As the new year began, investors were buoyed by hopes that the Federal Reserve would soon enact rate cuts, aiming to counterbalance some of the most aggressive tightening measures witnessed in decades. However, recent months have dashed these hopes as inflationary pressures have surged, prompting a sobering reassessment of market expectations.
Investors are now on high alert, meticulously scrutinizing every inflation data release for clues regarding the timing and likelihood of potential rate cuts by the Fed this year. The latest blow came with a March consumer price index reading that surpassed expectations, triggering a rapid sell-off in the markets.
Minutes from the Fed's recent meeting underscored the lingering concerns among some policymakers regarding the trajectory of inflation towards the central bank's 2% target. While acknowledging the existence of inflationary pressures, there persists a cautious optimism among Federal Reserve officials regarding the possibility of interest rate reductions later in the year.
Adding to the market's woes are the geopolitical uncertainties and the relentless surge in energy prices, both of which pose significant risks to sustaining elevated inflation levels. Against this backdrop, navigating the stock market has become increasingly challenging, with investors bracing themselves for continued volatility and unpredictability in the months ahead.
Nvidia: (Slightly Bearish) More competition is coming
Chip manufacturing giant Nvidia has entered a correction zone. Investors may be taking profits in the stock, coupled with several factors that are not signaling favorable prospects for Nvidia in the coming years.
The exact reasons for Nvidia's decline are not yet clear. Investors may be taking profits in the stock, which has surged over 200% in the past 12 months. On Tuesday, its competitor chipmaker Intel unveiled a new artificial intelligence chip called Gaudi 3, aimed at powering large language models—the foundational technology behind generative AI tools like OpenAI's ChatGPT.
Intel claims that the efficiency of this new chip is more than twice that of Nvidia's most advanced graphics card, the H100 GPU, and it runs AI models 1.5 times faster than Nvidia GPUs.
NVDA (H4). Failed to breakout All Time High level, Nvidia shares are traded between Minor Resistance level in 905.00 and Support level in 842.50
Apple: (Slightly Bullish) Transition to AI-focused chips
Apple experienced a notable surge in its stock price following a report by Bloomberg News, which indicated that the tech giant was poised to transition its Mac product line to chips specifically designed for artificial intelligence applications. This strategic move, if realized, signifies a significant pivot in Apple's hardware development strategy, emphasizing the growing importance of AI technology in computing.
The transition to AI-focused chips suggests that Apple is aiming to enhance the performance and efficiency of its Mac lineup, catering to the increasing demand for advanced AI capabilities in various sectors, including machine learning, data analysis, and augmented reality. By leveraging custom-designed chips optimized for AI tasks, Apple seeks to position its Mac devices at the forefront of innovation, potentially redefining the capabilities and user experience offered by its products.
AAPL (H4). Escaping 169.00 level as six-months lowest price, Apple shares are pushed upwards and ready to breakout Resistance level in 178.00
Amazon (Slightly Bullish) Ramping up investments in emerging technologies
Amazon shares surged and reached an unprecedented peak and marking a significant milestone for the company. This surge represents the first time the stock has achieved a record high since July 2021, signaling renewed investor confidence in Amazon's growth trajectory and future prospects.
The rally was fueled by CEO Andy Jassy's release of his annual shareholder letter on Thursday, which outlined the company's strategic priorities and vision for the future. In the letter, Jassy reiterated Amazon's commitment to driving down costs while simultaneously ramping up investments in emerging technologies, particularly artificial intelligence (AI).
Jassy's pledge to prioritize cost reduction initiatives underscores Amazon's ongoing efforts to enhance operational efficiency and profitability across its vast array of business segments. By streamlining processes and optimizing resource allocation, Amazon aims to bolster its competitive position and drive sustained growth in an increasingly dynamic marketplace.
AMZN (H4). Traded higher last week, Amazon has no signs of making any Correction. Still in Bullish period even in Bigger timeframes
Fullerton Markets Research Team
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