The S&P 500 (SP500) ended a three-week streak of gains on Friday, but the bigger story is that the benchmark index closed the first half of 2024 with an astounding 14.5% gain. The S&P (SP500)’s stellar performance in the first half of the year, when it rose to record-breaking speed, was mainly due to a surge in technology stocks driven by the artificial intelligence boom and progress toward a scenario where the Federal Reserve can finally start cutting interest rates. But the index’s modest decline this week suggests that recent concerns about the breadth of the market and the dominance of big tech stocks are weighing on investors. The S&P (SP500) fell this week. -0.1%Meanwhile, the Dow Jones Industrial Average (DJIA) also fell. -0.1%Nasdaq (COMP:IND) +0.2%Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.
Big banks are well-positioned to weather a severe downturn, with all 31 banks subject to Federal Reserve stress tests this year exceeding minimum capital requirements under the hypothetical circumstances. “This year’s stress tests were no less severe than last year’s, but losses increased as a result of the tests because banks’ balance sheets are somewhat riskier and have higher expenses,” said Michael Barr, the Federal Reserve’s vice chairman for supervision. In the hypothetical scenario, banks would have suffered losses of almost $685 billion. The scenario assumes a 40% drop in commercial real estate prices, a 36% drop in home prices and a 10% unemployment rate. (33 Comments)
Don’t write off mega-cap tech just yet, with staying power born from enthusiasm for AI and the associated corporate profits. After a steep selloff that sent shares into correction territory, Nvidia (NVDA) 7% increase Its stock price rose to $126 per share on Tuesday, pushing Jensen Huang’s company’s market capitalization past $3 trillion again. At last week’s Seeking Alpha Investment Summit, Wedbush Securities analyst Dan Ives said he expects the tech bull market to continue for another two to three years, and that these three companies will be in a fierce race to hit $4 trillion in market capitalization. (59 comments)
Rivian Automotive (RIVN) shocked the electric vehicle industry by announcing a joint venture with Volkswagen (OTCPK:VWAGY). Volkswagen’s initial and planned $5 billion investment will create next-generation electric architecture and best-in-class software technology, while also giving the EV maker a path to “positive free cash flow and meaningful scale” through R2 production in Illinois and expanded production of its midsize platform in Georgia. Rivian Stock 49.9% increase Postmarket on Tuesday, 8.6% increase “This will be a big help to Rivian, but it doesn’t change the fact that the company faces real challenges going forward,” SA Investment Group Leader Daniel Jones said at a regular session. (136 comments)
Chipotle Mexican Grill (CMG) rose slightly in first trading Wednesday after a 50-for-1 stock split, one of the largest in Wall Street history. Shareholders received 49 additional shares for each share they held in the split, and general managers and longtime staff members were offered one-time stock grants. “We believe a stock split will make our shares more accessible to a broader range of investors, not just our employees,” Chipotle CFO Jack Hartung said when the move was first announced. Interestingly, the restaurant chain has never split its stock since going public in 2006. (4 comments)
Nike (NKE) stock Falling 12.4% Nike’s shares fell to $82.52 per share on Thursday after the sportswear giant lowered its earnings outlook, citing growing macroeconomic uncertainty, worsening currency effects and softness in China. Nike’s adjusted profit beat expectations, but sales fell 2% while Wall Street had expected a 1% increase. “Revivals of this magnitude take time,” Chief Financial Officer Matthew Friend said in the earnings call. Executives also acknowledged Nike’s lack of innovation, especially in the latest fiscal year, as competitors gained traction in the fitness and running categories, but management is aiming to double the growth of its product pipeline by the end of 2025. (39 comments)
