Shares of Nvidia are up 8% so far this week. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Key Takeaways
- Nvidia Continues Its 2023 Run
- Biotech Mergers Propel Sector 4.5% Higher So Far This Year
- CPI Tomorrow
Following two days of big swings in the market, stocks have regained much of what was lost last week. The S&P 500 is down less than half a percent for the year and the Nasdaq Composite has trimmed its losses to 1%. The impetus for this week’s rebound has largely been in a combination of last year’s leadership stocks as well as a flurry of biotech merger news to kick off 2024.
2023 saw an uptick for mergers and acquisitions in the biotech and pharmaceutical space. It appears 2024 is picking up where 2023 left off. On Monday, we learned Novartis is in talks to buy Cytokinetics, the maker of a promising cardiovascular drug. Then yesterday, GSK announced it is purchasing Aiolos Bio for $1.4 billion, deepening its push into respiratory care. The S&P 500 biotech ETF is up just about 4.5% so far this year.
In the tech space, Nvidia is showing no signs of slowing in 2024. Its stock is up 8% this week, after gaining 6% on Monday and an additional 2% on Tuesday. Shares of Amazon have gained 9% since just last Thursday and were up 1.5% Tuesday. Amazon also announced this morning they would be cutting 500 jobs or about 35% of employees in the company’s streaming service, Twitch. Those cuts follow 400 jobs being eliminated in 2023. Google stock was also up 1.5% on Tuesday, putting it 4% higher since Friday. Also, shares of Juniper Networks shot up nearly 22% after Hewlett Packard Enterprise announced it was buying the company for $13 billion or roughly $40 per share.
One company under pressure so far this year has been Boeing. Following a mid-air accident that saw a portion of a plane’s fuselage rip off, the company grounded all of its 737 Max 9 planes operated in the U.S. for inspection. Upon further inspection, additional planes were found to have issues, keeping the planes grounded. Shares of Boeing are down 13% so far this year.
Today could be a big day for crypto products. The SEC is expected to announce a decision on allowing a bitcoin ETF. On Tuesday, the SEC’s account on X, formerly known as Twitter, was hacked and a message was posted that an ETF had been approved. The news sent bitcoin prices higher, trading up to $48,000. Chairman Gary Gensler then had to walk that news back sending bitcoin prices lower. In premarket trading, bitcoin is down around 3%, just below $45,000.
On Capitol Hill, despite lawmakers reaching a deal on 2024 spending, the specifics of how the money will be spent are still in need of ironing out. The government has until January 19th before it will have to partially shut down. With just over a week to go before reaching that deadline, it seems likely Congress will need to pass a continuing resolution (CR) to give itself more time. However, there is some pushback in the House on getting a CR passed, making this something worth watching.
One of the big themes over the last year has been interest rates. Although rates were up some last week, they have been falling pretty steadily since October. That has translated into falling mortgage rates. Mortgage refinancings are up 19% from last week and 30% from last year. I’m interested in what impact this will have on the housing market supply in the near term and if the falling rates will serve as a reason for people to stay in their homes longer. Also, speaking of homes, after the close today, KB Homes will report earnings.
Sticking with the theme of earnings for just a minute, Taiwan Semiconductor is out with a beat on their earnings expectations. However, the company did say December sales were down over 8% and the company provided a mixed outlook for the year. Shares of the stock are relatively flat in premarket.
Looking ahead to today and tomorrow, aside from the anticipated decision on a bitcoin ETF, there isn’t much other news expected. However, tomorrow we will get the most recent Consumer Price Index report which is expected to show an increase of 0.2% month-over-month in December and 3.2% increase year-over-year. Then on Friday, earnings season will begin picking up with companies such as JP Morgan Chase and Blackrock scheduled to report. As always, I would stick with your investing plans and long term objectives.
tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.
