Stock market continue to experience significant volatility on the first session of a new week, with trading volume at above-average.
S&P 500 close the session down by 0.23% which saw a fluctuation of more than 400 points between the intraday high and low, but S&P 500 was down by 4.7% almost immediately after the market opened, and it surged to as high as 3.4%.
$Palantir Technologies Inc.(PLTR)$ rebounded slightly, leading gains among enterprise software stocks. Despite a recent decline, the company's rapid revenue and cash flow scaling present a promising investment opportunity. I think we might see recovery coming if focus would be shifted back to american and government spending especially on the defense side, this is because there have been talk about recession, normally the government and defense spending would increase in times like that.
NASDAQ which had been down more than 800 points to its lowest, become the only index to close 0.10% higher at end of trading session. This recovery was aided by rebound seen in mega-cap stocks and chipmakers. The Magnificent Seven companies are feeling the impact of global economic slowdowns and trade tensions, with nearly half of their earnings derived from international markets. Apollo Asset Management noted these firms' vulnerability due to their significant overseas revenue streams.
Small-cap stocks have entered a bear market amid tariff-induced market turmoil. However, Morgan Stanley sees potential opportunities within this sector, particularly for companies with strong return on equity and momentum.
DJIA was down the largest with 0.91% decline, this was driven by fears of further tariffs. The markets however rose up to 4.3% after reports said that NEC Director Kevin Hassett mentioned President Trump was considering a 90-day pause on tariffs, excluding China. But they crashed again after White House dismissed the claims as false.
Subsequently, President Trump announced plans to impose an additional 50% tariff on Chinese imports starting Wednesday if China does not revoke its 34% tariff on U.S. imports. This announcement led to increased selling, but major indices remained above their worst levels of the session.
S&P 500 Sector Saw Communication Services and Technology In The Green Only
We saw recovery from the mega stocks like $Meta Platforms, Inc.(META)$ which gained 2.28% and Netflix (NFLX) up 1.4% helping communication services sector close higher by 1.03%.
$SUPER MICRO COMPUTER INC(SMCI)$ was up 10.66%, $Micron Technology(MU)$ up 5.64% and $Broadcom(AVGO)$ up 5.37% helped the information technology to close higher by 0.32%.
Real Estate and Materials lost 2.40% and 1.66% respectively as these two sectors would be affected by increase in raw materials for building and materials.
Treasury Market Reversal
The reversal in Treasury market helped to prevent the equity indices from session lows. Market rates have been declining due to safe-haven interest recently but we do see a jump in the yields.
The 10-year yield increased by 17 basis points to 4.16%, and the 2-year yield rose by six basis points to 3.73%.
Third Contraction Seen In Consumer Credit
Monday's economic data was limited to consumer credit, which saw a decrease of $0.8 billion in February, contrary to the consensus expectation of a $15.1 billion increase. This follows a downwardly revised increase of $8.9 billion in January, initially reported at $18.1 billion. The key takeaway is that February marked the third contraction in consumer credit over the last four months.
Stocks To Watch
Nvidia (NVDA) has finalized its acquisition of artificial intelligence startup Lepton AI, a move valued at hundreds of millions of dollars. Lepton AI, known for reselling Nvidia's graphics processing units as a cloud service, will see its co-founders remain with Nvidia post-acquisition. This strategic move positions Nvidia strongly against competitors like Together AI, which has also been active in the GPU rental space.
BlackRock CEO Larry Fink highlighted the potential for further market declines due to tariff-related recession fears but emphasized the opportunity to acquire undervalued stocks. Fink's comments came amid a volatile market session that saw major indices initially drop sharply before recovering some losses.
Tilray (TLRY) is set to report its Q3 earnings, with expectations of a slight loss per share but an increase in revenue. The company's diversification into the alcohol sector has helped revenue growth, though challenges remain, including potential NASDAQ delisting and integration issues from recent acquisitions.
Apple (AAPL) is increasing its shipment of iPhones from India to the U.S. as a temporary measure to mitigate the impact of high tariffs on Chinese goods. This move comes amid ongoing trade tensions and Apple's efforts to secure tariff exemptions.
Walgreens Boots Alliance (WBA) will announce its Q2 earnings, with investor attention focused on its $10 billion privatization deal with Sycamore Partners. The deal, expected to close later this year, could see shareholders receiving additional proceeds from asset sales.
US Steel (X) saw a significant stock jump after President Trump ordered a national security review of its planned sale to Nippon Steel. This review could lead to potential approval of the sale, previously blocked under the Biden administration.
Summary
Though we are seeing some recovery in NASDAQ, but the market remain weak as the VIX is still trading above 45 which is considered extreme fear and market is going through huge correction, recession might be potentially possible.
So I am holding my plan to do a larger DCA or get into discounted good quality unless we see the VIX going down to near 30.
Appreciate if you could share your thoughts in the comment section whether you think market would continue to stage another huge selloff and volatility continue stronger.
@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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