no market on Wednesday so that the next report will come out on Wednesday night for the Thursday session.

Another day, another new high. The mega tech stocks continue to drive the markets higher, with Microsoft and Apple leading the way once again. The AI trend continues to dominate the markets, as evidenced by the SOX index reaching an all-time high. It seems all hands on deck now, with these stocks leading the charge.

As we head into today, retail sales numbers are coming out, which could shake the boat a bit if the report isn't steady. However, I don't expect this report to impact market sentiment significantly.

We will also see S&P Global PMIs. For the most part, everything seems to continue in the same pattern we've seen for a while: every time the markets look like they might turn negative, they rally and make a new all-time high.

There are targets for the S&P 500 by year-end at 6100 plus, which is not far from where we are now. I saw some amusing reports that some analysts have raised their expectations for 2024 to 5600 while we're already trading in the 5500 range—quite funny.

This recent rally happened without the help of NVIDIA, which flattened off and was down 0.7%. Several weeks ago, I mentioned NVIDIA reaching between 1300 and 1500, which translates to the 130 level with the 10-for-1 split. We've already achieved those targets.

One of the more impressive things is that Microsoft and Apple were negative but turned very positive by the end of the session, showing the underlying strength is still present. Yesterday's gains were stronger than expected and point to further gains, as the

momentum, especially on intermediate and longer-term charts, suggests much higher levels.

Looking Back on Monday’s Action

Today's trade was somewhat mixed despite a solid performance at the index level. The market-cap-weighted S&P 500 extended its record high, climbing 0.8%, and the equal-weighted S&P 500 registered a 0.7% gain. Decliners had a slim lead over advancers on the NYSE and the Nasdaq.

The underlying negative bias, driven by consolidation activity, was insufficient to offset buying activity in some mega-cap stocks. Outsized gains in Apple (AAPL 216.67, +4.18, +2.0%) and Microsoft (MSFT 448.37, +5.80, +1.3%), two of the three stocks with a market cap above $3 trillion, provided support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) was up 0.9%.

Broadcom (AVGO 1828.87, +93.83, +5.4%) was another top performer today, along with other semiconductor-related names. The PHLX Semiconductor Index (SOX) jumped 1.6%. Strength in the mega-cap and semiconductor spaces also boosted the S&P 500 information technology (+1.2%) and consumer discretionary (+1.4%) sectors to the top of the leaderboard today. These sectors combined comprise 43% of the index.

The rate-sensitive real estate (-0.8%) and utilities (-0.5%) sectors were the top laggards, clipped by a jump in yields. The 10-year note yield closed seven basis points higher at 4.28%, and the 2-year note yield settled eight higher at 4.76%.

Today's economic data was limited to the NY Fed Empire State Manufacturing Index, which rose to -6.0 in June (KR Forecast consensus -13.0) from -15.6 in May.

·Nasdaq Composite: +19.0% YTD

·S&P 500:+14.8% YTD

·S&P Midcap 400: +5.0% YTD

·Dow Jones Industrial Average: +2.9% YTD

·Russell 2000: -0.3% YTD

Looking ahead, Tuesday's economic Releases

May Retail Sales report at 8:30 ET. Other data include:

- 9:15 ET: May Industrial Production (KR Forecast consensus 0.4%; prior 0.0%) and Capacity Utilization (KR Forecast consensus 78.5%; prior 78.4%)

- 10:00 ET: April Business Inventories (KR Forecast consensus 0.3%; prior -0.1%)

- 16:00 ET: April Net Long-Term TIC Flows (prior $100.5 billion)

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