Trump rally incident: How will markets react?

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[Weekly Syrup] Tesla soaring party lasted well. Well, Trump is the guy now?

Moomoo CA joined discussion · Yesterday 18:37

[Weekly Syrup] Tesla soaring party lasted well. Well, Trump is the guy now?

Failed Trump's assassination attempt, but market success for some?

Financial markets surged as trading resumed following the attempted assassination of Donald Trump, with investors betting on a Trump comeback to boost tax cuts, higher tariffs, and looser regulations.

As a result, Treasuries fell, the dollar edged higher, bitcoin surpassed $60,000, and S&P 500 futures for September climbed 0.2%. It's also very eye-catching to see $Trump Media & Technology(DJT.US)$ once surged over 60% in today's pre-market trading.

Mark McCormick from Toronto Dominion Bank remarked that

The news solidified Trump as the frontrunner, reinforcing their bullish stance on the US dollar through early 2025.

However, with four months remaining in the US election campaign, unexpected developments could still sway market sentiment. Political violence may drive investors towards safer assets, increasing volatility.

For more reading on this issue, click here to read>>

Also, you can check here or the picture for Trump-related stock opportunities

But before other recaps, let's look at something different:

What's Moo'ed?

"What's Moo'ed" is a space that captures fun, newsworthy, jaw-dropping and sometimes confusing (lmao) news clips for mooers so that you know this is a colorful world (or a weird and speechless one).

1) Where'd you go? I miss you so

The US Secret Service failed in their primary duty to protect presidents when an assassination attempt on Donald Trump occurred on Saturday, the first such incident in 43 years since Ronald Reagan was shot. The cause is easy: they hired too many honest people, who are absolutely bad at keeping secrets.

2) Wash-up, B?

A La-Z-Boy recliner, an exercise bike, a felon’s ankle monitor and an uneaten broccoli are among the bizarre things washing up on Long Beach in New York. The little mermaid is surely undergoing some turmoil in her home. And we better remind Nemo not to throw away unfinished food

3) Now soberness is a crime?

The LCBO has reversed its plan to open select stores on Friday as retail workers continue to strike across the province. Actually, they don't need to worry. They just need to allow workers to drink some during working hours. Kill two birds with one stone!

Okay, let's dive back to the syrup:

Tesla's Impressive Surge and Cathie Wood's Confidence

$Tesla(TSLA.US)$ has skyrocketed 44% over the past trading days, marking its longest winning streak since last June. This surge has boosted Tesla's weight in Cathie Wood's ARK Innovation ETF (ARKK) to an all-time high, now representing about 15.4% of the fund.

Despite trimming its Tesla holdings, ARKK's investment in Tesla has reached its highest level in the fund's 10-year history. Wood has set a long-term target price for Tesla at $2,600 by 2029, with a bullish scenario projecting $3,100.

Analysts Split on Tesla's Future

Gary Black from The Future Fund suggests that analysts might need to revise their earnings estimates and price targets after Tesla's Q2 earnings report. He expects better-than-anticipated auto gross margins and adjusted EPS. However,

Gordon Johnson from GLJ Research remains bearish, citing declining margins and slower car sales growth. He predicts Tesla's stock could fall below $30 per share.

As Tesla's Q2 financial report approaches, opinions on its future trend remain divided.

Market Drop on July 11: Tech Stocks Hit Hard

On July 11, the S&P 500 Index fell by 0.88% and the Nasdaq Composite Index dropped by 1.95%. Major tech stocks, collectively known as the "Magnificent 7," faced intense selling pressure, losing a combined $598.8 billion in market value. $Tesla(TSLA.US)$ led the declines, plunging 8.44% and ending an 11-day winning streak. $NVIDIA(NVDA.US)$ dropped over 5.5%, $Meta Platforms(META.US)$ fell more than 4.1%, $Alphabet-A(GOOGL.US)$ slipped 2.9%, Microsoft decreased by 2.5%, and $Amazon(AMZN.US)$ and $Apple(AAPL.US)$ each declined more than 2.3%. In contrast, the Dow Jones Industrial Average managed to close slightly higher.

Macro Factors: Capital Shift to Small-Cap Stocks

The market downturn was influenced by expectations of upcoming rate cuts, fueled by a drop in the US CPI data in June, which eased inflation concerns. This environment of lower interest rates benefits the capital market, prompting investors to shift from large-cap tech stocks to undervalued small-cap stocks.

As a result, the Russell 2000 Index, composed of small-cap stocks, saw a 3.6% gain, marking its best single-day performance since November 2023. Investors are increasingly looking for hidden gems in the small-cap market, attracted by their low valuations and high potential for returns.

Micro Factors: Tesla's Stock Decline

Tesla's 8.44% drop was partly due to its decision to delay the release of its driverless Robotaxi from August to October, giving the team more time to build prototypes. This postponement benefited competitors Uber and Lyft, whose stocks rose by 5.3% and 7.9%, respectively.

Tesla's Robotaxi project has faced delays since 2015, with no tangible results despite Elon Musk's promises. Meanwhile, Baidu's driverless taxi project "Carrot Run" gained traction, and Alphabet's Waymo and GM's Cruise continue to advance in the autonomous vehicle space.

Investment Considerations: Magnificent 7

Is it still worth investing in the Magnificent 7? Buying the dip can be a good strategy, but given the volatile macroeconomic conditions and company-specific news, investors should combine technical and qualitative analysis. Factors to consider include quarterly and annual earnings, new products, supply and demand dynamics, leadership quality, institutional ownership, and overall market direction.

What do you think of the Trump's incident, Tesla's rising myth and Nasdaq and Mag 7 drop? And what's your take on other hot issues in the past week? How they can earn you more money(we pray that for you)?

Share your stories, ideas, feelings and emojis in the comments below:

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Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more

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mr_cashcow : Love and enjoyed the weekly syrup, especially all the memes all on point and very funny! Keep on keeping up the good work!

The magnificent 7 isn't gonna be going anywhere else so I personally think they are a good investments but as per usual please DYODD/research

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Meme_Short_Queen : too long of a rally for mag 7, no way is this sustainable as the sector rotation underway, major crash in sight, buckle up.

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BelleWeather : The Mag7 are certainly worthy investments. Among the considerations mentioned, only current valuations against earnings expectations are a concern in the short term. I personally won’t sell shares, though am closing most options contracts. I intend to stash cash and stack shares in the coming months to take advantage in f rising volatility.

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