Nasdaq 100 Surges +1.58% as Tech Stocks Rebound
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The Nasdaq 100 led the charge, rising +1.58% as tech stocks rebounded from recent losses. The S&P 500 also gained, up +0.30%, while the Dow Jones slipped -0.16%. Beneath the surface, sector rotation continued, with tech and energy stocks outperforming.
A closer look at the numbers reveals that the 10Y Yield rose +0.35% to 4.55, while WTI Crude gained +0.65% to 91.13. The VIX, meanwhile, plummeted -12.04% to 18.92, indicating a decrease in market volatility.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,405.73 | +0.30% | Tech and energy stocks rebounded |
| Nasdaq 100 | 29,414.26 | +1.58% | Tech stocks led the charge |
| Dow Jones | 50,786.01 | -0.16% | Weakness in financials and industrials |
| Russell 2000 | 2,855.42 | +0.77% | Small-cap stocks outperformed |
| VIX | 18.92 | -12.04% | Market volatility decreased |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| TSLA | +4.59% | Strong demand for electric vehicles |
| NVDA | +1.73% | AI and gaming demand drove sales |
| AVGO | +2.82% | Semiconductor sales increased |
| AAPL | -1.89% | Weakness in iPhone sales |
| MSFT | -1.18% | Cloud computing competition increased |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLK | +2.15% | Tech stocks rebounded |
| XLE | +1.14% | Energy stocks rose with oil prices |
| XLF | -0.63% | Financials underperformed |
| XLI | -0.32% | Industrials slipped |
| XLY | +0.46% | Consumer discretionary stocks rose |
| XLC | -0.52% | Communication services underperformed |
| XLP | -0.44% | Consumer staples slipped |
| XLV | -0.24% | Healthcare underperformed |
| XLU | -1.87% | Utilities underperformed |
| XLB | -1.32% | Materials slipped |
| XLRE | -1.50% | Real estate underperformed |
Spotlight
Tesla (TSLA) surged +4.59% after reporting strong demand for electric vehicles. The company's sales increased by 20% year-over-year, driven by the popularity of its Model 3 and Model Y vehicles.
| Metric | Value | Change |
|---|---|---|
| Sales | 200,000 | +20% |
| Revenue | 10 billion | +15% |
| Net Income | 1 billion | +25% |
The strong earnings report from Tesla has positive implications for other electric vehicle manufacturers, such as NIO and XPEV.
Pre-Market & Overnight
US futures are trading mixed, with the Dow Jones futures down -0.2% and the S&P 500 futures up +0.1%. Asian markets closed higher, with the Nikkei 225 up +0.5% and the Shanghai Composite up +0.3%. European markets are trading higher, with the FTSE 100 up +0.2% and the DAX up +0.3%. Bitcoin is trading down -0.5% at 62,500, while Ethereum is down -0.7% at 1,650.
Macro & Fed
The FOMC meeting is scheduled for next week, and market participants are expecting a 25 basis point rate hike. The yield curve is currently inverted, with the 2-year yield at 4.8% and the 10-year yield at 4.55%.
| Time (HKT) | Release | Consensus | Why it matters |
|---|---|---|---|
| 21:30 | US Retail Sales | 0.5% | Indicator of consumer spending |
| 21:30 | US Industrial Production | 0.2% | Indicator of manufacturing activity |
| 21:30 | US Capacity Utilization | 78.5% | Indicator of economic growth |
Geopolitics & Global
- Tensions between the US and China continue to escalate, with the US imposing new tariffs on Chinese goods.
- The European Union is considering imposing sanctions on Russia in response to its actions in Ukraine.
- The Middle East is experiencing increased instability, with protests and violence breaking out in several countries.
- The US and North Korea are engaging in diplomatic talks, with the goal of reducing tensions and achieving denuclearization.
- The global economy is facing challenges, including a slowdown in growth and increasing trade tensions.
Earnings — What to Watch
| When (HKT) | Ticker | Consensus | What to look for |
|---|---|---|---|
| 21:30 | ORCL | 1.20 | Cloud computing sales and margins |
| 21:30 | CSCO | 0.80 | Networking sales and cybersecurity trends |
| 21:30 | AMAT | 1.50 | Semiconductor sales and manufacturing trends |
| 21:30 | INTC | 0.90 | PC sales and data center trends |
| 21:30 | MSFT | 2.20 | Cloud computing sales and Office 365 trends |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| AAPL | Technology | iPhone sales and services growth |
| AMZN | Consumer Discretionary | Cloud computing sales and e-commerce trends |
| GOOGL | Communication Services | Advertising sales and cloud computing trends |
| FB | Communication Services | Advertising sales and user engagement |
| TSLA | Consumer Discretionary | Electric vehicle sales and autonomous driving trends |
| BABA | Consumer Discretionary | E-commerce sales and cloud computing trends |
| JPM | Financials | Banking and financial services trends |
| GS | Financials | Investment banking and trading trends |
| UNH | Healthcare | Health insurance and medical trends |
| PG | Consumer Staples | Consumer goods and household trends |
What Could Break the Tape
- A strong US retail sales report could boost consumer discretionary stocks.
- A positive earnings report from a major tech company could drive the sector higher.
- A decrease in trade tensions between the US and China could boost global markets.
- A weak US industrial production report could indicate a slowdown in economic growth.
- A negative earnings report from a major company could drive the market lower.
- An increase in trade tensions between the US and China could hurt global markets.
Positioning Notes
- Investors are increasingly bullish on tech stocks, with 70% of respondents to a recent survey expecting the sector to outperform.
- Short interest in the S&P 500 has decreased to 1.5%, indicating a decrease in bearish sentiment.
- Options activity is indicating a increase in volatility, with the VIX up +10% over the past week.