On Monday, July 8th local time, the three major US stock indexes fluctuated. As of the close, the Dow Jones Industrial Average fell 0.08%, the Nasdaq rose 0.28%, and the S&P 500 index rose 0.10%.
On the news front, Morgan Stanley strategist Mike Wilson stated that with increasing uncertainty surrounding the US presidential election, corporate financial reports, and Federal Reserve policy, the US stock market is highly likely to experience a 10% pullback.
In terms of individual stocks, Apple's stock price closed at a historic high, with its latest total market value reaching $3.49 trillion, surpassing Microsoft and returning to the top spot in the US stock market.
Morgan Stanley Strategist: The US stock market is highly likely to experience a 10% pullback
On Monday, July 8th local time, the three major US stock indexes fluctuated. As of the close, the Dow Jones Industrial Average fell 31.08 points, a decrease of 0.08%, to 39344.79 points; The Nasdaq rose 50.98 points, or 0.28%, to 18403.74 points; The S&P 500 index rose 5.66 points, or 0.10%, to 5572.85 points.
International precious metal futures generally closed lower, with COMEX gold futures closing 1.31% lower at $2366.4 per ounce, and London gold futures closing 1.36% lower at $2358.625 per ounce; COMEX silver futures closed 2.08% lower at $31.03 per ounce, while London silver futures closed 1.45% lower at $30.755 per ounce.
International oil prices have fallen across the board, with the August contract for US oil falling 1.13% to $82.22 per barrel; The September oil contract fell 1.01% to $85.67 per barrel.
The closing price of US Treasury yields fluctuated, with 2-year Treasury yields up 2.7 basis points to 4.641%, 3-year Treasury yields up 1.6 basis points to 4.422%, 5-year Treasury yields up 1.1 basis points to 4.247%, 10-year Treasury yields down 0.4 basis points to 4.285%, and 30-year Treasury yields down 1.2 basis points to 4.468%.
The S&P 500 index rose 0.10%, reaching a historic high for the 35th time this year. After UBS Group raised its target price to $150, Nvidia's stock price rose nearly 2%. Apple's stock price closed at a historic high, with its latest total market value reaching $3.49 trillion, surpassing Microsoft and returning to the top spot in the US stock market. The Q2 earnings season for the US stock market is set to kick off, with JPMorgan Chase, Citigroup, and Wells Fargo among the top six US banks announcing their results on Friday. Analysts have raised their profit expectations more than they lowered them. Federal Reserve Chairman Jerome Powell will deliver his semi annual testimony in Congress on Tuesday and Wednesday of this week.
John Stozfels of Oppenheimer Asset Management stated that a strong profit outlook and strong economy may support higher valuations. He raised the year-end target for the S&P 500 index to 5900 points. Scott Rubner from Goldman Sachs Group stated that the threshold for corporate performance is high and high expectations are deeply ingrained.
"As the financial reporting season begins this week, investors should be prepared for volatility, but once companies resume repurchases, the market may rebound again," said Mark Hackett of Nationwide.
Morgan Stanley strategist Mike Wilson believes that as uncertainty intensifies around the US presidential election, corporate financial reports, and Federal Reserve policy, traders should prepare for a pullback in the US stock market. He said, "I think there is a high possibility of a 10% pullback from now until some point during the US election period, and the third quarter will be more turbulent."
The US Consumer Price Index for June will be released this Thursday. The core CPI is seen as a better indicator of potential inflation, and analysts expect it to rise by 0.2% for the second consecutive month, the smallest consecutive increase since August last year.
"Although CPI data will be crucial, we will continue to monitor Powell's attitude," said Krishna Guha of Evercore
Nvidia's stock is currently rated on both sides
In terms of sectors, the 11 major sectors of the S&P 500 rose 5 times and fell 6 times. Among them, stocks in the information technology sector led the rise, while stocks in the communication services sector led the decline.
Popular technology stocks have fluctuated in price. Microelectronics and Intel rose over 6%, Chaowei Semiconductor rose nearly 4%, Broadcom rose over 2%, Arm and Nvidia rose nearly 2%, TSMC, Texas Instruments, and Qualcomm rose over 1%, Apple, Tesla, Lilly, and Asma rose slightly, Microsoft, Amazon, Micron, Netflix, and Google A fell slightly, while Cisco and Meta fell over 1%.
Nvidia rose 1.88%. Last Friday, Pierre Ferrague, an analyst at New Street Research, downgraded his rating of Nvidia's stock from "buy" to "neutral", making him one of the few analysts to hold a wait-and-see attitude towards the stock in recent times. But just one trading day later, UBS analyst Timothy Acuri made a completely different judgment. In Monday's report, he reiterated Nvidia's "buy" rating and raised the target price from the previous $120 to $150.
According to Timothy Acuri, this target price is based on Nvidia's profit expectations for 2025 and 2026 and a 28 times price to earnings ratio. For 2025, Timothy Acuri predicts that Nvidia will generate $204 billion in revenue, with earnings per share of $4.95, higher than the widely expected $157 billion and $3.57, respectively.
The UBS analyst explained that the order volume for the liquid cooling system to accommodate Nvidia Blackwell GPUs is significant. Timothy Acuri predicts that approximately 69000 sets of such systems will be shipped in 2025, with each shipment of 5000 sets adding approximately $9 billion in revenue and 20 cents in earnings per share for Nvidia.
