Monday Market Highlights
Monday’s market session showcased contrasting performances among mega-cap equities, with Tesla driving broader gains even as Nvidia struggled. Early volatility emerged as the 10-year Treasury yield briefly touched 4.5%, but a slight retreat in yields allowed equities to rebound. Advancing shares outpaced decliners by a two-to-one margin, with heavier-than-normal trading volumes and optimism around a potential federal framework for self-driving cars fueling Tesla’s performance.
Nvidia faced headwinds due to concerns about overheating issues in its new Blackwell graphics processing units ahead of its earnings release on Wednesday. Despite this, management downplayed the concerns as routine.
Sector and Index Performance
The broader market displayed signs of recovery, with all 11 S&P 500 sectors closing higher compared to Friday’s levels.
- Energy shares: Gained 1.2%, supported by a 3% increase in crude oil prices amid heightened geopolitical tensions in Ukraine.
- Nasdaq Composite: Rose 0.6%, outpacing other indices.
- S&P 500: Increased 0.4%.
- Dow Jones Industrial Average: Declined 0.1%, pressured by losses in Nike and Goldman Sachs shares.
Despite caution stemming from the Federal Reserve’s hawkish tone, the market demonstrated resilience. Upcoming retail earnings and housing data may provide additional direction this week.
Latest Market Update
U.S. Futures
U.S. equity futures were little changed on Tuesday as investors awaited key earnings reports, including those from Nvidia and major retailers. Optimism around potential rate cuts and expectations of a more business-friendly administration supported market sentiment.
Asian Markets
Asian equities rose on Tuesday, with notable performances:
- Australia’s ASX 200: Outperformed with a 1.1% rise, driven by mining and energy shares.
- Japan: Gained ahead of inflation data.
- China: Lagged due to cautious sentiment over weak stimulus and ongoing economic challenges.
European Markets
European markets closed lower on Monday:
- Stoxx 50: Fell 0.2%, with mixed sector performance.
- Declines: Novo Nordisk, ASML Holding, Hermes International.
- Gains: SAP, Nestlé, LVMH.
Investors remained focused on key economic data and central bank insights.
Commodities and Currency
Treasury Yields
U.S. Treasury yields showed minor movement on Monday:
- 10-year Treasury note yield: Eased by one basis point to 4.41%.
Currency Market
- Dollar Index: Held steady around 106.2 on Tuesday, following recent profit-taking.
- The dollar weakened against the euro as ECB officials raised concerns over potential U.S. trade tariffs affecting eurozone growth.
- Despite this, the dollar remains up by about 6% since September, driven by expectations of fewer Federal Reserve rate cuts.
Oil Prices
Oil prices edged lower in early Tuesday Asian trading after sharp gains on Monday:
- Norwegian production disruptions and escalating Russia-Ukraine tensions pushed prices higher previously.
- Concerns about slowing demand, particularly from China, and fears of a supply glut tempered further price increases.
Equities on the Move
Top Movers
Several companies experienced significant share price movements due to earnings, analyst ratings, or other news:
- Super Micro: Shares jumped 16% during regular trading and nearly 40% after-hours after appointing BDO USA as its auditor and submitting a plan to regain Nasdaq compliance. The company has also seen inflows from large investors recently.
- Alphabet: Faces potential antitrust action from the U.S. Department of Justice, which may seek to force the sale of its Chrome browser and impose restrictions on AI and Android operations, according to Bloomberg.
- Enel: Updated 2025-2027 guidance projects an 8.2% EBITDA growth and a higher dividend per share floor. Analysts at Jefferies raised the price target by 12% to €9.00, citing growth potential despite regulatory risks and power price fluctuations.
- Dell Technologies: Analysts highlighted Dell’s increasing share in the AI server market, driven by demand for Nvidia GPUs. Mizuho raised Dell’s price target, citing strong growth in AI server spending, particularly among Tier 2 CSPs and major customers like Apple.
- Robinhood: Shares surged over 8% on Monday after Needham upgraded the equity to “buy,” citing potential benefits from a more crypto-friendly SEC leadership and recent cryptocurrency expansions. The price target was set at $40, highlighting improved growth prospects and EBITDA margins.
Expert Insights
Oppenheimer analysts believe the current bull market will extend into 2025, with a market peak expected in 6-12 months. They recommend focusing on high-momentum equities while avoiding lagging stocks as the market progresses.
Upcoming Data and Events
Key data and events investors are monitoring include:
- Earnings Reports: Results from major retailers, including Walmart and Lowe’s.
- Housing Data: October housing starts and building permits.
- Economic Indicators: Updates from the Atlanta Fed’s GDPNow indicator and October’s leading economic indicators.
For more information visit https://cc.com.mt/. The information, views, and opinions provided in this article are solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice.
