Categories: Finance

Tech giants decline in last few hours on Micron’s outlook: Market down

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(Bloomberg) — Heavy tech faces a collision in the overdue purchase and sale of U.S. Micron Era Inc. The outlook failed to meet lofty expectations for the business, which has driven a bull market in stocks.

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The $285 billion of exchange-traded capital Treasuries tracking the Nasdaq 100 (QQQ) missed the maker of laptop memory chips’ forecast sales, which lagged some investors’ estimates. Micron declined late, leaving some chipmakers including giant Nvidia Corp unscathed. Also like the upcoming Wall Side Road, the Federal Reserve said the largest US banks passed once-a-year stringency checks, paving the way for higher shareholder payouts.

The new market target exiting the megacap team was short-lived, with many measures still showing how weak the market remains – raising doubts about the durability of the rally. According to Bloomberg Wisdom, the divide between the performance and breadth of the S&P 500 has reached one of the worst levels in three decades.

“The stock market is very dependent on big tech – the length and end of the story,” said David Bahnsen at The Bahnsen Workforce. “Whether last week’s volatility in tech is the beginning of something deeper or whether the reckoning is still to come remains to be seen, but excessive investor sentiment, euphoria and exaggerated momentum always end the same way.”

The S&P 500 reached nearly 5,480. FedEx Corp emphasized bullish forecasts and buyback plans. Amazon.com Inc. Reached a valuation of $2 trillion, taking e-commerce deep into the file length.

The Treasury 10-year handover was crowned at 4.3%. Sales of $70 billion of five-year notes showed signs of good demand. This is the greenback’s best rally since November. The yen slipped to its weakest level since 1986, raising the possibility of intervention.

“As we enter the summer months, the market’s ‘engine warning light’ has turned on,” said Piper Sandler’s Craig Johnson. “Investors in tech-heavy indices are experiencing FOMO, while investors in the rest of the market are feeling ROMO (regret missing out) as the overall market cap remains weak outside a handful of mega-cap stocks.”

The S&P 500 is on track to deliver a strongly confirmed performance for the first six months of the year, driven by a rally in the biggest names. According to Jack Ablin at Cresset, dividing the five hundred index stocks by capitalization quintiles presents a gentle laddering trend of efficiency: the larger the patronage, the easier it is.

“Much of the difference is due to the ‘higher for longer’ interest rate environment,” Ablin said. “Investors believe that megacap tech companies – because of their ability to generate cash – are less dependent on borrowing and, as companies that do need to borrow, have more capital than their smaller brethren There is very easy access. So, where are the markets headed in the second half of 2024?”

Ablin expects US equity markets to rise later this year as the prospect of a rate cut comes into focus.

“This means that high-quality companies, especially those with consistent dividend growth, will continue to lead their lower-quality counterparts in an increasingly restrictive lending environment,” he said.

Mark Haefele at UBS International Wealth Control says that while Nvidia’s age-old volatility has driven sentiment, the structural investment case for artificial data remains intact on some AI adoption and monetization features. He also has a positive outlook for broader equities amid solid fundamentals.

He added, “We maintain our positive outlook on the AI story, but believe it is important to power the technology exposure to offset the volatility while maintaining the technology’s strategic performance, which we believe will continue in the coming years.” Ready to accelerate growth.”

Bloomberg Wisdom’s sector rotation fashion says it’s past time for an ancient management to emerge – and the strength, fitness to dominate the index in the second half because the best-supported sector provides a hand and financial support.

“The tech and technology-related communications sector has the strongest value momentum – but declining earnings dominance and elevated relative multiples have pushed both groups down in our ranks,” wrote BI strategists led by Gina Martin Adams.

As for second-quarter earnings season, the “Magnificent Seven” megacaps are still expected to account for the majority of total S&P 500 growth, according to Strategos’ Ryan Grabinski.

“What is encouraging for us is that the estimates for the remaining 493 have been improving since the third quarter as the growth rates of both the top of the market and the rest of the market have normalized,” he said. “Should this extension be successful, it would be an encouraging sign for the sustainability of the bull market.”

The S&P 500 is set to enter Phase 2 with a gain of about 15% since the beginning of 2024. And July has ranked as the strongest time of year for the equity gauge since its inception. over the most recent 20 years, according to data compiled by the Bespoke Investment Workforce.

“What’s even more interesting is that, considering the last 20 years, July’s outperformance is the eye of the storm,” Bespoke said. “July ranked between June, August and September – the three worst months of the year – with average declines of 0.17%, 0.10% and 0.7% respectively.”

Company Highlights:

Jefferies Monetary Workforce Inc.’s profit rose as investment-banking income surged and loan underwriting more than doubled, a sign that the outlook for the biggest U.S. banks has brightened.
Interactive Agents Workforce Inc. currently stands to lose $48 million due to disruption in New York store trade trading and is considering its options to get the money back, including possible criminal action.
Robert Bosch GmbH is looking at a trade for the applications maker, Whirlpool Corp told Reuters.
A mechanic who worked on Boeing Co.’s 787 airplanes alleged that he witnessed faulty production at a subcontractor for the Dreamliner program, according to comments from lawyers representing him as a whistleblower.
A McDonald’s Corp. executive reiterated that the company’s previous U.S. testing of plant-based meat did not yield results and said the burger chain’s eaters do not go to its restaurants for salads. Past Meat Inc. has partnered with McDonald’s to assemble the McPlant burger.
Moderna Inc. Shares sank after fresh data showed the efficacy of its RSV shot fell sharply in its second year and paled in comparison to rival vaccines.
Basic Turbine Inc., maker of Cheerios, gave a disappointing sales outlook as consumers look back amid rising grocery store prices.
Southwest Airways Co. cut its forecast for second-quarter unit earnings, a sign of ongoing challenging conditions at the provider as it fends off a worker push for a controls overhaul.

Highlights of the occasion:

China Commercial Earnings, Thursday
Eurozone financial confidence, consumer confidence, Thursday
US Strong Commodities, Initial Jobless Claims, GDP, Thursday
Nike released profits on Thursday
Japan Tokyo CPI, Unemployment, Commercial Manufacturing, Friday
US PCE inflation, spending and sources of revenue, Michigan College Consumer Sentiment, Friday
Fed’s Thomas Barkin speaks, Friday