Nasdaq leads stocks higher after Biden backs out

July 22, 2024

6 minutes read

US stocks rose on Monday with tech leading the gains as investors assessed the potential fallout from President Joe Biden’s exit from the presidential race.

The S&P 500 (^GSPC) gained 07% while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 0.5%, both coming off their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) erased earlier gains to hover near the flatline.

Chip heavyweight Nvidia (NVDA) led a broad-based tech rebound following heavy losses last week as investors rotated out of big cap names.

Investors are surveying a changed political landscape after Biden called off his reelection bid on Sunday and backed his vice president, Kamala Harris, to replace him as the Democratic nominee. The political shock could inject more volatility into an already battered stock market, distracting focus from this week’s flood of earnings and key inflation release.

Biden’s move, while not unexpected after weeks of pressure, is seen on Wall Street as eroding the odds of Republican contender Donald Trump securing a return to the White House. That could prompt a light unwinding of recent “Trump trade” bets on assets seen as benefiting from a second Trump presidency, such as bitcoin, bank stocks, and higher US bond yields. The yield on the benchmark 10-year Treasury (^TNX) slipped in Monday’s early hours.

Meanwhile, earnings season is about to kick into higher gear, with a stream of S&P 500 companies expected to report in a week headlined by Alphabet (GOOGL, GOOG), Tesla (TSLA), and Chipotle (CMG).

Those results will give insight into the economy and the consumer ahead of Thursday’s report on second quarter GDP and Friday’s update on the Federal Reserve’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index.

Live8 updates

Mon, July 22, 2024 at 4:51 PM GMT+1

Crypto surges on political respect as Donald Trump courts bitcoin enthusiasts

Yahoo Finance’s David Hollerith reports:

Crypto is surging again on a new wave of political respect as former President Donald Trump prepares to speak this week at a bitcoin conference in Nashville.

The price of bitcoin (BTC-USD) is up more than 13% over the past month and surged above $68,000 in the last 24 hours, putting the world’s largest cryptocurrency within striking distance of an all-time high set earlier this year.

This week, crypto investors are anticipating several reasons to get more hyped, including Securities and Exchange Commission approvals for big Wall Street money managers to issue exchange-traded funds that hold ether (ETH-USD), the world’s second-largest cryptocurrency.

Read more here:
Mon, July 22, 2024 at 3:47 PM GMT+1

Tech regains lead as Nvidia, Tesla, Alphabet stocks rise

Tech stocks regained the market lead on Monday after last week’s heavy sell-off of big-cap names in the Nasdaq (^IXIC) and S&P 500 (^GSPC).

The S&P 500 Technology ETF (XLK) gained more than 2%, reversing a recent rotation out of the sector.

Chip heavyweight Nvidia (NVDA) gained more than 4%, while EV giant Tesla (TSLA) rose more than 3%.

Social media platform Meta (META) also gained more than 2%. Tech giant Alphabet (GOOGL, GOOG) spiked more than 2%. Both Alphabet and Tesla are expected to report quarterly results on Tuesday after the market close.

Tech retakes market lead on Monday as stocks Nvidia, Tesla and Meta rise.
Mon, July 22, 2024 at 3:33 PM GMT+1

Coca-Cola expected to see momentum continue in Q2 despite cautious consumers

Investors hope Coca-Cola (KO) will hold on to its momentum and deliver a bubbly quarter on Tuesday, Yahoo Finance’s Brooke DiPalma reports.

Based on Bloomberg estimates, Wall Street expects to see revenue come in at $11.76 billion, down 1.75% compared with last year. Earnings per share are estimated to be $0.81, up 3.31% year over year.

That’s compared with Q1, when Coca-Cola reported $11.3 billion in revenue, beating Wall Street estimates of $10.96 billion, while its earnings per share of $0.72 topped expectations of $0.70.

Price increases taken by the company are set to drive growth yet again this quarter, per CFRA analyst Garrett Nelson.

Read more here.
Mon, July 22, 2024 at 2:50 PM GMT+1

Nvidia rises 4% as chip stocks rebound

Chip stocks rebounded on Monday after a week of heavy losses in the semiconductor space.

AI heavyweight Nvidia’s (NVDA) shares rose more than 4% in early trading after losing more than 8% last week.

Chip manufacturer ASML’s (ASML) stock gained more than 3%. Semiconductor foundry TSMC (TSM) also rose.

