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Stock market at the moment: S&P 500 set to construct on document excessive with Powell on deck

Jul 9, 2024 | blog

US shares have been poised to renew their record-setting climb on Tuesday, as buyers assessed issues a few pullback within the anticipate Federal Reserve chair Jerome Powell to talk.

S&P 500 futures (ES=F) edged up 0.2%, whereas these on the tech-heavy Nasdaq 100 (NQ=F) led the best way increased with a 0.4% acquire. Dow Jones Industrial Average (YM=F) futures have been little modified.

Stocks have floor out contemporary all-time highs as indicators of a US financial slowdown bolster bets on interest-rate cuts. The benchmark S&P 500 (^GSPC) booked its thirty fifth document shut of the yr on Monday, whereas the Nasdaq Composite (^IXIC) took out a document of its personal as chip shares outperformed.

Powell ought to make clear the Fed’s image of the financial system when he provides his twice-yearly coverage replace to Congress, beginning Tuesday with an look within the Senate. Testimony to the House follows the following day, setting the stage for a key replace on shopper inflation on Thursday — all potential catalysts for shares in the event that they affirm a cooling.

But a notice of warning is seeping into the market as the thought of a summer season pullback will get extra backers, with Morgan Stanley strategist Mike Wilson calling for a ten% correction.

Wall Street is getting chilly ft about this coming earnings season, given the increased bar of expectations they face this time round. At the identical time, buyers are beginning to query the large inflows into AI-linked shares which have pushed the latest rally, given the tech’s affect continues to be unproven.

On the company entrance, BP’s (BP) US-listed shares fell over 4% in pre-market buying and selling after the power large warned of a refining droop and factory-linked writedown of as much as $2 billion. Meanwhile, Novo Nordisk (NVO) inventory slipped after Wegovy misplaced out to Eli Lilly’s (LLY) Mounjaro in an evaluation of rival weight-loss medication.

Live2 updates

  • Interesting commentary on Chipotle

    Chipotle (CMG) continues to be a beloved model, regardless of TikTookay posts suggesting the chain has in the reduction of on its infamous large portion sizes.

    Interestingly, the corporate’s $15 bowls and $10 burritos seem like extra beloved by lower-income households.

    Stifel analyst Chris O’Cull coming in sizzling with this analysis at the moment:

    “After reviewing mobile location data suggesting strong traffic performance in 2Q, we raised our same-restaurant sales projection to 10% from 8.5% (Street 8.8%). Interestingly, while the strength continued the broad-based trend from 1Q, growth from lower-income consumers outpaced growth from middle- and high-income consumers during the quarter. Given industry comments about weaker spending by lower-income consumers, we believe the positive value perception of CMG across all income segments contributed to the traffic performance.”

    O’Cull reiterated his purchase score on the inventory.

    Lower income households flock to Chipotle given greater value perception.

    Lower revenue households flock to Chipotle given higher worth notion. (Stifel)

  • Morning Apple vibes

    For these of you retaining rating at residence: Apple’s (AAPL) market cap is now at $3.5 trillion and Nvidia’s (NVDA) is at $3.15 trillion.

    To that finish, good notice out this morning from Piper Sandler analyst Matt Farrell after a 30% run in Apple since April:

    “Since early April, Apple is up over 30% (compared to S&P500 up over 5%), on the back of 1) Apple Intelligence excitement and 2) a potential bounce back in iPhone shipments in China. From our perspective, the excitement is warranted, as AI could be a needle mover for upgrades. In addition, a return to growth in iPhone sales in China could create a tailwind as well in the second half. However, given the current valuation (~32x near-term consensus EPS) and the growing risk of a consumer spending headwind, we feel like a lot of good news is already priced into the stock.”

    Farrell is sticking with a impartial score on the inventory.

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