Nvidia turns things around, Nasdaq surges

live4 updates

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  Tuesday, June 25, 2024 at 9:34 a.m. EDT

  Opening Bell: Nasdaq up, Dow down

  U.S. stocks started mixed on Tuesday as AI chipmaker Nvidia (NVDA) rose more than 0.2% in early trading as it sought a cautious recovery from a three-day sell-off.

  The tech-heavy Nasdaq Composite Index (^IXIC) rose about 0.5%, while the benchmark S&P 500 (^GSPC) added 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index to fall, losing about 0.2% after surging more than 200 points earlier in the week.

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  Tuesday, June 25, 2024 at 9:23 a.m. EDT

  Home prices hit new record in April

  Home prices hit a record high in April as the market remained tight, but year-over-year growth slowed from the previous month.

  Home prices in the 20 largest U.S. metropolitan areas rose 7.2% in the 12 months through April, down from the 7.5% annual rate in the previous month, according to S&P CoreLogic Case-Shiller. Month-on-month, home prices in the 20 largest metropolitan areas rose 0.4% in April from the previous month.

  A shortage of housing inventory, high mortgage rates and record home prices have put the housing market out of reach for many would-be buyers, and economists at Bank of America don’t think the housing hurdles are going away anytime soon.

  “The U.S. housing market is in a tailspin that we don’t see clearing anytime soon,” Bank of America economist Michael Gapen wrote in a note to clients on Monday.

  “After a surge in home transactions during the pandemic, they have retreated and stabilised. We expect this trend, which has reduced homebuying capacity, created a homeowner lock-in effect and limited home transactions, to continue throughout our forecast period,” the economists added.

  For now, the investment bank believes the pandemic housing shock still needs to run through the market: Bank of America expects home prices to rise about 4.5% this year and 5.0% next year before falling to 0.5% in 2026.

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  Tuesday, June 25, 2024 at 6:40 a.m. EDT

  Key market risks in 2025

  As if we needed one more thing to worry about: money.

  U.S. Treasury Secretary Janet Yellen reminded investors late Monday in an exclusive interview with Yahoo Finance’s Jennifer Schonberger that President Trump’s tax cuts are set to expire in 2025.

  None of the investors I last spoke to expressed any concerns about the expiration and its impact on the market.

  But Yellen did her best to bring the issue back into the spotlight.

  “The signature policy of the Trump era was the Tax Cuts and Jobs Act, which promised an investment boom that never materialized. It gave huge tax cuts to corporations and the wealthy. The result was a massive increase in the deficit and lower tax revenues than historically. And I think that’s the cause of a lot of the problems on our fiscal trajectory that we’re facing right now. So leaving it all in place is a concern to me.”

  Of course, it’s completely unclear at this point how the markets will react in 2025 if the tax cuts are not extended due to deficit concerns. But this should not be ignored in your investment planning process. Just think about this: Not extending the tax cuts would mean the top tax rate would go back down from 37% to 39.6%.

  It’s real money for real people.

  You can watch Jen’s full interview with Treasury Secretary Janet Yellen below.

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  Tuesday, June 25, 2024 at 6:22 a.m. EDT

  Helpful Reminders about Nvidia

  While it seems like everyone is an Nvidia (NVDA) expert by now and waxing poetic about the stock’s recent plunge, I’m not going to go in that direction this morning.

  Instead, with the help of technical analyst Jonathan Krinsky at BTIG, we wanted to provide some factual numbers that provide some good context as to why Nvidia stock has been a bit sluggish.

  As if to remind the public, stock prices don’t go up every day, Krinsky said:

  “NVDA has recently been trading about 100% above its 200-day moving average. Since 1990, the largest spread a U.S. company has traded above its 200-day moving average when it was the largest was 80% when Cisco (CSCO) hit its all-time high in March of 2000. In other words, NVDA is in a league of its own. It’s also worth noting that at its peak last week, NVDA briefly surpassed Microsoft (MSFT) as the largest U.S. company. On March 24, 2000, CSCO briefly surpassed MSFT as the largest market cap company, which marked the peak of both CSCO and the Nasdaq. We are fully aware that the fundamentals are very different this time around, but over the past five years, NVDA is up +4,280% while CSCO was up +4,460% in the five years leading up to its peak. Over the past 18 months, NVDA is up +827%. , which is actually double CSCO’s gains in the 18 months leading up to 2000.”