- Moving the markets
Nvidia, the king of chips, smashed earnings expectations and sent its stock soaring to new heights. The tech giant reported a staggering 265% increase in revenue from a year ago, thanks to its thriving artificial intelligence business. It also predicted another strong quarter ahead, despite already high expectations.
The news lifted the whole tech sector, as well as the broader market. Meta, Amazon, Microsoft, and Netflix all rose more than 1%. The MAG7 group of tech titans added $500 billion to their combined value.
Nvidia and its Big Tech peers have been on a tear for the past year, fueled by AI hype and innovation. The stock market followed Nvidia’s lead, with the Nasdaq surging 3% and the S&P 500 hitting a record high. Small Caps trailed behind with a modest gain. Most shorted stocks were flat, despite the bullish mood.
The market is enjoying strong earnings and economic growth, but it could face headwinds from rising bond yields. Higher yields reflect higher expectations for growth, but they also make stocks less attractive.
Treasury yields rose across the board, while the dollar and gold were little changed. Oil prices rebounded after a weak start.
The market seems to be ignoring the economic reality, as ZeroHedge noted, with the Nasdaq diverging from bond yields.
How long can this party last?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
Nvidia, a leading technology company, reported excellent earnings and future projections. This boosted the stock market, especially the Nasdaq index, which tracks many tech companies.
Our TTIs, which measure market direction, also reached new highs.
This is how we closed 2/22/2024:
Domestic TTI: +9.03% above its M/A (prior close +7.96%)—Buy signal effective 11/21/2023.
International TTI: +8.95% above its M/A (prior close +7.75%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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