Thanks to the upward momentum of the "Seven Big Companies" technology companies, as of the week ending January 19th, the three major US stock indexes collectively closed higher, with the Dow Jones and S&P 500 reaching new closing highs; Nvidia's stock price has reached a new high, and after witnessing Nvidia's outstanding performance over the past year, investors are looking for "catch-up" trading targets, with AMD becoming a favored target for institutions; The market's enthusiasm for bullish international gold prices has cooled, and this week international gold prices are under pressure. Institutions believe that in the long run, international gold prices still have strong support.
The US stock index has risen to record levels
As of the week ending January 19th, the three major US stock indexes collectively closed higher, with the Dow Jones Index up 0.72% this week; The Nasdaq has risen by a cumulative 2.26% this week; The S&P 500 index has risen a cumulative 1.17% this week. The Dow Jones and S&P 500 index hit a new closing high.
Wind
Market analysis suggests that the rebound of the index to record levels is mainly driven by the rise of the "Big Seven" technology companies - Alphabe, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.
However, Jim Caron, Co Chief Investment Officer of Morgan Stanley Investment Management, believes that if interest rate cuts are less than six times this year, "bond yields will naturally rise, and due to the high correlation between stocks and bonds, this will put pressure on the stock market.".
Deutsche Bank strategist Jim Reid said, "Historical data shows that the Federal Reserve cut interest rates by over 150 basis points within a year, almost entirely due to economic recession. If the US economy had not fallen into recession, historical precedents indicate that the threshold for a 150 basis point rate cut within 12 months is very high."
Normally, the Federal Reserve will significantly lower interest rates when the economy enters a recession. Kyle Rodda, a senior market analyst at Capital.com, said that from now on, either profit expectations will be lowered and stock prices will fall accordingly; Either the impact of interest rate cuts is digested and stock prices fall accordingly.
AMD Challenge NVIDIA
After witnessing Nvidia's outstanding performance over the past year, investors are looking for "catch-up" trading targets. Benefiting from the wave of artificial intelligence, Nvidia's stock price hit a new high on January 19th, approaching $600. The cumulative increase in three weeks from the beginning of the year to now has exceeded 20%, and its market value is close to $1.5 trillion. AMD has risen over 18% this week, with its latest market value at $281.5 billion.
Last December, AMD released the new MI300 series AI chips in an attempt to challenge Nvidia's dominant position in the field of artificial intelligence chips. AMD claims that the MI300 series chips perform better than Nvidia's H100 graphics cards and have received orders from Microsoft, Oracle, Meta, and OpenAI.
Technology analyst Beth Kindig predicts that the shipment of MI300 chips this year will reach 300000 to 400000 pieces, and the shipment of Nvidia H100 will reach 1.5-2 million pieces.
Barclays Bank has raised its target price for AMD's stock price from $120 to $200, and is expected to achieve $4 billion in AI chip sales this year. At the same time, KeyBanc analysts, a well-known investment bank on Wall Street, raised the AMD target price from $170 to $195, reflecting strong demand for AI servers and confidence in future potential among major companies.
US investment bank Cowen continues to be bullish on AMD, raising its target stock price from $130 to $185 and stating that the MI300 is becoming an increasingly powerful alternative to the AI market. In addition, American investment bank Susquehanna Financial has raised AMD's target price to $170. In the view of analysts, although Nvidia's leading position cannot be underestimated, the market's expectations and demand for a second provider will further develop the software ecosystem, which is conducive to the rise of AMD.
Gold rebounds hit hard
According to Wind data, as of January 19th, COMEX gold futures have cumulatively fallen by 0.97% this week.
Market analysis suggests that the tension between the Houser rebels and the US military on the main commercial route crossing the Red Sea is intensifying this week. In this context, precious metals have achieved a significant recovery, but the recent outlook has not turned bullish as the bets supporting the Federal Reserve's interest rate cut have decreased, and further upward momentum seems to be limited.
According to Dayou Futures, in the short term, American consumption is resilient, which makes the market think that the probability of a soft landing of the economy will increase, and the expectation of interest rate reduction will decrease. The actual yield of the 10-year treasury bond bonds of the United States will begin to rebound, and the enthusiasm of the market for long international gold prices will begin to decrease. In the short term, international gold prices will be under pressure. However, in the long run, there is still a possibility of further weakness in consumption as the main driving force of the US economy, and the shift in the Federal Reserve's monetary policy this year is also very certain. This means that international gold prices may still have strong support, and the long-term upward trend may still be maintained.
Guojin Securities believes that under the framework of real interest rates, it is currently in the right allocation period for gold stocks before the Federal Reserve stops raising interest rates and releases a clear interest rate cut signal. Moreover, the relative returns of gold stocks have not yet fulfilled all expectations of a rise in gold prices. It is expected that gold stocks will experience a major upward trend after the Federal Reserve releases a clear interest rate cut signal.
