Next Day Prep: Fed-Driven Money Flow Unveils Tech Gems
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
The S&P 500 just printed a new all-time high, indicating resilience despite a government shutdown. However, beneath the surface, significant money movements reveal clear winners and losers offering opportunities for traders.
Overnight Headlines
- Fed Influence: Market focused on weak economic data, anticipating rate cuts as ADP payrolls report indicated job losses and ISM Manufacturing remained in contraction.
- Sector Sparks: Health Care surged driven by “TrumpRx” initiative, while tech, especially semiconductors, and Consumer Discretionary also exhibited strength.
Economic Announcements
The market is pricing in a 100% chance of a rate cut in October and nearly 90% chance for another in December, with bond yields reflecting the anticipated moves.
Earnings Highlights
Health Care sector saw impressive gains driven by headlines, particularly in companies like LLY (Eli Lilly), TMO (Thermo Fisher), and BIIB (Biogen).
Top Movers
Semiconductor sector, especially SOX index, showed significant strength. Utilities attracted attention due to M&A buzz like the potential $38 billion buyout for AES.
Quick Trade Ideas
- C-R-W-D (CrowdStrike): Focus on volume and relative strength, watch for a base around $497 for potential move through $500.
- A-M-A-T (Applied Materials): Monitor breakout base around $217 for entry signal targeting $220.
- APLD: Speculative play with breakout potential at $24.50 level for a swing trade.
- T-S-M (Taiwan Semi): Anticipating a breakout in a strong market group, waiting for volume confirmation.
Key Takeaway
Market strength persists with a focus on sector rotations and momentum leaders attracting institutional investments. Stay agile and capitalize on current opportunities.