Weekly Market Morning (July 7) Tesla Gains (27%), S&P 500 and Nasdaq Hit All-Time High

Economic Reports

Federal Reserve Chair Jerome Powell described recent inflation readings as promising steps in the right direction but said that they need to be sure about the sustainability of that trend before cutting interest rates.

The unemployment rate in the United States rose to 4.1% in June 2024, the highest since November 2021. This is up from 4% in the previous month and surprising market expectations, which had increased the forecast of cutting rate in September. 

Labor Department data on Friday showed nonfarm payrolls rose by 206K last month, surpassing the 190K increase expected.

The decrease in the ISM index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020. Survey respondents report that in general, business is flat or lower, although inflation is easing in index, some commodities have significantly higher costs.

Indices

The S&P 500 and the Nasdaq notched record closing highs on Friday as traders sweated to the close of the first scorching week of July under the power of a mega cap rally and a Fed-friendly jobs report.

The S&P 500 index started the second half of 2024 with a 1.39% weekly gain. However, S&P 500 has a Fibonacci resistance at 5,764 and also, it reaches top of the rising channel. 

Stocks

Stock market sector performance:

Source: Finviz

The technology, communication services and consumer discretionary sectors are the week’s top gainer.

Also, here is the stock market performance:

Source: Finviz

Tesla stock (TSLA) is staging a comeback so powerful it’s making the haters look bad. After a painful 40% loss early this year. What helped Tesla recover from such a deep loss was investor optimism even if the electric-car maker didn’t exactly go above and beyond. 

Over the past couple months, shares of Tesla have rebounded by an impressive 75%. More recently, earlier this week, Tesla reported its second-quarter delivery figures, and that hype extended the share-price run to a weekly gain of 27%. As we expected in last week’s report Tesla price completed inverse head and shoulder pattern, then price rose significantly. Also, the price had broken the downward trend-line. Moreover, there are resistance at $260 and $300.

Meta Platforms, Inc (META) stock hit a 52-week and all-time high on Friday. Meta has introduced a new approach to artificial intelligence (AI) by releasing pre-trained models that utilize a great multi-token prediction method. 

Separate reports indicate Meta plans to incorporate more generative AI technology into its virtual reality (VR), augmented reality (AR), and mixed reality games to boost its metaverse strategy. Meanwhile, Meta’s Threads has grown to over 175 million monthly users, rapidly catching up to Elon Musk’s X, formerly Twitter. 

In technical analysis Meta has Fibonacci resistance in its uptrend as you in the image below.

Advanced Micro Devices (AMD) continues to innovate in AI technologies, enhancing its AMD ROCm 6 open-source software platform to align with advancements in AI frameworks. Recent updates, such as improved GPU performance for deep-learning applications.

If AMD price can break $175, then there is good possibility of surging until $208.

Commodity

Last week was a good week for commodities, especially metal and energy sectors. Here’s we can see metal’s great weekly performance:

Source: Finviz

Based on the most active contract, gold prices were up 2.8% for the week, which was the strongest weekly rise since the week ended May 10. Gold prices are up because the dollar is down, and with the rise in the unemployment rate, U.S. recession risks are up.

In technical analysis, gold price breaks an important line. If price can stay above $2390, then price can rise until the $2440 resistance.

Forex

Forex market last week’s performance:

Source: Tradingview

Crypto

Crypto markets experienced a sudden and severe decline in value last week, as you can see below.

Source: quantifycrypto

Next Week’s Outlook

Economic Events

In the United States, attention will be paid to the release of CPI and PPI data for June, followed by Federal Reserve Chair Powell’s semi-annual testimony on monetary policy at the Senate Banking Committee. Additionally, investors will closely follow the Michigan consumer confidence report.

Earning Events 

JPMorgan Co, Wells Fargo Co and Citigroup Inc. all report second-quarter earnings next Friday after relative strength in their stock prices this year as investors continue to lean into the U.S.’s largest banks as havens from banking-sector woes.

The biggest banks have been able to deflect concerns about exposure to office-property loans that have weighed on banks with fewer revenue streams.