The S&P 500 and Nasdaq Composite fell from record highs as investors shifted away from Big Tech stocks like Nvidia and Meta Platforms. This decline follows the lowest consumer price index in over three years. The yield on the 10-year Treasury decreased, while US oil prices increased amid hopes of a rate cut. June inflation fell for the first time in over four years, with the consumer price index dipping 0.1% from May, bringing the 12-month rate to 3%, the lowest over three years. This development supports an interest rate cut by the Fed in September.
DELTA
Despite record summer travel demand, Delta Air Lines shares fell 4% after forecasting lower-than-expected third-quarter revenue. Delta posted record second-quarter revenue of $15.41 billion, slightly short of the $15.45 billion consensus estimate. The carrier expects sales to rise no more than 4%, missing analyst estimates of 5.8% growth. This is due to increased costs and expanded capacity, which pressures fares even as passenger numbers surge.
DAL (Daily). 14% gap down from the previous market close, the stock filled an area of demand and supply imbalance. Price confidently soared and gained 2.25 points just overnight. Buying is recommended once the price breaks the bearish projection line around 47.50.
APPLE
Apple’s Vision Pro mixed reality headset is now available in several countries outside the US, including Australia, Canada, France, Germany, and the UK, following its debut in Asian markets like China, Hong Kong, Japan, and Singapore. Bryan Ma from International Data Corporation noted the excitement for Vision Pro due to Apple's advanced implementation but highlighted challenges in sustaining sales because of the high price and evolving application ecosystem. He mentioned Apple might ship about 400,000 units this year, of which half will be outside the US, compared to a total market of 7.3 million units. Future sales could increase if hardware prices drop and application utility improves.
Apple (Daily). After 12 months of trading below $200 per share, the stock finally broke the resistance last month. We expect the price to correct towards $218 per share.
JP MORGAN
Analysts expect JPMorgan to report earnings of $4.18 per share on $42.16 billion in revenue, with key areas of focus being net interest income and future guidance. JPMorgan's strong competitive position and potential earnings growth are driven by higher loan growth and capital markets. Analysts emphasise the importance of JPMorgan's 2024 outlook, particularly for net interest income amid a higher-for-longer rate environment. Shares of JPMorgan have risen 22% in 2024. With an upgrade of the net income interest forecast to $91 billion, we put a price target of $226 on the stock.
JPM (Daily). With the ups and downs in the last 4 months, the stock has formed a rising-wedge pattern signalling a bullish continuation. The price could top around 211.50, wait for a correction to around 198.60 for an ideal buying level.
Fullerton Markets Research Team
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