Golden Cross confirmed: Can the Market keep climbing? 02/07/2025

HOT stories for today


 

US market wrap:

• U.S. markets ended Tuesday on a mixed note: the Dow Jones eked out a small gain, while the S&P 500 and Nasdaq Composite both slipped, S&P down 0.2%, Nasdaq off 0.8% in late-afternoon trade . Volume spiked as traders squared positions ahead of triple‑witching, triggering elevated volatility.
• Tech stocks, particularly big-cap names, weighed on indexes, though industrials buoyed the Dow . Key tech movers included semiconductor and software firms, which were under pressure amid renewed concerns about export growth to China. Meanwhile, energy and materials sectors garnered safe-haven flows amid mixed commodity signals. Bond yields edged marginally, and the dollar remained stable as markets digested Fed and geopolitical headlines.

Golden Cross Confirmed: Can the Market Keep Climbing?

• The S&P 500 has just completed its first golden cross in over two years, as the 50-day moving average moved above the 200-day, an event that often signals further upside ahead. Historically, such patterns have preceded average 12-month gains of 10% to 13%, with the rally typically extending beyond the crossover. This technical milestone follows a rare Zweig Breadth Thrust in April, reinforcing bullish momentum and broad market participation.
• Analysts, including Piper Sandler’s Craig Johnson, say the setup supports a year-end S&P target near 6,600. While some warn of short-term pullbacks, particularly in the tech sector, many view the crossover as a bullish mid-year confirmation of broader market strength. The golden cross also appears across key indices, such as the Nasdaq Composite and Nvidia, signaling that the rally may be far from over.

Stocks on the move:

• GE Vernova (GEV): The energy equipment maker fell 4% after reports said it’s weighing a sale of Proficy, its industrial software arm, and is in talks with public firms and private equity groups.
• Tesla (TSLA): Shares dropped 5% after President Trump suggested reviewing subsidies tied to Elon Musk’s companies, following Musk’s criticism of the president’s tax bill.
• AeroVironment (AVAV): Shares plunged 11% after the defense and aerospace contractor unveiled plans to raise $750 million through a public stock offering and an additional $600 million via convertible senior notes maturing in 2030.
• Hasbro (HAS): The toy manufacturer climbed 4.3% after Goldman Sachs upgraded the stock to "Buy" from "Neutral," citing optimism over new Magic: The Gathering product releases that could drive stronger revenue performance.

Watchlist: TSLA, META, AMZN, NVDA, AMD, PLTR, RBLX, GEV

Today’s action

• Singapore stocks hit a record high Wednesday, rising 0.4% to 4,005.39, as investors reacted to Fed Chair Jerome Powell’s remarks. Powell said rate cuts would’ve begun if not for President Trump’s tariff policies. Asian markets were mixed: Japan’s Nikkei 225 fell 1.32%, South Korea’s Kospi slipped 0.42%, while Australia’s ASX 200 gained 0.49%. Hong Kong’s Hang Seng rose 0.73%.
• U.S. futures were little changed Tuesday night, with tech appetite easing. Dow futures added 9 points, Nasdaq 100 futures edged up 0.1%. Investors now await ADP jobs data on Wednesday and June’s payrolls report on Thursday. Trade talks also remain in focus as Trump’s 90-day tariff pause nears expiration.

Bitcoin

• Bitcoin (BTC) held steady near $106,600 in early Wednesday trading, consolidating recent gains amid low volatility. Traders are closely watching the $109,000 resistance and $104,000 support levels. Institutional inflows into Bitcoin ETFs continue to provide price stability, with over $4.5 billion added in the past month.
•  Ethereum (ETH) hovered around $2,460, while Solana (SOL) and Avalanche (AVAX) saw modest pullbacks. Despite muted price action, sentiment remains cautiously bullish as the market enters a seasonally strong month.
  Watchlist: Bitcoin: 99,000–112,000, Ethereum: 1,500–2,800, Solana: 80–183

Forex

• The Japanese Yen (JPY) weakened modestly on Wednesday as risk appetite picked up and President Trump threatened higher tariffs on Japanese imports, citing resistance to U.S. rice purchases. The move dampened safe-haven demand, pushing USD/JPY higher from near one-month lows. Still, diverging BoJ-Fed rate expectations may limit upside in the pair.
• Meanwhile, EUR/USD eased to around 1.1800 after briefly touching 1.1830, its strongest level since September 2021. The pullback followed a modest rise in the U.S. ISM Manufacturing PMI to 49.0, topping expectations. Attention turns to EU-U.S. trade talks, as EU Commissioner Maros Sefcovic prepares to meet U.S. officials to advance tariff negotiations.
  Watchlist: EUR/USD: 1.0700–1.1650, USD/JPY: 140–151

Basic Materials

• Gold (XAU/USD) held steady below a one-week high on Wednesday, consolidating recent gains amid mixed market signals. A mild USD rebound and improved risk sentiment capped upside for the precious metal. However, Fed rate cut expectations and ongoing trade tensions continue to offer underlying support.
• WTI crude oil slipped to around $64.85 in early Asian trade, pressured by a surprise U.S. inventory build that ended a five-week drawdown streak. Traders are monitoring Iran-related supply risks and upcoming OPEC+ policy decisions as the market braces for potential output adjustments in August.
  Watchlist: GOLD: 2,600–3,500, US Oil: 55.60–75.80

Key Economic Events Today (EST):

08:15 am: USD ADP Non-Farm Employment Change
10:30 am: USD Crude Oil Inventories
 

Earnings

BMO (Before Market Open):
UNF         Unifirst Corp.
AMC (After Market Close): FC, ZENV

The TEFS Analyst team wishes you a successful day!