NASDAQ surpasses 20,000 milestone 12/12/2024

HOT stories for today

US market wrap:

• U.S. stocks ended mostly higher on Wednesday, with the Nasdaq Composite reaching a record high. At the same time, the Dow Jones Industrial Average struggled to regain momentum following the release of November's CPI inflation data, which met expectations. It was another milestone day for the stock market as relentless strength in mega-cap tech powered the Nasdaq Composite to a new all-time high. Alphabet and Tesla hit fresh peaks, joining Amazon and Meta in driving the Nasdaq past the 20,000-point mark for the first time. These four tech titans added approximately $416 billion in market capitalization during the session.
• Meanwhile, after a rough stretch for crypto, the sector showed renewed strength as Bitcoin reclaimed the $100K level. President-elect Donald Trump is set to ring the NYSE opening bell tomorrow morning, promising an eventful day ahead. The S&P 500 heatmap: five out of 11 sectors ended in the green, led by consumer discretionary (+1.76%), while healthcare (-1.36%) was the day’s laggard.

Quantum stocks soar on investors' buzz

• Quantum computing stocks have soared recently, fueled by growing investor interest in the technology’s potential. Companies like Rigetti Computing, D-Wave Quantum, and IonQ have seen remarkable gains of 843%, 455%, and 398%, respectively, over the last three months. The momentum was further boosted by Google Quantum AI’s announcement of a breakthrough with its "Willow" chip, which performed a calculation in under five minutes that would take current supercomputers billions of years.
• Despite the excitement, quantum computing remains a speculative investment, with commercially viable applications likely years away. Smaller firms also face competition from tech giants like Alphabet and IBM, though potential acquisitions continue to attract investor attention. While the sector holds promise, investors are advised to remain cautious given the technology's early stage and the challenges ahead.

Stocks on the move:

• Adobe (ADBE): Shares of the software giant dropped 8% after issuing revenue forecasts for the fiscal first quarter, which came in below expectations. However, the company surpassed analysts’ estimates for adjusted earnings per share and revenue in the previous quarter.
• Chewy (CHWY): The pet products retailer fell nearly 3% in after-hours trading after announcing a $500 million underwritten public offering by Buddy Chester Sub LLC. Chewy will not receive any proceeds from the share sale.
• Oxford Industries (OXM): The apparel and footwear retailer, which owns the Tommy Bahama brand, saw its stock decline by almost 5% following third-quarter results that missed expectations on both earnings and revenue. The company reported an adjusted loss of $0.11 per share on $308 million in sales.
• Nordson (NDSN):The industrial machinery manufacturer tumbled more than 5% after providing weak fiscal first-quarter guidance, attributing the outlook to a seasonal slowdown and cautious customer spending.

Today’s action

• Asia-Pacific markets mostly rose on Wednesday, buoyed by Wall Street gains as the Nasdaq Composite hit record highs following an inflation report that aligned with expectations. In regional news, Australian jobs data revealed the unemployment rate dropped to an eight-month low of 3.9% in November, down from 4.1% in October. This defied a Reuters poll of economists, which had forecast a rise to 4.2%.
• In the U.S., stock futures edged lower Thursday morning, a day after the Nasdaq Composite crossed the 20,000-point milestone for the first time. Futures for the Nasdaq 100 slipped 0.16%, S&P 500 futures declined 0.14%, and Dow Jones Industrial Average futures fell 96 points, or 0.22%. Traders are awaiting more inflation data with November's producer price index (PPI) report due Thursday, projected to show a 0.2% monthly increase, along with weekly jobless claims data. On the earnings front, major companies like Broadcom, RH, and Costco are scheduled to release results after Thursday’s market close.

Wahtclist: ADBE, GOOGL, TSLA, CIEN, CHWY, OXM, COIN

Bitcoin

• Bitcoin rebounded midweek, reclaiming the $101,000 level during Wednesday’s U.S. morning trading hours after earlier declines. Ripple’s XRP extended its rally from the previous day, driven by regulatory approval for the RLUSD stablecoin. AI-focused tokens were among the top gainers, potentially boosted by reports of Apple collaborating with Broadcom to develop an AI chip. The broader cryptocurrency market showed signs of recovery on Wednesday, bouncing back from a wave of selling earlier in the week that seemingly cleared out significant leveraged positions.
• The upward momentum coincided with a strong rally in U.S. equities, sparked by a Consumer Price Index report aligning with economist predictions. This reinforced expectations that the Federal Reserve will cut its benchmark rate by 25 basis points at its meeting next week. The Nasdaq gained 1.5%, while the S&P 500 rose nearly 1%. Notable performers included NEAR Protocol (NEAR), Internet Computer (ICP), and Render (RENDER), each surging by over 15% in the past 24 hours.
  Watchlist: Bitcoin: 90 000-104 000, Ethereum: 3500-4100, Solana: 200-250

Forex

• The Japanese Yen (JPY) comes under fresh selling pressure after a brief rise in the Asian session, driving the USD/JPY pair toward the mid-152.00s, close to its two-week high from the prior day. Market expectations that the Bank of Japan (BoJ) will keep interest rates unchanged next week, along with rising US Treasury yields and upbeat sentiment in equities, weigh heavily on the Yen. Additionally, a firmer US Dollar, bolstered by bets on a less dovish Federal Reserve, adds to the upward momentum for the pair.
• In contrast, the EUR/USD pair edges slightly higher on Thursday, recovering from a four-day losing streak to trade just above the 1.0500 level, up around 0.10% for the day. A muted US Dollar provides some support for the Euro, but gains remain constrained amid growing expectations of a potential rate cut by the European Central Bank (ECB) in 2025. Traders are holding back on decisive moves ahead of the ECB's much-awaited policy announcement, which is expected to shape market sentiment in the near term.
  Watchlist: EUR/USD: 1.0300-1.0650, USD/JPY: 149-157

Basic Materials

• West Texas Intermediate (WTI), the benchmark for US crude oil, climbed to $69.95 in early European trading on Thursday, supported by prospects of tighter US sanctions on Russian oil and additional economic stimulus from China. These factors helped offset concerns about sluggish global demand growth. Reports suggest the Biden administration may impose stricter sanctions on Russia’s oil trade to increase pressure on Moscow, while the European Union has also agreed to a new round of sanctions amid the ongoing conflict in Ukraine. These measures could constrain global crude supplies and push prices higher. However, OPEC’s decision to reduce its demand growth forecast for 2024-2025 for a fifth consecutive month underscores ongoing challenges in the oil market.
• Gold (XAU/USD) rebounded from an Asian session dip below $2,700 but remains below its one-month high reached earlier on Thursday. Rising US bond yields and expectations of a less dovish Federal Reserve—bolstered by Wednesday’s inflation data—have weighed on the non-yielding asset. Even so, geopolitical uncertainties, trade disputes, and the likelihood of another Fed rate cut in December continue to provide some support for gold prices.
  Watchlist: GOLD 2530-2790, US Oil: 65.00-73.00

The TEFS Analyst team wishes you a successful day!