Apple rose 0.65% and closed at $227.820, reaching a historic high. Its latest total market value reached $3.49 trillion, surpassing Microsoft and returning to the top spot in the US stock market. Previously, industry insiders stated that Apple has raised its stocking target for the iPhone 16 series to around 90 million units this year; During the 618 e-commerce promotion, Apple's sales significantly increased, which may have boosted Apple's sales expectations for the iPhone 16 series.
Tesla rose 0.56%. On Monday, Tesla clashed with a shareholder in court over a case demanding payment of $7.3 billion in legal fees. Shareholder Richard Tonita advocates that the cancellation of Musk's $56 billion compensation plan has brought benefits to Tesla, and his legal team should receive a certain proportion of legal fees equivalent to this ruling, which is approximately $7.3 billion based on Tesla's stock price on Monday. Court documents show that over 8000 Tesla shareholders have submitted approximately 1500 letters to the court challenging the fees.
Daniel Fischer, a law professor at the University of Chicago, argues that Tesla would not have any cash costs if Musk exercised stock options. She said, "Revoking the grant did not save Tesla a dollar, so billions of dollars in lawyer fees would be an unreasonable windfall."
Lilly rose 0.38%. Lilly announced its acquisition of Morphic Holding for $3.2 billion in cash, and the two companies announced on Monday that the move will enhance their inflammatory bowel disease (IBD) drug portfolio and expand their influence in the multi billion dollar market. Through this acquisition, Lilly will acquire Morphic's experimental oral IBD treatment drug, which provides patients with a more convenient dosing option than other injection therapies. In addition, Morphic's main drug MORF-057 is currently undergoing three mid-term studies for the treatment of ulcerative colitis and Crohn's disease. In addition, Morphic is also developing other drugs targeting autoimmune diseases, pulmonary hypertension, fibrotic diseases, and cancer, which are currently in animal or in vitro experimental stages. The two companies expect the acquisition to be completed in the third quarter of 2024. BMO analyst Evan Segman stated that this transaction aligns with Lilly's diversification plan beyond obesity and is a supplement to its recent series of "additional" transactions. Affected by this news, Morphic's stock price soared by over 75% and closed at $55.74.
TSMC rose 1.43%. TSMC's stock price rose by over 4% during the trading session, with a market value exceeding $1 trillion at one point. The closing gain narrowed to 1.43%. Since the beginning of this year, TSMC's US stock price has risen by over 80%. On the news front, multiple institutions such as Morgan Stanley have raised their target prices, and it is expected that TSMC will soon raise its annual sales expectations in its financial reports. A report from Morgan Stanley shows that the latest supply chain data indicates that TSMC is conveying a message that leading OEM supply in 2025 may be tight, and if TSMC's value is not accepted, customers may not be able to obtain sufficient capacity allocation.
In addition, institutions such as Nomura and Mizuho Securities are optimistic about TSMC's upcoming Q2 performance. On July 18th, TSMC will disclose its performance for the second quarter of the 2024 fiscal year. The market generally expects that TSMC's revenue in the second quarter will increase by 36% year-on-year, the fastest growth rate since the fourth quarter of 2022.
Large bank stocks fluctuated between gains and losses. Citigroup rose more than 1%, Morgan Stanley rose 1%, Bank of America, JPMorgan Chase, and Goldman Sachs rose slightly, BlackRock and UBS Group fell slightly, and Wells Fargo fell more than 1%.
Citigroup rose 1.11%. Due to weak demand from institutional clients and a decrease in international banking business, Citigroup will end its 50 year business in Haiti. The bank stated on Monday that this exit is part of its strategy and will not have a significant economic impact on Citigroup. With the approval of the Central Bank of Haiti - the Bank of the Republic of Haiti, Citigroup will voluntarily relinquish its banking license. However, Citigroup stated that it will continue to provide international banking and correspondent banking services to existing clients.
Energy stocks mostly fell. US Energy, Western Oil, BP, and ExxonMobil fell more than 1%, Shell and ConocoPhillips slightly declined, Chevron and Murphy slightly increased, and Brazil's oil rose more than 2%.
ExxonMobil fell 1.05%. ExxonMobil stated on Monday that lower natural gas prices and lower refining profits are expected to affect second quarter profits. Compared to the first quarter, changes in natural gas prices may result in a decrease of $300 million to $700 million in quarterly upstream profits. However, the rise in crude oil prices helped offset this weakness, and ExxonMobil expects oil revenue to increase by at least $300 million. ExxonMobil also stated that the decline in refining profit margins will have a negative impact on second quarter profits, with the impact ranging from $1.1 billion to $1.5 billion compared to the previous quarter.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index falling 1.05%. Futu Holdings fell more than 7%, Xiaopeng Automobile fell nearly 6%, NIO fell more than 3%, iQiyi fell more than 2%, Weibo, Alibaba, Ideal Automobile, Baidu, Pinduoduo, and JD.com fell more than 1%, Manbang, Douyu, Huya, New Oriental, NetEase, and Tencent Music fell slightly, and Bilibili rose more than 2%.