Summary:
The Dow hit its fourth record close in five sessions on Thursday, boosted by strong retail sales and TSMC's positive forecast.
The Dow advanced on Thursday to its fourth record close in the last five sessions on stronger-than-expected monthly retail sales and TSMC's upbeat forecast.
Last week, U.S. bank stocks surged to their highest levels since the collapse of SVB, driven by stronger-than-expected earnings from JPMorgan Chase and Wells Fargo. This has fueled optimism for a potential “soft landing” in the U.S. economy.
Other Wall Street giants, such as Morgan Stanley, Goldman Sachs, and Bank of America, also reported surprisingly strong earnings, helping the Dow and S&P 500 exceed expectations.
Meanwhile, chip stocks continued their upward momentum, with Nvidia maintaining its position as Wall Street’s second most valuable company. However, some market participants are questioning the long-term sustainability of the chip sector's growth.
Tech leaders like Alphabet, Microsoft, Amazon, and Meta have all indicated plans to continue significant investments in AI infrastructure through next year, benefiting AI hardware companies. Unlike AI software, which is typically sold through subscriptions, AI hardware is a one-time purchase. Analysts have cautioned that the AI chip market might be in a bubble, which could burst if Big Tech's spending on AI decreases.
Technical indicators indicate that Dow has further to go with no hurdle in sight. The short-term bias will still be bullish if the index stays above 10 SMA.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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