Market Summary 9th July 2024

As we edge closer to earnings season, few stocks have shown the ability to sustain upward trajectories. It will be particularly interesting to monitor how AI-focused companies fare in their upcoming reports, especially regarding any meaningful contributions to earnings per share (EPS) or revenue from their investments in AI technology. With billions invested in anticipation of future profits, these companies will soon need to demonstrate tangible progress. While we expect EPS gains eventually, the market can sometimes advance too quickly, necessitating a correction as actual results strive to meet high expectations.

Continuing to focus intently on the few winners (as they are exceedingly rare), we must diligently manage open risks, particularly in crowded trades that can unravel quickly. I’ve observed the Nasdaq pushing higher, hoping for wider market participation. Yet, as the Nasdaq approaches its upper channel, we’ve not seen this broadening occur, and net lows have reemerged, raising concerns about the market’s immediate health.

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