Stocks Rebound Across U.S.

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💰Stocks Rebound Across U.S.

Welcome to Money Masters!

The U.S. stock market is showing signs of resilience as stocks rebound after a period of volatility. Key sectors, particularly technology, are driving this recovery, with major indices posting impressive gains. Investors are optimistic as economic indicators and corporate earnings reports paint a brighter picture for the second half of 2024.

Let’s go.

BIG IDEA 1💡
Market Movements and Economic Indicators

U.S. Stock Market Rebounds

• Tech Recovery: Tech stocks bounced back with the NASDAQ Composite rising 1.26%, driven by Nvidia's (NASDAQ: NVDA) 6.8% gain after a three-day decline.

• PCE Inflation Focus: The market is eyeing the PCE price index, the Federal Reserve’s preferred inflation gauge, expected to show mild cooling but remain above the 2% target.

• Labor Market Stability: The labor market has returned to near pre-pandemic conditions, bolstered by an increase in labor supply.

Interest Rates and AI Investments

• Rate Cuts Forecast: UBS expects the global rate-cutting cycle to gain momentum in the second half of 2024, with the Federal Reserve making two 25-basis-point cuts.

• Economic Data: Despite strong May jobs data, other indicators point to slowdown in economic activity, justifying potential rate cuts.

• AI Growth: AI-driven growth has significantly benefited tech stocks. UBS expects continued robust capital investment in AI, driving earnings growth for companies in the enabling layer.

U.S. Election and Market Volatility

• Election Impact: The U.S. presidential election between Joe Biden and Donald Trump is anticipated to trigger market volatility.

• UBS Predictions: UBS assigns a 45% probability to a Trump victory with Republican control of Congress, suggesting investors manage risks in sectors like consumer discretionary and renewables.

• Strategic Diversification: UBS recommends diversifying investment exposures to withstand election-related uncertainties.

BIG IDEA 2💡
Corporate Earnings and Market Insights

Stifel's Optimistic Outlook on Tesla

• FedEx Earnings: Anticipation builds for FedEx’s (NYSE: FDX) quarterly earnings report.

• Stock Movements: Birkenstock (NYSE: BIRK) shares fell 4.1% due to a public offering, while SolarEdge Technologies (NASDAQ: SEDG) dropped 20.6% after announcing a $300 million debt offering.

• Novo Nordisk Approval: Novo Nordisk (NYSE: NVO) rose 3.3% after its Wegovy weight-loss treatment received approval in China.

Retail Sales Show Weakness

• Buy Rating: Stifel sets a Buy rating on Tesla (NASDAQ: TSLA) with a price target of $265, indicating a 45% upside.

• Model Refreshes: The revamped Model 3 and upcoming Model Y refresh are expected to drive sales, along with the next-generation Model 2.

• AI and FSD: Tesla's AI-based Full Self-Driving (FSD) technology is projected to generate significant value through sales and potential licensing agreements.

Crude Oil and Summer Trends

• Oil Prices: Crude prices dipped, with U.S. crude futures (WTI) at $80.79 per barrel. API’s forecast on U.S. crude inventories is expected to show a decline.

• Summer Demand: Both WTI and Brent benchmarks rose about 3% last week, driven by peak summer consumption.

• Market Performance: The technology sector’s strength contributed to a 14% year-to-date rise in the S&P 500.

Let’s hope these new designs actually do help Tesla.

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