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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,447.87 ( ⬇️ 0.31%)
Nasdaq Composite @ 17,496.82 ( ⬇️ 1.09%)
Bitcoin @ $60,800.41 ( ⬇️ 3.11%)
Hey Scoopers,
Happy Tuesday! Here’s what we’re covering today:
👉 Nvidia stock pulls back
👉 Gold prices might soar to $3k
👉 Bitcoin sell-off intensifies
So, let’s go 🚀
Market Wrap 📉
While the S&P 500 and Nasdaq indices moved lower yesterday, the Dow Jones Industrial Average climbed as investors sold big tech names in favor of sectors such as banks and energy.
The information technology sector led the decline, falling by 2.1%. Meanwhile, the energy sector advanced 2.7%, followed by financials and utilities at 1% each.
Shares of Nvidia fell by 6.7%, adding to its 4% decline last week, which snapped an eight-week winning streak.
The enthusiasm surrounding the AI (artificial intelligence) megatrend lifted market sentiment in 2024 as investors continue to grapple with shifting expectations for rate cuts and a slowing economy. For instance, the S&P 500 index has advanced 14.8% year-to-date, having notched 31 record closes.
Here’s what will drive the indices in the next four days:
Earnings from FedEx and Carnival today
Consumer confidence for June and home price data
Personal Consumption Expenditures Price Index for May
Trending Stocks 🔥
SolarEdge Technologies- Shares of the clean energy company are down 13.5% in pre-market after it announced plans for a $300 million private offering of convertible notes.
Pool Corp - Shares of the swimming pool wholesale distributor are down over 10% after the company adjusted its guidance downward.
RXO - The stock spiked almost 23% after the freight company agreed to acquire Coyote Logistics from UPS for over $1 billion.
Will Nvidia Stock Move Lower?
After posting its worst day since April, Nvidia shares are down around 13% from all-time highs. Despite the ongoing pullback, Nvidia shares have more than doubled in 2024 and are up close to 180% in the last 12 months.
According to BTIG’s technical strategist Jonathan Krinsky, Nvidia traded at 100% above its 200-day moving average last week, the biggest gap for any market-leading company since 1990.
The stock that came closest to hitting the metric was Cisco Systems during the peak of the dot-com bubble.
In addition to Nvidia, other stocks part of the AI-powered rally, such as Super Micro Computer, Qualcomm, and Broadcom, reported significant declines.
Nvidia currently accounts for more than 80% of the data center chip market and is a key supplier to companies such as Microsoft, Alphabet, and Meta, all of whom are investing heavily in AI.
Despite its massive size, Nvidia is on track to double its sales to $113 billion in fiscal 2025 (ending in January).
Bank of America is Bullish on Gold
Bank of America expects gold prices to surge to $3,000 per ounce within the next 12-18 months while emphasizing that current market flows don’t support these price estimates.
Source: Weekend Investing
The investment bank explained that reaching $3,000 is tied to factors such as demand from non-commercial avenues. Moreover, a rate cut from the Federal Reserve could see yellow metal products such as ETFs attracting investments and higher trading volumes.
In the last two years, central banks from India and China have aggressively increased their exposure to gold, pushing prices higher in the process.
Historically, gold has been viewed as a store of value, a hedge against inflation, and an effective portfolio diversifier.
Bitcoin ETFs Outflows Drag Prices Lower
According to a report from The Block, spot Bitcoin ETFs recorded a daily net outflow of $175 million on Monday, marking their seventh consecutive day of outflows.
Grayscale’s GBTC led the outflows with $90 million, followed by Fidelity’s FBTC at $35 million. Moreover, Franklin Templeton reported outflows of $20.8 million.
Moreover, Bitcoin miners are dumping BTC. Since June, they have offloaded $2 million worth of BTC, and total miner reserves have fallen by 50,000 BTC since the start of 2024.
Finally, the German government sold $195 million of BTC last week. However, they still own BTC worth $2.87 billion.
Headlines You Can't Miss!
Airbus sinks 9% as it cuts forecasts for 2024
China approves Novo Nordisk’s weight loss drug
China’s CSI 300 index sinks to four-month low
Disney’s Inside Out 2 could be the first billion-dollar movie of 2024
Mt. Gox to begin Bitcoin repayments in July
Chart of The Day
The S&P 500 and Nasdaq indices are trading just below all-time highs. However, only a handful of mega-cap stocks are driving this market rally.
For instance, the top 10 stocks in the S&P 500 account for 32.6% of the index but 74% of total gains in 2024.
While Nvidia has surged over 100% this year, other big tech companies such as Microsoft, Meta, Broadcom, Alphabet, and Amazon are up 19.5%, 41%, 44%, 28%, and 22%, respectively.
The other 490 companies contributed to the rest of the gains for the S&P 500 index.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.