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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,460.48 ( ⬇️ 0.41%)
Nasdaq Composite @ 17,732.60 ( ⬇️ 0.71%)
Bitcoin @ $63,191.90 ( ⬆️ 0.84%)
Hey Scoopers,
Happy Monday! Are you all set for a shortened week?
👉 S&P 500 continues to surge in Q2
👉 Semiconductor stocks are on fire
👉 Bitcoin gains 43%
So, let’s go 🚀
Market Wrap 📉
The U.S. equity markets ticked lower on Friday as Wall Street digested fresh economic data that indicated slowing inflation and better-than-expected consumer sentiment figures.
Inflation in May slowed to its lowest annual rate in more than three years. The core personal consumption expenditures price index rose 2.6% year over year, in line with estimates.
The core PCE index excludes volatile food and energy prices and is the Fed’s preferred inflation gauge.
Inflation numbers have been considered paramount by market participants, who are still guessing when the Fed will begin cutting interest rates.
Traders are pricing a 64.1% chance that interest rates will be cut in September.
Trending Stocks 🔥
Nike- Shares of the athletic retailer fell 20% after significantly cutting its full-year guidance for fiscal 2025 (ending in May).
Trump Media & Tech - Shares of Trump Media & Technology declined 11%, reversing an earlier gain on the heels of the first presidential debate.
Kura Sushi USA - Shares of the sushi company plunged 23% after posting disappointing preliminary revenue figures for fiscal Q3.
How did the S&P 500 and Nasdaq Perform in 2024?
The tech-heavy Nasdaq led the way in the first half of 2024, climbing 18% as the AI craze captured investor excitement. Comparatively, the S&P 500 index jumped 14.5% while the blue-chip Dow lags with a 3.8% gain this year.
The AI theme has taken over 2024, propelling the concentration in the stock market.
Here’s how the three indices have performed:
Dow Jones Industrial Average
Up 1.1% in June for its seventh positive month in eight
Down 1.7% for its first negative quarter in three
Up 3.8% in 2024
S&P 500
Rose 3.5% in June for its seventh positive month in eight
Up 3.9% for its sixth positive quarter in seven
Increased 14.5% in 2024
Nasdaq Composite
Jumped 6% in June for its seventh positive month in eight
Soared 8.3% for its third consecutive positive quarter
Gained 18.1% in 2024
Alternatively, small-cap stocks have underperformed the S&P 500 index by a wide margin. The small-cap-focused Russell 2000 has slipped 0.8% in June, 3% in Q2, and 1.5% in 2024.
Nvidia Soars In 2024
Chip stocks are on an absolute tear in 2024, contributing to a massive chunk of the Nasdaq 100’s 18% gains this year.
Market bellwether Nvidia has soared 156%, while Arm Holdings has gained 119%. Other notable winners include Micron, Applied Materials, and Broadcom, all up at least 40% in 2024.
Constellation Energy is the third-best stock in the index with a 73% gain, while CrowdStrike gained 51% and Meta Platforms rose 45%.
Healthcare giant Eli Lilly has returned 53%, primarily due to the excitement surrounding its anti-obesity medication. Eli Lilly will remain on investor radar in the second half of 2024 as the U.S. FDA will likely approve its Alzheimer’s treatment.
Walgreens Boots Alliance and Lululemon Athletica are the top losers in 2024, down 50% and 41%, respectively.
Boeing was the major underperformer for the S&P 500 and Dow Jones indices, falling 30% in the first half of 2024. The aerospace giant was under the pump after a door panel blew out midair on its 737 Max 9, operated by Alaska Airlines.
Is a Bitcoin Boom Next?
Bitcoin, the world’s largest cryptocurrency, has surged over 42% year-to-date, valuing it at a market cap of $1.3 trillion. However, Bitcoin’s lackluster performance in June saw prices decline by 7% last month.
Source: CoinGlass
Data from Coinglass suggests BTC prices might rebound in July. On average, Bitcoin has gained 7.4% in July since 2013. The digital asset has posted minimum monthly gains of 8% in seven of the last 11 July months.
Further, the stock-to-flow model suggests BTC prices will surge to $95,000 by August 2024 and trade close to $200k by the end of 2024.
Headlines You Can't Miss!
Google acquires stake in Taiwan-based solar energy company
Boeing to acquire Spirit Aerosystems for $4.7 billion
Inside Out 2 tops $1 billion at global box office
Taiwan leads Asia’s equity gains in 2024
Gemini signs a five-year BTC deal with a football club
Chart of The Day
The S&P 500 index is up over 42% since the start of 2023, indicating annualized returns of 26%, almost 3x the average annual returns.
The S&P 500 Tech Index, which includes Nvidia, Microsoft, Apple, and Broadcom, is up 100% in this period. If we exclude the tech sector, the ETF is up 26%.
The concentration in U.S. tech stocks is a feature of the AI theme, as tech earnings grew 23% yearly in Q1 of 2024. Comparatively, S&P 500 earnings were up just 5.9% in Q1.
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.