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Nasdaq leads stocks higher after Biden backtracks
U.S. stocks rose on Monday, with technology leading gains as investors weighed the potential fallout President Joe Biden’s departure of the presidential race.
The S&P 500 (^GSPC) gained 07%, while the Nasdaq Composite (^IXIC) rose about 0.5%, both coming off their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) erased previous gains and remained close to the flat line.
Heavyweight in Nvidia chips (NVDA) led a broad recovery in the technology sector after big losses last week as investors dumped large-cap names.
Investors are looking at a changed political landscape after Biden cancelled his candidacy for re-election on Sunday and supported his vice president, Kamala Harris, to replace him as the Democratic candidate. The political shock could inject more volatility into a already mistreated stock market, distracting the focus of this week’s flood of gains and key inflation disclosure.
Biden’s move, although it is not unexpected after weeks of pressure, is seen on Wall Street as eroding Republican candidate Donald Trump’s chances of securing a return to the White House. This could lead to a light unfolding of the recent “Trump trade“bets on assets seen as benefiting from a second Trump presidency, such as bitcoin, bank stocks and higher U.S. bond yields. The benchmark 10-year Treasury yield (^TNX) fell in the early hours of Monday.
Meanwhile, earnings season is about to pick up steam, with a slew of S&P 500 companies set to report results in a week headlined by Alphabet (GOOGL, GOOG), Tesla (TSLA) and Chipotle (CMG).
Those results will provide a snapshot of the economy and consumer sentiment ahead of Thursday’s report on second-quarter GDP and Friday’s update on the Federal Reserve’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index.
Live8 Updates
- Mon, 22 Jul 2024 at 17:51 GMT+2
Cryptocurrency grows in political respect as Donald Trump courts bitcoin enthusiasts
David Hollerith of Yahoo Finance reports:
Cryptocurrency is rising again on a new wave of political respect as former President Donald Trump is preparing to speak at a bitcoin conference this week in Nashville.
The price of bitcoin (BTC-USD) has surged more than 13% in the past month and surpassed $68,000 in the past 24 hours, putting the world’s largest cryptocurrency within striking distance of an all-time high set earlier this year.
This week, cryptocurrency investors are anticipating several reasons to get excited, including Securities and Exchange Commission Approvals for Large Wall Street Fund Managers to Issue Exchange-Traded Funds containing ether (ETH-USD), the second largest cryptocurrency in the world.
To read more here:
Technology regains leadership as Nvidia, Tesla and Alphabet shares rise
Technology stocks regained market leadership on Monday after a massive sell-off in large-cap names on the Nasdaq last week (^IXIC) and S&P 500 (^GSPC).
The S&P 500 Technology ETF (XLK) gained more than 2%, reversing a recent outflow from the sector.
Heavyweight in Nvidia chips (NVDA) gained more than 4%, while electric vehicle giant Tesla (TSLA) rose more than 3%.
Meta social media platform (GOAL) also gained more than 2%. Tech giant Alphabet (GOOGL, GOOG) surged more than 2%. Alphabet and Tesla are expected to report quarterly results on Tuesday after the market close.
Technology regains market leadership on Monday, with shares in Nvidia, Tesla and Meta rising.
Coca-Cola should see momentum continue in Q2 despite cautious consumers
Investors expect Coca-Cola (KO) will maintain its momentum and report a busy quarter on Tuesday, Yahoo Finance’s Brooke DiPalma reports.
Based on Bloomberg estimates, Wall Street expects to see revenue reach $11.76 billion, down 1.75% from a year ago. Earnings per share are estimated at $0.81, up 3.31% year over year.
This is compared to Q1, when Coca-Cola reported $11.3 billion in revenue, beating Wall Street estimates of $10.96 billion, while its earnings per share of $0.72 beat expectations of $0.70.
The company’s price increases should boost growth again this quarter, according to CFRA analyst Garrett Nelson.
To read more here.
Nvidia rises 4% as chip stocks rally
Chip stocks rebounded on Monday after a week of big losses in the semiconductor sector.
AI heavyweight Nvidia (NVDA) shares rose more than 4% in early trading after losing more than 8% last week.
Chip manufacturer ASML (ASML) shares gained more than 3%. Semiconductor foundry TSMC (TSM) also increased.
