Both the S&P 500 (^GSPC) and Nasdaq Composite Index (^IXIC) hit new all-time highs at market close on Monday, getting off to a strong start to an eventful week. The Federal Reserve's (Fed) June FOMC meeting is wrapping up, and the May CPI (Consumer Price Index) will be released on Wednesday, June 12th.
Yahoo Finance market reporter Josh Schafer joins Asking for a Trend to break down the biggest market themes from the trading day, including Apple's (AAPL) “Apple Intelligence” initiative announced at the Worldwide Developers Conference (WWDC).
For more expert insights and the latest market trends, click here to watch the full episode of “Ask the Trends.”
This post Luke Carberry Morgan.
Video Transcript
The S&P 500 Nasdaq index hit a new record as investors focused on key inflation data and the Fed's policy decision.
Of course, we'll go into more detail on the key points of the trading day in more detail.
Let's hear from Josh Schafer of Yahoo Finance.
Yes, Josh, the S&P 500 hit a new high.
But as you said, the big story in the market today was really Apple, so I want to take a broader perspective and think about the stock price reaction to Apple.
That's why stocks fell today.
However, if we take a closer look at Apple's stock price movement, I think we can surmise that this was a buy-the-rumor, sell-the-news type of event.
So, I looked it up here and Josh's two month stock price is up 15% in the last two months.
And so when the word started to spread about what they were doing with AI and their partnership with Open AI, we knew a lot of this in bits and pieces and I think that really translated into the pricing.
And today, I don't know what you think about that.
So far, it's unclear how much new and substantive we've actually learned about the plan.
So it might be natural for the stock to drop a bit after approaching its all-time high again.
Josh, I too am wondering how much of a part this is.
It's going to be really hard for Apple to wow consumers and investors any more.
So the coverage is a lot better, they have reporters and they put together the show in advance.
That's one thing.
So it's hard to get another price and see it soaring towards it.
I mean, you had a good run there.
Well, we're approaching record highs.
So it's not surprising that the stock price can't grow sustainably, right?
These days, I think NVIDIA is probably the only stock that can do that, but in general, that's a tough thing to ask.
WWC Josh, you know, this isn't a typical event where investors think, “This is an event that's going to cause a stock price to skyrocket,” right?
Yeah, that wasn't the iPhone launch, was it?
Or something like that.
And the other thing that I think fits into this is that pleasing investors with AI has become a little bit harder this year.
Here's an interesting chart from Bespoke.
That means looking at stocks with market capitalizations over $1 trillion.
Hint, there are only six.
You can name it now.
That's seven companies excluding Tesla and companies with market capitalizations under $1 trillion.
We're looking at second quarter performance and year to date performance.
What really stands out here is that AI trading isn't inclusive to everyone, right?
NVIDIA and other big names are also participating.
I mentioned earlier that Apple may be benefiting from the AI hype, but it's not the big companies, the C's and A's of the world, that have really soared in the last year, it's some of the smaller companies.
They just aren't participating as much right now.
And I think this speaks to what we're seeing right now in the market as a whole, which is a bias towards large caps, but it also speaks to the current state of AI trading, perhaps a situation like Tre Tire.
Josh, I was curious to hear your thoughts on whether there's any investor scrutiny coming into play after this development.
Now, I like to split the AI market into people who can talk about real use cases with data on monetization, and people who sometimes feel like marketing flows.
Yeah.
no.
When you think about this figure and the companies that are included in it, you think about companies like Microsoft and Meta, right?
AI is said to be contributing to some of Azure's revenue growth and to some extent to Meta's reels.
Small businesses can't do that.
Investor and analyst.
You can start modeling that.
right.
Well, actually, I could sum it up a little better.
Finally, this was released today by the New York Fed.
I thought it was interesting.
It's the first time in nearly three years that consumers have been more confident that stocks will rise in the next 12 months.
Is that overconfidence?
Too positive?
So, looking at other indicators of sentiment completes the final graph.
This is a sell-side indicator from Bank of America, Josh.
The focus here is on the allocations that sell-side analysts are currently recommending for stocks.
It's about 55 here.
If we hit that blue line at 58, that's when Subramanian and her team at Bank of America will say, OK, pump the brakes.
Everybody's a little too bullish right now.
Yeah.
And right now, we're not there yet.
And I think that's interesting because we've been talking a lot about the market hitting record highs and everybody's bullish and everybody's bullish.
But when you look at indicators like this, there is still a bullish trend technically remaining, and I like bullish fish, so I don't know what that is.
Josh, well, that could be inspiring.
I think everyone would agree.
Yes, Joshua Shaver.
Thank you, my friend.
