13 Sep Buy-The-Dip Help To Power Mega Cap and Semiconductor Sector

13 Sep the stock market ended the week with rebound after experience the previous week’s significant declines. Investors are on the Buy-the-dip mode and this strong interest supported the market,

This create an upside momentum which acted as a catalyst by Friday (13 Sep) where we saw huge participation from many stocks especially mega caps and semiconductors stocks has an oversized influence on the index gains.

When August Consumer Price Index (CPI) release on Wednesday (11 Sep), we saw selling interest gathering from investors and market start to exhibit shaky momentum.

Core-CPI, which excludes food and energy, remained above the Fed's 2.0% target at 3.2% year-over-year. Stocks quickly recovered when the S&P 500 held above previous Friday's low (5,402) on Wednesday's initial retreat. The strength in NVIDIA (NVDA) also helped get stocks back on a winning track.

Other data this week garnered muted responses from stocks and bonds. Initial jobless claims were little changed and remain below recession-like levels at 230,000, and the August Producer Price Index reflected moderating inflation at the wholesale level.

As market became concerned about the economic growth, we saw selling interest in the past few weeks, but last week’s price action started to show signal suggesting a shift in the concern.

By Friday (13 Sep), we have the small and mid-cap stocks outperformed their larger peers, this indicate that investors are believing that the U.S. economy will enjoy a soft landing and that the Fed will cut rates to secure that soft landing.

Market participants now see a higher likelihood of a 50 basis points rate cut at next week's FOMC meeting. The fed funds futures market shows a 59.0% probability of a 50 basis points rate cut in September, up from 30.0% last Friday, according to the CME FedWatch Tool.

The 2-year yield, which is most sensitive to changes in the fed funds rate, dropped seven basis points this week to 3.595%, and the 10-year yield dropped six basis points to 3.657%.

After last Friday (13 Sep), we have the information technology and consumer discretionary sectors lead the pack by wide margin with +8.10% and +5.53% respectively.

The only S&P 500 sector which closed lower in the red is Energy with -0.49%.

Trump Media & Technology (DJT) surged 25% on Friday afternoon after former President Donald Trump announced he would not sell his shares in the company. The stock closed up 11.8%, despite sliding 60% over the past six months. This comes ahead of a key lockup expiration, allowing insiders to sell or borrow against their shares. Trump's decision suggests his preference to maintain control over his social media platform, Truth Social.

Vistra Energy (VST) saw a 6.3% rise in Friday's trading after Jefferies named it the top pick in the power sector. The analyst highlighted Vistra's strategic acquisitions and effective risk management, positioning it well for current power markets. The acquisition of Energy Harbor's nuclear portfolio in 2023 was particularly noted as a significant strategic advantage.

Broadcom have shown strong upward trend from MTF, and it is trading above both short and long term MA, I have confidence that Broadcom would continue to exhibit the upside potential as we see semiconductor sector stocks recover.

Similarly, Palantir is also exhibiting a upward trend and it is a strong one, where PLTR continued to trade above the short and long term MA, ahead of its adding to S&P 500.

So this week might be the last chance if we need to load more or buy PLTR.

I am still holding my position on PLTR.

Electronic Arts (EA) will hold its Investor Day next week, while Stellantis (STLA) will host a press conference. These events are expected to provide insights into their future strategies and potential market impacts.

Equity Residential (EQR) declared a $0.675/share quarterly dividend, maintaining a forward yield of 3.46%. The dividend is payable on October 11, for shareholders of record as of 24 September.

I believe traders and investors would be continuing to buy the dip while there are some sectors like semiconductor which could see some profit taking in order to readjust the portfolio.

This week we could be expecting the rate cut, where the anticipation of 50 basis points cut have been growing, but I would think too much might hurt the market.

Appreciate if you could share your thoughts in the comment section whether you think market would give a positive bias this week with FOMC meeting anticipation of rate cut.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.