The chip sector has seen steep losses recently as investors rotated out of tech stocks. Those declines were exacerbated last week as geopolitical headwinds for the semiconductor industry emerged.

Chip stocks rebounded on Monday
Mon, July 22, 2024 at 2:33 PM GMT+1

Nasdaq opens higher after Biden pulls out of presidential race

The major averages opened higher on Monday as investors assessed the path of the presidential election after President Joe Biden exited the 2024 race.

The S&P 500 (^GSPC) rose sharply, while the tech-heavy Nasdaq Composite (^IXIC) jumped 1% at the open after both indexes ended Friday with their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) moved up 0.1%.

On Sunday, Biden called off his reelection bid and backed Vice President Kamala Harris to replace him at the top of the democratic ticket.

Investors await a flood of earnings and a key PCE inflation release this week.

Alphabet (GOOGL, GOOG), Tesla (TSLA), and Chipotle (CMG) are some of the companies reporting quarterly results this week.
Mon, July 22, 2024 at 10:23 AM GMT+1
Starbucks finds Elliott at its doorstep

Good to see Starbucks (SBUX) getting a wake-up call.

WSJ reported late Friday that Elliott Management took a stake in the struggling coffee seller.

In typical Starbucks form, they told Yahoo Finance that they “do not comment on rumor or speculation.” However, Elliott is now involved here, based on my understanding of the situation.

I outlined 10 things wrong with Starbucks on X. Many of these are deeply rooted issues I have seen spread over the past decade, so Elliott, despite all of its power, is unlikely to fix them.

But Bernstein restaurant analyst Danilo Gargiulo sees a path to unlocking shareholder value at Starbucks.

Here they are:

Invest in top-level talent and leadership with operational and restaurant experience.

Reduce unit growth and expedite the transition to more purpose-built stores.

Reset the value perception.

Accelerate throughput and improve predictability of service times.

Enhance consumer experience.

Invest in purposeful innovation to attract core consumers and younger generations.

Reestablish neutrality of the brand on political stances (move HQ away from Seattle?).

Franchise China operations.

Optimize expenses.

Reset long-term guidance and market expectations.
Mon, July 22, 2024 at 10:13 AM GMT+1

Eyes on: Nvidia

Nvidia (NVDA) is catching a bid this morning, up 2% premarket on a bullish 30-day trading call by Citi.

Says Citi’s Atif Malik:

“We are opening a positive catalyst watch on NVDA into SIGGRAPH 2024 conference for three reasons. First, NVIDIA CEO Jensen Huang and Meta (META) CEO Mark Zuckerberg will likely discuss the future of AI and we believe NVIDIA could announce the much-anticipated standalone Arm-Based Grace CPU for servers. Second, the CEO discussion should shed positive light on how NVIDIA’s end customers make money or their ROI profile, a key topic on investors’ minds these days. Third, we expect to hear accelerating AI demand trend at the conference with no signs of an air pocket and view the recent pullback in the stock (13% P/E discount to 3-year average) on geopolitical concerns as a buying opportunity.”

SIGGRAPH kicks off on July 28. Huang is slated to perform two fireside chats.
Mon, July 22, 2024 at 10:06 AM GMT+1

One thing to watch in today’s session following Biden’s decision

Keep an eye on the “Trump Trade” following Biden’s decision to not seek reelection.

Over the past month, stocks seen as tied to Trump’s possible policies have risen nicely — for example, shares of Exxon Mobil Corporation (XOM) are up 5% in the past month. Lockheed Martin (LMT) is up 1.6%, outperforming the S&P 500 (^GSPC).

Here’s the vibe on Trump Trade, according to BTIG’s policy expert Isaac Boltansky:

“With a new Democratic presidential challenger expected, we could see a reversal in some market moves linked to the ‘Trump Trade.’ This is understandable as markets will be forced to reassess the odds of Trump winning without knowing his official challenger. Furthermore, we believe that Biden exiting leaves the House as more of a toss up than leaning Republican. With that being said, we continue to view Trump as the slight favorite and note that many beneficiaries of a second Trump administration are based on administrative shifts rather than legislative changes. These beneficiaries include private prisons, digital assets, and firms exposed to an uptick in M&A. Trump’s trade policy would likely be largely the same in a divided government scenario as well. We continue to expect a punt and extension of most of the $4.6T in expiring tax provisions, but as a general matter spending should be relatively easier in a divided government scenario.”