Market Review 16th July 2024

Simplify the craziness

DAILY REVIEW

2 min read

Dow Jones Industrial Average: The Dow surged by 742.76 points, or 1.85%, to close at 40,954.48, setting a record high. This was its biggest point gain since November 10, 2022, and the largest one-day percentage gain since June 2, 2023. UnitedHealth Group's strong earnings report contributed significantly to the Dow's performance.
S&P 500: The S&P 500 climbed 0.6% to set an all-time high at 5,667.20. The index benefited from a broad rally where nearly nine out of every ten stocks rose, rather than being driven solely by Big Tech.
Nasdaq Composite: The Nasdaq Composite lagged, closing 0.2% higher at 18,509.34. Tech giants like Nvidia and Alphabet experienced declines, which offset gains from other sectors.
Russell 2000: The small-cap focused index outperformed major indexes, jumping 3.3%. This marks the Russell 2000's fifth straight day of gains, indicating strong performance in small-cap stocks.
Bond Yields: The 10-year Treasury note dipped seven basis points to 4.16%, while the two-year slipped three basis points to 4.42%.

UnitedHealth Group (UNH): UnitedHealth rose 6.5% after reporting better-than-expected profits despite losses from a cyberattack. Growth in both its Optum and UnitedHealth businesses drove the positive results.
Bank of America (BAC): The stock surged nearly 6% following its quarterly report, which showed per-share earnings above analyst expectations at 83 cents. Revenue also surpassed forecasts at $25.54 billion. The bank predicted an increase in net interest income in the fourth quarter.
Nvidia (NVDA): Nvidia fell 1.6% despite a bullish analyst call from Bernstein, which reiterated an "outperform" rating and a price target of 130, citing an enormous opportunity in data centers.
Charles Schwab (SCHW): Schwab's stock plunged over 9% after reporting second-quarter earnings that, despite beating analyst views, showed a disappointing net interest margin. The stock gapped below the 50-day moving average, indicating a sell signal.
Morgan Stanley (MS): The stock reversed higher, gaining 1.6%, after beating Wall Street views for second-quarter results. Earnings of $1.82 per share exceeded expectations of $1.65.
Match Group (MTCH): The stock jumped 7.5% after activist hedge fund Starboard Value acquired a 6.5% stake, reflecting confidence in the company's strategic direction.
Broadcom (AVGO) and Micron Technology (MU): Both stocks were laggards on the Nasdaq, with Broadcom dipping 1.2% and Micron falling 2.6%, highlighting the tech sector's mixed performance.

Sector Performance: S&P 500 sectors were mostly positive, with industrials and materials leading. Communication services and technology sectors struggled the most.
Interest Rate Cuts: Traders are increasingly betting on the Federal Reserve lowering interest rates in September, which is seen as boosting small caps and industrials more reliant on borrowing costs.
Retail Sales Data: June retail sales were unchanged, versus expectations for a decline. Excluding autos, sales rose 0.4%, exceeding the 0.1% consensus forecast. This data suggests a soft landing for the economy, bolstering investor confidence.
Global Markets: The TSX and major U.S. equity indexes closed higher. In global markets, Asia was mixed, while Europe was lower. The U.S. dollar advanced against major currencies. In commodities, WTI oil fell on demand concerns from China, while gold traded higher.