On Tuesday (November 21st), as the minutes of the Federal Reserve meeting reiterated the central bank's cautious attitude, stocks, bonds, and the US dollar remained almost unchanged. Traders focused on Nvidia's performance after the significant rise in major technology stocks this year.
In late trading, Nvidia, the world's most valuable chip manufacturer, failed to meet investors' extremely high expectations with its latest forecast, resulting in significant fluctuations in its stock price. Nvidia's latest quarterly revenue is approximately $20 billion. Although this exceeded the average analyst expectation of $17.9 billion, some of the predictions were as high as $21 billion.
Driven by the prosperity of artificial intelligence, the resilience of American companies, and the bet that the Federal Reserve will shift to interest rate cuts next year, the market value of the S&P 500 index has increased by $6 trillion. This upward trend has only brought the index back to its historical high by about 5%.
Matt Maley, Chief Market Strategist at Miller Tabak+Co, said, "The stock market is once again pricing perfectly. Due to the current oversold level in the stock market being higher than three weeks ago, investors need to maintain a very flexible attitude as the end of November and December approaches
LPL Financial analyst Quincy Krosby said, "The surge in the market is entirely based on people's belief that the Federal Reserve has completed its rate hike cycle and will cut rates in 2024. However, the minutes of the Federal Reserve meeting emphasize the latest information that officials are still not prepared to announce victory and there are currently no plans to relax policies
Janney Montgomery Scott analyst Dan Wantrobski said, "The short-term chart of the S&P 500 currently shows a negative deviation between price trends (near the recent high of 2023) and momentum (lower high)
Dan Wantrobski pointed out, "This is a sign that even if the Standard&Poor's index tries to test the low range of 4600, purchasing power is still weakening. The market is now vulnerable to profit taking and consolidation in the short term. We also believe that the index will remain vulnerable to increased volatility/correction in the first half of 2024
According to data from Goldman Sachs Group, hedge funds' bets on the US stock market have reached their most concentrated level in the past 22 years. The most popular bets are still large technology companies, including Microsoft, Amazon, and Meta, which were included in Goldman Sachs' "hedge fund VIP" list for this quarter.
Bank of America analyst Savita Subramanian believes that the S&P 500 index will hit a new high in 2024 as American companies have adapted to higher interest rates and withstood macroeconomic shocks. She expects the index to reach a record high of 5000 points by the end of 2024. This is about 10% higher than Tuesday's closing price. She said that next year will be a "paradise for stock pickers".
Stephen Suttmeier, a technology strategist at Bank of America, wrote that as the US stock market approaches a decisive bullish breakthrough, they have "greater upward potential". If the S&P 500 Index can break through 4,60
