The market was trading with mixed activity but an afternoon buying spree helped the market to have a positive closing session. Blue-chip companies led the way, maintaining strength throughout the session, while mega-cap stocks initially weighed down the S&P 500 (+0.5%) and the Nasdaq rallied back from negative territory in the afternoon to close the session 0.2% higher.
The afternoon rally propelled the S&P 500 to a new record high, driven by a turnaround in stocks such as $NVIDIA(NVDA)$ , Amazon.com (AMZN), and Microsoft (MSFT).
NVDA did not disappoint as it has a very good run during the afternoon rally.
S&P 500 Lining Up Its Seventh Day Of Gains In A Row
On Thursday (23 Jan), we are seeing S&P 500 lining up for its seventh day of gains in a row and it is eclipsing a new all-time high.
This is another day of very broad market rally and most of all major and minor sectors are participating in the rally and the bulls are looking very good.
DJIA Performance Outperformed Its Peers
The Dow Jones Industrial Average outperformed its peers, staying higher for most of the session. Gains in the price-weighted index were led by Goldman Sachs (GS), UnitedHealth (UNH), and Caterpillar (CAT).
Other blue-chip stocks like GE Aerospace (GE) and Union Pacific (UNP) saw significant surges following encouraging earnings results and guidance, bolstering the S&P 500 industrial sector (+1.0%).
President Trump Notable Mention Of Interest Rate Cuts
In a notable address at the World Economic Forum in Davos, President Donald Trump emphasized his intent to demand immediate interest rate cuts globally, although he did not directly name the Federal Reserve.
This marks his first direct critique of the Fed since his re-election. The Federal Reserve is widely expected to maintain its current benchmark rate in the upcoming meeting. Trump's comments also included a call for Saudi Arabia and OPEC to lower oil prices, aiming to alleviate inflationary pressures as the U.S. reaches peak oil production.
Look Out For Bitcoin Related Crypto Stocks And ETFs
Bitcoin (BTC-USD) experienced a price uptick following Trump's executive order to establish a crypto working group. This initiative aims to create a friendlier regulatory environment for digital assets, aligning with Trump's campaign promises to support the cryptocurrency sector.
Labor Data Show Growing Challenges For New Layoffs Employment
We have the Weekly Initial Claims came in at 223K with consensus at 219K while the previous was recorded at 217K, the Weekly Continuing Claims also came in higher than the previous after it was revised to 1.853 million from 1.859 million.
These labor data show the elevated level of continuing jobless claims is indicating growing challenges in securing new employment after layoffs.
We will be expecting the Flash January S&P Global U.S. Manufacturing PMI, December Existing Home Sales and Final January University of Michigan Consumer Sentiment on Friday (24 Jan).
All Eleven S&P 500 Sectors Closed In The Green Thanks To Late Afternoon Rally
We saw all eleven S&P 500 sectors closed in the green with range of 0.12% to 1.35%, the information technology only managed a 0.12% gain due to weak performance from mega-caps names.
Healthcare was the biggest winner with 1.35% gain thanks to names like $Moderna, Inc.(MRNA)$ which has a 10.10% gains after Oracle (ORCL) co-founder Larry Ellison discussed the potential of artificial intelligence (AI) in creating cancer vaccines. Moderna also secured additional government funding last week to support its development of a vaccine against the avian influenza virus.
Calm Note Yield Movement Support Afternoon Rally
There are little action in the Treasury market which help to support the afternoon rally. The 10-year yield increased by four basis points to 4.64%, while the 2-year yield decreased by two basis points to 4.28%.
The market also absorbed the latest weekly jobless claims report, which indicated a larger rise in claims than expected, potentially favoring rate cuts by the FOMC.
Stocks To Watch
$GE Aerospace(GE)$ saw its stock surge by 7.1% in premarket trading after reporting quarterly revenue that exceeded Wall Street's expectations and announcing a substantial stock buyback plan. The company reported fourth-quarter net earnings of approximately $1.9 billion, or $1.76 per share, surpassing the previous year's earnings. Adjusted earnings were $1.32 per share, beating the analyst estimate of $1.04. Revenue increased by 14% to $10.81 billion, driven by the commercial engines and services unit, which saw a 19% rise. The company also forecasted strong earnings and cash flow for 2025.
I have written an article prior to its earnings and I continued to see much potential in this stock despite the 7.1% surge.
OpenAI and SoftBank (SFTBY) are committing $19 billion each to the AI-focused Stargate Project, with $Oracle(ORCL)$ and MGX also joining as partners. The total commitment from these initial partners is around $45 billion, giving OpenAI and SoftBank a significant stake in the venture. This project highlights the growing investment in AI, with other tech giants like Nvidia (NVDA) and Microsoft (MSFT) also involved.
I think it might be time to look at Oracle as the discussion of its CEO on the potential of artificial intelligence (AI) in creating cancer vaccines have helped MRNA stock price.
On the technical side, it looks like ORCL is on its way to creating another new highs, as MACD already moving in an upside trend after the bullish crossover, and MTF is giving a strong upward trend.
So this might be a good time to consider ORCL as one of the tech stocks in our portfolio if you have not done so.
Apple (AAPL) is facing challenges with its market position in China, leading to an over 8% drop in shares. Despite this, Wedbush Securities believes the negative sentiment is exaggerated, noting that while iPhone sales in China are softer, growth in other regions should help Apple meet market expectations. The company is also expected to perform well in its Services segment, a crucial area for its future growth.
$Palantir Technologies Inc.(PLTR)$ received a price target upgrade from Wedbush, now set at $90 from $75, with an Outperform rating maintained. The firm's confidence in Palantir's AI strategy underpins its bullish outlook, anticipating the company to emerge as a major player in the AI sector, akin to Oracle or Salesforce.
Palantir have a bullish MACD crossover on 21 Jan (Tues) and since then it has been trending upside, and with strong upward trend from MTF, I think PLTR might make another new highs.
This is because of the focus on AI from project Stargate as well as Thursday executive by President Trump focusing on AI as well.
I am holding onto my Palantir stocks for the long term.
D-Wave Quantum (QBTS) completed a $150 million equity offering, providing necessary capital for its operational plans. Despite the successful raise, shares dipped 2% in premarket trading. The funds are intended to support ongoing technical development and business operations, with the company's cash balance now at approximately $320 million.
Summary
I think we might see a positive reception from traders and investors on the AI and crypto sectors following President Trump newly signed executive order. So there might be some winners and losers, but we need to do our due diligence to research and understand why we need to buy that particular stocks.
Market might continue the rally today (24 Jan) but the strength might not be there as we await for next week important event. The FOMC interest-rate decision on Wednesday (29 Jan) and PCE data on Friday (31 Jan).
Appreciate if you could share your thoughts in the comment section whether you think market would continue from yesterday afternoon rally.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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