Next Day Prep: Beware Semiconductor Sector Slump!
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow. Today’s market saw new all-time highs on the Dow and the S&P 500, but the rally felt weak, with most gains retraced by the close. Market breadth was negative, indicating a narrow rally driven by specific sectors.
Overnight Headlines
- Berkshire Hathaway’s UnitedHealth (UNH) investment boosted the Health Care sector, making it the top performer for the day.
- Semiconductor sector, led by Applied Materials (AMAT) and others like NVIDIA and Lam Research, faced a significant sell-off due to weak guidance and demand concerns.
Economic Announcements
Inflation fears and rate cut expectations shape market sentiment, with a slight dip in odds of a September rate cut and Chicago Fed President Goolsbee cautioning against overreaction to economic data.
Earnings Highlights
Stocks like Ascendis Pharma (ASND) and Equinix (EQIX) exhibit strength for continuation plays, while Apple (AAPL) and Regeneron (REGN) show potential breakout and anticipation setups, respectively.
Top Movers
- UNH: Up over twelve percent driven by Berkshire Hathaway’s investment.
- AMAT: Down over fourteen percent due to weak guidance, impacting the entire semiconductor sector.
- GOOGL (Alphabet) & FB (Meta): Providing support to Communication Services sector.
Quick Trade Ideas
Focus on stocks exhibiting relative strength like ASND, EQIX, AAPL, and REGN, while remaining cautious of market cracks and key support levels such as SPY at six-forty and QQQ at five-seventy-five.
Key Takeaway
Stay selective in trading, watch key support levels closely, and be mindful of emerging market weaknesses amid all-time highs. Emphasize relative strength and prudent risk management strategies to navigate current market conditions effectively.