The Monday Charge: December 11, 2023

AI stock picks for the week (Large Cap S&P 500)

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(Based on a three month forward looking window)

The biggest movers last week on price and volume (Large Cap S&P 500)

Price and volume moves last week for every stock and sector (Large Cap S&P 500)

A technical analysis across indices

S&P500

Nasdaq

Russell 2000

Across the S&P 500, Nasdaq, and Russell 2000 indices, we see a divergence in performance over the past few months. The S&P 500 current price being 0% below its 52-week high suggests that it may be at a resistance level, which could indicate potential for a pullback if the market doesn't push higher. Money flow indicators and MACD (Moving Average Convergence Divergence) being bullish suggest that despite the recent downtrend, there is buying pressure that could provide support to the index.

The Nasdaq's price currently being 41% above its 52-week low and at its 52-week high suggests a strong rebound and a potential resistance level as well. Money flow indicators and a bullish MACD reinforce the idea of accumulation and upward momentum, although the recent decline may cause some concern for short-term investors.

The Russell 2000 Small Cap index presents a 10.29% increase over the last month, although this is tempered by a slight -1.83% decrease over the last three months. This indicates that small-cap stocks may have been gaining momentum recently, possibly driven by market rotation or a change in investor sentiment favoring smaller companies. The index is currently 14% above its 52-week low and 6% below its 52-week high, which shows room for growth before reaching potential resistance. Similar to the other indices, money flow indicators and a bullish MACD suggest buying pressure, but the recent overbought condition according to RSI could signal a short-term pullback before continuing any upward trend.

Overall, the Russell 2000 presents the strongest short-term technical performance, while the S&P 500 and Nasdaq show more mixed signals, with recent declines possibly tempering the bullish indicators. Investors may wish to monitor these indices closely for signs of continued momentum or potential reversals.

Last week vs. history (Large Cap S&P 500)

Market Commentary

Tech Titans Grapple with Regulatory Headwinds: A Market Analysis

As the sun rises over Wall Street, the financial landscape is abuzz with the latest developments surrounding some of the largest players in the tech industry. Regulatory challenges have become a recurring theme, casting a shadow of uncertainty over the market performance of these behemoths.

In recent news, Amazon has found itself in the crosshairs of the Federal Trade Commission (FTC). The e-commerce giant is pushing back against a lawsuit that accuses it of engaging in anti-competitive practices. Amazon's legal team has called for the case's dismissal, claiming a lack of evidence for consumer harm. While the outcome remains uncertain, investors are treading cautiously, as an unfavorable ruling could set a precedent for increased regulation, potentially stifling Amazon's growth prospects and affecting its stock valuation.

Meanwhile, Alphabet Inc.'s Google is navigating through its own set of regulatory hurdles. With antitrust scrutiny intensifying globally, Google's dominance in search and advertising is under the microscope. Fears of potential break-up or punitive measures have left investors skittish, contributing to volatility in Alphabet's stock price. The tech titan's long-term growth trajectory could be impacted by the outcome of these investigations, making it a critical watchpoint for market participants.

Apple Inc., another member of the tech elite, is contending with legal battles over its App Store policies. The company's stringent control over app distribution and in-app purchases has attracted criticism and legal action, alleging monopolistic behavior. As Apple defends its ecosystem, the investment community remains on edge, pondering the ramifications of possible changes to the App Store's revenue model. Any significant alteration could disrupt Apple's services segment, a key growth driver, thus potentially affecting its stock performance.

Social media powerhouse Facebook, part of Meta Platforms Inc., is not immune to the regulatory storm either. With ongoing concerns about data privacy, content moderation, and market power, Facebook faces potential legislative action that could alter its operational landscape. Investors are closely monitoring these developments, as increased regulation could impact user engagement and advertising revenue, the lifeblood of the social network.

Turning to the semiconductor sector, industry titan Intel Corporation is grappling with supply chain disruptions and competitive pressures. While demand for chips remains robust, Intel's ability to navigate the global semiconductor shortage and maintain its market share against rivals like AMD and NVIDIA is critical. The company's stock has reflected the market's mixed sentiment, with any news on supply chain improvements or setbacks likely to sway investor confidence.

Across the Pacific, Chinese tech companies are also under the regulatory microscope, with authorities cracking down on various industry practices. This has sent ripples through global markets, as investors reassess the risk profiles of companies like Alibaba and Tencent. The regulatory tightening in China serves as a reminder of the geopolitical risks inherent in investing in foreign markets, particularly in sectors subject to heavy state oversight.

In conclusion, as the titans of technology navigate through a maze of regulatory challenges, the broader stock market braces for the potential impact. The heightened scrutiny could lead to significant shifts in business models and competitive landscapes, underscoring the importance of regulatory developments in shaping market dynamics. Investors are advised to maintain a keen eye on these unfolding events, as they hold the power to move markets and redefine the future of the tech industry.