Wall Street Today | Apple, Nvidia Drive S&P 500, Nasdaq Higher
RECAP
US stocks rebounded, sending the $S&P 500 Index(.SPX.US$ higher, buoyed by gains in tech giants $Apple(AAPL.US$ and $NVIDIA(NVDA.US$.
Chipmakers also dominated as the improving outlook for $Taiwan Semiconductor(TSM.US$ fueled optimism of a global recovery in demand. Declining jobless claims are also supporting the thesis for a soft landing that could support consumer spending and corporate margins. That's helping offset the negative sentiment that comes from fading hopes of massive interest rate cuts by the Federal Reserve this year.
The S&P 500 closed 0.9% higher after two straight sessions of declines. The tech-heavy $Nasdaq Composite Index(.IXIC.US$ advanced 1.4%, while the $Dow Jones Industrial Average(.DJI.US$ gained 0.5%.
MACRO
Resilient Job Market
The weekly number of Americans who filed for unemployment benefits for the first time in mid-January fell to a 16-month low of 187,000, according to the Department of Labor. That adds to evidence of a resilient labor market that is helping weaken the case for aggressive interest rate cuts.
Cleveland Fed President Raphael Bostic said he expects policymakers to start lowering borrowing costs in the third quarter, dousing hopes that the cuts would come as early as March.
Mortgage Rates Lowest Since May
Meanwhile, mortgage rates fell this week to their lowest level since May 2023, providing some relief to first-time homebuyers who are sensitive to changes in housing affordability, according to $FREDDIE MAC(FMCC.US$.
SECTORS
US Crude Oil Stockpiles Drop
Crude oil futures rose in New York as inventories in the United States fell more than expected, overshadowing a cut in International Energy Agency's forecast for 2024 demand growth. Stockpiles fell 2.49 million barrels last week to the lowest since October, Bloomberg reported.
The International Energy Agency slashed its 2024 demand-growth forecast to 1.2-milllion barrels per day from its prior 2.3-million bpd target, sharply lower than demand growth of 3.2-million bpd in the second quarter of 2023, MT Newswires reported. Slowing economic growth, higher fuel efficiency standards and expanding electric-vehicle fleet are to blame for the weaker demand forecast, according to the agency's monthly market report.
COMPANIES
AMD Climbs to New Record, Nvidia Rises
$Advanced Micro Devices (AMD.US)$ shares climbed to a new record and $NVIDIA (NVDA.US)$ extended its meteoric rally after the outlook released by $Taiwan Semiconductor (TSM.US)$ signaled brightening prospects for the industry.
Taiwan Semiconductor, known as TSMC, expects revenue growth to bounce back to at least 20% in 2024, Bloomberg reported. That's a reversal of fortune for the chipmaker that reported an 8.7% decline in revenue in 2023.
Apple Upgraded
$Apple(AAPL.US$ shares advanced after Bank of America Securities upgraded the stock to buy from neutral, citing upside potential to its hardware and services business. The analyst also raised the price target for Apple to $225 from $208.
Alibaba, JD Offer iPhone Discounts
$Alibaba(BABA.US$ 's Tmall is offering discounts of as much as $140 on some iPhone models in China, while $JD.com(JD.US$ is selling iPhone 15 at an even steeper markdown as $Apple(AAPL.US$ faces flagging sales in the Asian nation, Nikkei reported.
Microsoft's Accelerating Growth
$Microsoft(MSFT.US$'s revenue growth is expected to accelerate to solid high teens from current mid-teens level as the tech giant benefits from continued strength of its cloud business Azure and M365, MT Newswires quoted Bank of America Securities as saying. The company is scheduled to release its fiscal second quarter earnings after the market closes on Jan. 30.
Spirit Airlines' Debt Woes
Shares of $Spirit Airlines(SAVE.US$ lost as much as a third of their value before paring losses after The Wall Street Journal reported the budget airline is looking at options including a potential restructuring as its near-term debt comes due. The stock has been on a steep downtrend following a ruling by a federal judge blocking $JetBlue Airways(JBLU.US$'s $3.8 billion deal to buy the low-cost carrier.
Starbucks Under Pressure
$Starbucks(SBUX.US$ shares are expected to remain under pressure until its same store sales outlook improves, MT Newswires quoted Wedbush as saying in a note Thursday. The coffee chain's same store sales growth for fiscal first quarter is expected to be slightly below to in-line with consensus of 6.2%, Wedbush said, as it maintained the company's stock at neutral and lowered the price target to $95 from $100, according to the report.
- Luzi Ann Santos | moomoo News
Source: Bloomberg, Dow Jones, CNBC, Reuters
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested into. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. See this link for more information.
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Cypher : Bostic is the Atlanta Fed president, not Cleveland’s. Loretta Mester is Cleveland’s.