To The Moon

This week concluded with a triumphant note for the stock markets. The S&P 500 index rose by 2.9% in comparison to last week's closing, reaching a victorious streak of nine consecutive weeks. The Nasdaq Composite and Dow Jones Industrial Average also experienced significant upticks, with increases of 3.4% and 3.0%, respectively.

Ninth Straight Day Of Wins For SPY Streak In 20 Years

This week have given investors a good close with ninth straight day of wins for both the $SPDR S&P 500 ETF Trust(SPY)$ and the $Invesco QQQ(QQQ)$.

This is historic as this is the first time in over 20 years that we have had nine straight days of upside in the S&P 500. We will discuss the few key reasons.

1. Talks between US and China - the talks have not actually began but China is starting to listen to US official, this is an indication of improvement in trade relations, as China indicated potential openness to negotiations with the U.S.

2. Strong earnings results from notable companies, with $Microsoft(MSFT)$ surging 11.1% and $Meta Platforms, Inc.(META)$ by 9.1% since last week.

3. The S&P 500 surpassing its 50-day moving average.

4. Favorable economic data, like the 0.7% rise in personal spending and steady PCE Price Indexes, as well as employment growth with 177,000 new nonfarm payroll jobs and a stable unemployment rate of 4.2%.

But we need to be aware of some of the risks that is still present as stocks like Apple (AAPL) declined 1.9% post-earnings, while $Amazon.com(AMZN)$ only slightly rose by 0.5% compared to last Friday. These stocks did not enjoy the ascent.

Ten Out Of Eleven S&P 500 Sectors In The Green

Out of the eleven sectors in the S&P 500, ten recorded gains.

The significant gainer is from Technology which increased by 4.0%, communication services by 4.2%, and industrials saw a 4.3% boost. Energy was the sole sector in the red, declining by 0.7%.

Economic Concerns Continue To Linger Due To Consumer Confidence.

Despite the robust performance, economic concerns lingered. April's Consumer Confidence Index fell to 86.0 from a previous 93.9, primarily affected by the lowest Expectations Index since October 2011. Inflation expectations rose to 7.0%, the highest since November 2022.

Additional economic data included weaker initial jobless claims, a contraction in the ISM Manufacturing Index below 50%, and a concerning Q1 GDP report reflecting a 0.3% decline in real GDP alongside a 3.7% rise in the GDP Price Deflator.

Treasury Yield Up For 10-Year and 20-Year

The yields are coming up with the 10-year is up 2.18% and the 20-year was up 1.54%. This does not really push the Fed to start cutting rates rapidly so we are having a push and pull on yields here.

The reason why this is happening is because foreign countries had been dumping US bonds that pressure has since subsided a little bit. But we are having the labour data on Friday which suggest and might lead Federal Reserve to be a bit more patient on the rate cuts.

All I can say is this is making things combined a very complex trade. Hence, I would think as investors we should remain patient and watch when the 20-year gets up to five percent and the 10-year gets up to four and a half percent, then we could expect a favorable commentary out of the Federal Reserve members and also out of President Trump.

This should provide a relaxed tone on how the situation would be like and Federal Reserve might backs stop the markets or since they have the tools, they could respond pretty quickly in terms of deterioration of the labor market that helps calm down yields.

This would happen when bonds get up, then we might see President Trump starts to relax on his stance on the tariffs overall.

One thing I would recommend is to trade the $iShares 20+ Year Treasury Bond ETF(TLT)$, because at the current price, this looks like a cheap trade, and we could play a small position to see how things develop.

Stocks To Watch

Apple (AAPL) is reportedly collaborating with Anthropic to develop an AI-powered platform aimed at assisting developers in coding tasks. This new software will incorporate Anthropic's Claude Sonnet large language model and is initially intended for internal use at Apple. The move follows Apple's previous attempt with Swift Assist, which faced challenges and was not released to developers. Anthropic has already partnered with Amazon (AMZN, Financial), integrating its AI models into Amazon's ecosystem.

Nvidia (NVDA) is adjusting its AI chip designs to comply with U.S. export restrictions while maintaining availability for Chinese clients, including ByteDance, Alibaba (BABA), and Tencent (TCEHY). This follows the U.S. government's expansion of the list of AI chips requiring approval for sale to China. Nvidia expects to incur a $5.5 billion charge due to these changes, affecting its upcoming financial results.

Chevron (CVX) expressed interest in acquiring Phillips 66's (PSX) stake in their chemicals joint venture, aiming to increase its exposure to petrochemicals. This comes amid pressure from activist investor Elliott Investment Management, which values Phillips 66's stake at approximately $13 billion. Chevron's Q1 earnings narrowly beat estimates, and the company plans to slow its stock buyback pace in Q2.

Summary

If we looked at how things are moving, we need to be patient and see how things would develop with more economic data coming up and also how Federal Reserve are reacting to it.

And the development of President Trump tariffs stance, now that China had returned to the tables for talks, so there might be some negotiation, but we also need to be aware of risks that could turned out from it. What I think I would do now is still hold onto their tech stocks and also looked at bonds as now it is at a cheap discount price, this is to take advantage when bonds start to ascend again.

Appreciate if you could share your thoughts in the comment section whether you think market rally can sustain with uncertainty and hopes both present.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

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