Market Overview
The S&P 500 and Nasdaq Composite extended their record highs today ahead of the holiday tomorrow. Bond and equity markets are closed Wednesday for Juneteenth.
There wasn't a lot of conviction from either buyers or sellers ahead of the break, as stocks continue to hit all-time highs. Advancers had a 4-to-3 lead over decliners at the NYSE, while decliners led advancers by the same margin at the Nasdaq.
Top-Weighted S&P 500 Components
Many of the top-weighted S&P 500 components closed with losses, keeping the broader market in check. Notable losers included:
- Apple (AAPL, Financial) at $214.29, down 1.1%
- Microsoft (MSFT, Financial) at $446.34, down 0.5%
- Meta Platforms (META, Financial) at $499.49, down 1.4%
Gainers
A solid jump in shares of NVIDIA (NVDA, Financial) at $135.58, up 3.5%, provided some offsetting support. The stock responded to news of a collaboration between Deloitte, Hewlett Packard Enterprise (HPE) at $21.84, up 1.4%, and NVIDIA on co-developed generative AI solutions.
Sector Performance
Gains in some of the aforementioned names boosted the information technology sector by 0.6%, placing it toward the top of the leaderboard today. The financial sector was another top performer, gaining 0.6%.
Meanwhile, the consumer discretionary sector was among the top laggards, dropping 0.4%, due in part to weakness in homebuilder stocks after Lennar (LEN) at $148.72, down 5.0%, reported earnings. Selling in the stock was related to a disappointing outlook for a sequential decline in orders.
Treasury Yields
Treasury yields moved lower today. The 10-year note yield settled six basis points lower at 4.22%, and the 2-year note yield declined six basis points to 4.70%.
This price action followed a batch of mixed economic data, including weaker-than-expected retail sales, stronger-than-expected industrial production, and in-line business inventories. Treasuries also reacted to today's impressive $13 billion 20-year bond reopening.
Year-to-Date Performance
- Nasdaq Composite: +19.0% YTD
- S&P 500: +15.0% YTD
- S&P Midcap 400: +5.3% YTD
- Dow Jones Industrial Average: +3.0% YTD
- Russell 2000: -0.1% YTD
Today's Economic Data
- May Retail Sales: +0.1% (consensus 0.3%); Prior revised to -0.2% from 0.0%
- May Retail Sales ex-auto: -0.1% (consensus 0.2%); Prior revised to -0.1% from 0.2%
The key takeaway from the report is that it reflects some slowing in consumer spending on goods, which will be accounted for in weaker Q2 real GDP forecasts.
- May Industrial Production: +0.9% (consensus 0.4%); Prior 0.0%
- May Capacity Utilization: 78.7% (consensus 78.5%); Prior revised to 78.2% from 78.4%
The key takeaway from the report was that gains were widespread across major market groups, with particular strength in manufacturing output, mitigating hard-landing concerns.
- April Business Inventories: +0.3% (consensus 0.3%); Prior -0.1%
Upcoming Economic Data
Wednesday's calendar features the release of the weekly MBA Mortgage Applications Index at 7:00 ET and the June NAHB Housing Market Index at 10:00 ET.
Guru Stock Picks
Warren Buffett has made the following transactions:
Today's News
Nvidia (NVDA, Financial) reached a value of $3.3 trillion on Tuesday, surpassing Microsoft (MSFT, Financial) and Apple (AAPL, Financial) to become the highest valued company in the world. Shares of Nvidia have surged as much as 180% year-to-date and over 200% in the last 12 months, driven by a significant demand for its AI chips. Nvidia’s market cap has risen more than tenfold in the past four years, from around $323.24 billion in 2020 to $3.32 trillion at present.
Interactive Brokers (IBKR) reported heavy trading activity in Nvidia (NVDA, Financial) following the AI chipmaker's recent stock split. Nvidia had grossed 571.3K trades across its stock and options over the past five trading sessions, outpacing Tesla (TSLA, Financial) activity. The stock split and a surge in demand for AI technology have contributed to Nvidia's dominance in the market.
Nvidia (NVDA, Financial) insiders reportedly sold shares worth over $700 million so far this year. The value of shares sold was significantly higher compared to previous years, driven by a nearly 177% jump in Nvidia stock over the past year. CEO Jensen Huang was among the executives who sold shares, with his most recent sale amounting to over $31 million in June.
Nvidia (NVDA, Financial) agreed to acquire Shoreline.io, a startup for software developers, in a transaction valued at about $100 million. This acquisition aligns with Nvidia's strategy to expand its capabilities in AI and software development.
Knox Ridley, portfolio manager at Tech Insider Network, expressed a bullish outlook on Nvidia (NVDA, Financial), predicting that the company will dominate the AI market similarly to how Apple (AAPL, Financial) ruled the mobile industry. Ridley’s firm forecasts that Nvidia could reach a market cap of $10 trillion by 2030.
Mastercard (MA, Financial) declared a quarterly dividend of $0.66 per share, maintaining its forward yield at 0.59%. The dividend is payable on August 9 to shareholders of record as of July 9.
Jennifer Warren, founder of Concept Elemental, highlighted significant shifts in the energy market, emphasizing the importance of energy transition, supply chain reshuffling, and geopolitics. She noted that demand for natural gas will remain strong, although regional volatility is expected.
Analyst Michael Boyd recommended investing in EQT Corp. (EQT, Financial) and Comstock Resources (CRK, Financial) due to the expected growth in demand for liquid natural gas (LNG). EQT is positioned to benefit from rising LNG prices and the Mountain Valley Pipeline, while Comstock’s location near LNG export terminals is advantageous.
W. P. Carey (WPC, Financial) announced the pricing of an underwritten public offering of $400 million aggregate principal amount of 5.375% Senior Notes due 2034. The Notes were offered at 98.843% of the principal amount.
Netflix (NFLX, Financial) shares continued their upward trend, closing 1.5% higher at $685.7 on Tuesday. The stock has gained nearly 5% over the past six sessions and is up 10% over the past month.
Main Street Capital (MAIN, Financial) shares also traded positively, marking the seventh straight day of gains. The stock closed up 0.38% at $49.75 and has risen 30.8% over the last 12 months.
Apple (AAPL, Financial) has reportedly suspended work on the next version of its Vision mixed-reality headset to focus on a more affordable version. The tech giant aims to make the headset more accessible, similar to its approach with the iPhone.
Wedbush Securities' Dan Ives predicted that the ongoing bull market in U.S. technology stocks will continue until possibly 2027. The S&P 500 Information Technology sector has climbed approximately 31% this year, driving the broader market's performance.
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