10.8.24 Tech Leads, Near Term Outlook

Summary

This Insider briefing covers the current state of the S&P 500, noting a strong market performance despite choppy trading. The speaker discusses trends, technology sector growth, and the impact of geopolitical factors, such as Hurricane Milton in Florida. Specific stocks, including Meta, Nvidia, and small caps, are analyzed for potential trading opportunities. The briefing also touches on investor concerns, particularly around the election cycle, and emphasizes the importance of strategic, long-term positioning in a volatile market.

Takeaways

• 📈 The S&P 500 remains in range, showing choppy movement, but is trending towards challenging all-time highs.
• 🚀 Monday’s market dip reflected profit-taking after Friday's jobs report, but overall momentum is positive.
• 💼 The S&P 500 closed at its second-highest level ever, signaling strength and potential for further gains.
• 📊 Equal-weighted technology stocks outperformed the broader market, showing positive trends in the tech sector.
• 💡 Market strength is supported by reduced geopolitical concerns and less severe hurricane impacts in Florida.
• 🔮 Small-cap stocks are expected to rally later in the year, but some investors remain cautious until after the elections.
• 🏦 Investors are holding over $6 trillion in cash due to uncertainty, especially around the upcoming election cycle.
• 💻 Nvidia continues to show strength, with targets set at $137.50 and a higher price point of $140 in focus.
• 🛳 Carnival Cruises and the luxury travel sector are showing strength, signaling potential tailwinds for small-cap stocks.
• 🏡 The housing market is expected to pick up gradually, with refinancing making up over 52% of new mortgages.

Q & A

What was the general sentiment about the S&P 500 at the start of the briefing?

The sentiment was that the S&P 500 would remain in range, despite recent choppy action. There was a possibility of challenging all-time highs, with a positive market outlook for the week.

What was notable about the S&P 500's close mentioned in the briefing?

The S&P 500 had its second-highest close of all time, just 6 cents below the previous record, indicating a sharp rebound and aligning with the view of market strengthening.

How does the speaker view the potential of reaching all-time highs?

The speaker believes there is a strong probability of breaking into all-time high territory between now and the end of the next week, with a target high-end view of 5840 for the S&P 500.

What is the significance of the technology sector's performance mentioned in the briefing?

Technology led the market, which is viewed as a positive sign. The equal-weighted technology sector outperformed the equal-weighted S&P 500, indicating broader participation in technology stocks.

How did geopolitical factors and natural disasters like Hurricane Milton impact the market?

The market was positively impacted by the fact that Hurricane Milton was downgraded from a category 5 to a category 3 or 4, which reduced market nervousness. Geopolitical factors were relatively quiet, contributing to market stability.

What was the speaker's view on Meta's stock performance?

The speaker viewed Meta as having hit its profit target for the year. While it is currently pulling back and moving sideways, the speaker expects to re-evaluate Meta and set a higher target in the future, believing the company has not yet peaked.

What is the forecast for small-cap stocks, according to the briefing?

The speaker expects a strong rally in small-cap stocks before the end of the year, potentially breaking yearly highs and challenging all-time highs. The view is that as economic clarity improves, small-cap stocks will gain momentum.

What is the outlook on Nvidia, and what are the target resistance points?

The speaker is bullish on Nvidia, with a next resistance point at 140. The stock has established a higher base, with successful trades off previous resistance points like 115 and 130. The next bounce area is seen at 137.5.

What is the speaker's strategy for Tesla in the current market conditions?

The speaker is cautious about entering trades with Tesla at the current price levels. They are waiting for a stronger pullback, feeling more comfortable with Tesla in the 230s range before making a move.

What is the current market perspective on PayPal?

PayPal is seen as an opportunity to run up to the mid to high 80s. The speaker is looking for a potential pullback to take advantage of, seeing strong fundamentals for the stock.