Title: Stock Market Rally Climbs to New Highs Despite Mixed Earnings and Economic News
The stock market rally showed no signs of slowing down last week, as both the Dow Jones and S&P 500 reached new all-time highs. In addition, the Nasdaq rebounded to a two-year high, boosted by impressive earnings reports from tech giants Meta Platforms and Amazon.com.
The strong performance of Big Tech companies contributed to the overall positive sentiment in the market. Their earnings results added support to the sector and fueled investor optimism. However, market breadth weakened during the week, with small-cap stocks struggling to keep up.
Tesla, although breaking a weekly losing streak, remains the top loser in the S&P 500 for the year 2024. Despite this setback, several stocks, including Adobe, Axon Enterprise, MongoDB, Samsara, and Synopsys, showed encouraging buy signals that captured investors’ attention.
Looking ahead, investors eagerly await the upcoming earnings reports for the coming week. Some notable companies scheduled to release their earnings include Caterpillar, Chipotle Mexican Grill, Eli Lilly, ELF Beauty, Arm Holdings, and Pinterest. Their performance will likely have a significant impact on the market’s direction.
As the new week began, Dow Jones, S&P 500, and Nasdaq futures were set to open on Sunday evening, setting the stage for another potentially eventful week in the stock market. While the rally faced challenges during the middle of the week, it managed to recover strongly, thanks in part to the positive earnings and capital spending plans disclosed by mega-cap tech companies.
While the market’s performance has been impressive, caution is advised due to extended valuations. Furthermore, market breadth continued to weaken, with losers outperforming winners. The small-cap Russell 2000 declined for the week, although it managed to hold support at the 50-day line.
Growth Exchange-Traded Funds (ETFs) had a notable week, with the iShares Expanded Tech-Software Sector ETF and VanEck Vectors Semiconductor ETF reaching record highs. In addition, several stocks, including MongoDB, Axon Enterprise, Adobe, Synopsys, and Samsara, entered buy zones, presenting potentially attractive investment opportunities to investors.
Despite its recent struggles, Tesla managed to rebound from a six-week losing streak. However, it remains the worst performer in the S&P 500 for the year 2024, adding caution to its outlook.
As the stock market rally continues to power higher, investors should approach with caution due to extended valuations. Monitoring earnings reports and market breadth closely will help investors make informed decisions amidst the ongoing market fluctuations.
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