The chip sector has suffered steep losses recently as investors have pulled out of technology stocks. These declines have been worsened last week as geopolitical headwinds emerged for the semiconductor industry.
Chip stocks rebounded on Monday
Nasdaq opens higher after Biden drops out of presidential race
Major averages opened higher on Monday as investors assessed the path of the presidential election after President Joe Biden has left the 2024 race.
The S&P 500 (^GSPC) rose sharply, while the Nasdaq Composite (^IXIC) rose 1% at the opening after both indexes ended Friday with its worst weekly losses since April. The Dow Jones Industrial Average (^DJI) rose 0.1%.
On Sunday, Biden cancelled his candidacy for re-election and endorsed Vice President Kamala Harris to replace him at the top of the Democratic ticket.
Investors are waiting for a flood of gains and an important PCE inflation release this week.
Alphabet (GOOGL, GOOG), Tesla (TSLA) and Chipotle (CMG) are some of the companies that will release quarterly results this week.
Starbucks Meets Elliott at Its Door
It’s good to see Starbucks (SBUX) receiving a wake-up call.
The WSJ reported Friday night that Elliott Management has acquired a stake in the struggling coffee seller.
In typical Starbucks fashion, they told Yahoo Finance that they “do not comment on rumors or speculation.” However, Elliott is now involved here, based on my understanding of the situation.
I outlined 10 Things Wrong With Starbucks on X. Many of these are deep-rooted problems that I’ve seen fester over the past decade, so Elliott, for all his power, is unlikely to be able to fix them.
But Bernstein restaurant analyst Danilo Gargiulo sees a path to unlocking shareholder value at Starbucks.
Here they are:
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Invest in top-tier talent and leadership with restaurant and operational experience.
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Reduce unit growth and accelerate the transition to more specific stores.
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Redefine the perception of value.
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Accelerate productivity and improve predictability of service times.
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Improve the consumer experience.
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Invest in purposeful innovation to attract loyal consumers and younger generations.
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Reestablish brand neutrality regarding political positions (move headquarters from Seattle?).
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Franchise operations in China.
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Optimize expenses.
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Reset long-term guidance and market expectations.
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Eyes on: Nvidia
Nvidia (NVDA) is picking up a bid this morning, up 2% premarket on an upbeat 30-day trading forecast from Citi.
Says Citi’s Atif Malik:
“We are opening a positive catalyst alert on NVDA at the SIGGRAPH 2024 conference for three reasons. First, NVIDIA CEO Jensen Huang and Meta (GOAL) CEO Mark Zuckerberg will likely discuss the future of AI, and we believe NVIDIA may announce the long-awaited standalone Arm-based Grace CPU for servers. Second, the CEO’s discussion should shed positive light on how NVIDIA’s end customers make money or its ROI profile, a hot topic on investors’ minds these days. Third, we expect to hear an accelerating demand trend for AI on the call with no signs of an air pocket, and we view the recent pullback in the stock (13% P/E discount to 3-year average) on geopolitical concerns as a buying opportunity.”
SIGNOGRAPHER begins on July 28. Huang is scheduled to hold two informal chats.
One thing to watch for in today’s session after Biden’s decision
Keep an eye on the “Trump Trade” after Biden’s decision not to seek re-election.
Last month, stocks seen as tied to Trump’s potential policies rose sharply — for example, shares of Exxon Mobil Corporation (XOM) rose 5% last month. Lockheed Martin (LMT) rose 1.6%, outperforming the S&P 500 (^GSPC).
Here’s the vibe of the Trump Trade, according to BTIG policy expert Isaac Boltansky:
“With a new Democratic presidential challenger expected, we may see a reversal in some market moves tied to the ‘Trump Trade.’ This is understandable, as markets will be forced to reassess Trump’s chances of winning without knowing his official challenger. Additionally, we believe Biden’s exit leaves the House more of a toss-up than a Republican tilt. That said, we continue to view Trump as the slight favorite and note that many beneficiaries of a second Trump administration are based on administrative changes rather than legislative changes. These beneficiaries include private prisons, digital assets, and companies exposed to an increase in M&A. Trump’s trade policy would likely be largely the same under a divided government scenario as well. We continue to expect a delay and extension of most of the $4.6 trillion in expiring tax provisions, but overall, spending should be relatively easier under a divided government scenario.”
