Market indices remain mixed, chipmakers sell off


We’ve seen plenty of economic data, heard from Fed Chairman Powell again, and got more second quarter earnings reports during this trading day, but little has changed from closing bell to closing bell. : Nasdaq now has a three-day losing streak. , but with a grand total of 1.3%; the Dow Jones is up three consecutive days for an impressive + 0.3%, while the S&P 500 is still relatively stable. The Russell 2000 is down 4.15% since Monday’s close.

The Dow Jones started the regular trading session shedding 150 points before recovering at lunchtime, only to drop lower but without testing the daily lows, then closed moderately. The S&P, Nasdaq and Russell all suffered the same fall early in the afternoon and were unable to recover their gains at the close. Shares of chipmakers led markets lower, with a staunch NVIDIA NVDA 4.4% drop out on the day.

NVIDIA shares are up 44.6% year-to-date and + 87% from the same period a year ago. The inventor and market leader of programmable graphics processing units (GPUs), which traded at nearly $ 828 per share just a week ago, has come under intense scrutiny of late. This is likely to happen with any company that is trading over 40 times earnings, and with GPU-heavy Bitcoin having fallen over 21% in the past month.

That said, Zacks still ranks # 1 (strong buy) in NVIDIA stocks. For an in-depth discussion of this most recent ‘tech bubble’, check out Zacks strategist Kevin Cook’s latest post on the topic: Tech Bubble 2.0 + Inflation Tsunami: how to play them now

Following Jay Powell’s testimony to House officials yesterday, he made his rounds to the Senate Banking Committee today, sounding again the notes of the grand reopening that created a “shock to the system.” ‘economy. This is the main reason why his take on inflation continues to be “transient,” even though a growing number of analysts believe inflation is much more rigid.

However, based on Powell’s track record since maneuvering Fed policy to deal with the challenges at the very onset of the Covid-19 pandemic, he’s pretty solid. When many analysts were convinced earlier this year that the Grand Reopening would propel our economy into the stratosphere and that it needed to act immediately to counter the effects, Powell’s patience proved to keep the U.S. economy in a difficult position. healthy state.

Whether Powell and the voting members of the Fed are moving quickly enough to curb inflation over the long term remains an open question. But the 10-year bond yield doesn’t seem in a rush to go anywhere, still at 1.31% today. While questioning the Fed chairmanship becomes a kind of cottage industry among market participants, Powell’s steady hand has so far been kind of a reliable product.

Tomorrow morning, as the second quarter earnings reports continue to be tabled, Retail sales for June to become the economic metric to pay attention to. Expectations are for a -0.4% drop in the stock, although this reversed when volatile auto sales edged up + 0.4%. If this holds true, it would illustrate the supply disruptions affecting the auto industry – similar to what we saw with the prices of housing construction inputs a month or two ago – which could be worth the need to be deepened.

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