Weekly Commentary - December 17, 2023

Hi everyone,

Weekly Wrap up:

The Stock Market rally is continuing to forge ahead and the momentum gained in early November is not fading away. This has been our assessment since Oct 27 that this rally has legs and could push the Markets to its all-time highs. Well, we are very much there. Take a look at the following:

1. Dow Jones Industrial Average has already hit its all-time high this week,

2. It took just 42 days for the lagging Small Cap Index Russell 2000 to move from a 52 week low to a 52 week high level. Quickest in its history.

3. Both S&P 500 and Nasdaq are close to their all-time high levels and could break out in the remaining days of December. Although, the holidays season could take away some of the pace from trading volumes and rally pace.

4. Overall market breadth is very good. In fact, new highs for stocks in S&P 500 and Nasdaq compared to new lows are at their highest level since the Post-Covid rally.

5. Aggressive industry groups like Semi-Conductors (DJUSSC - Dow Jones US Semiconductors up by +8.07%), Software and overall Financial sector also performed very well during last 1-1/2 half month.

Other contributing factors towards equity market advance were :

1) Fed's indication for several interest rate cuts in 2024 which pushed the 10 Year Treasury Bond yield below 4% to its lowest levels since July, and 2) a weakening US dollar against other major international currencies.

Nasdaq Composite Index rose by +2.85% for the week while S&P 500 was up by +2.61% during the week. The Tech heavy Nasdaq-100 was up by +3.36% last week indicating that there is a still a lot of focus on Tech stocks including the AI related stocks. Retail Stocks (departmental stores) and Solar stocks (which have been beaten badly during last 52 week) have added fuel to Stock market rally this week with Solar Industry group up by 18% and Departmental store group up by 14%.

Performance of recently mentioned stocks:

Performance of some of the stocks mentioned during our recent commentaries is as follows:

Stock 5 Days Perf 1 Month Perf

MSFT 1.31% 5.08%

NVO 0.92% -0.69%

NVDA 1.12% 0.01%

TW -2.34% -3.23%

TNK 7.56% -1.32%

META 0.53% 0.66%

GE 1.55% 6.03%

ROST 0.48% 8.32%

COST 4.45% 10.40%

REVG 13.46% 17.55%

DT 0.91% 7.18%

NET 9.71% 20.11%

CVX -0.39% 3.68%

As shown in the above table, almost all the stocks mentioned during last 4-5 weeks have performed very well with the exception of energy sector. Chevron, even after recent sell-off has shown a 3.68% gain during the last one month and remains our long-term cash generating favorite because of its high yield (+4.2%) as well.

AAPL:

Apple set a new all-time high last week. Investors are continuing to trust the most valued company in the world and further pushing its limits high. It is still in actionable range.

NVDA:

In a consolidation stage, Nvidia's new competitor in AI market is AMD which has been recently favored by Market and scored a +7.94% gain last week.

MSFT:

Microsoft is consolidating and is expected to continue its ride on AI front. It is challenging Apple as the most valuable company and remains a favorite among many top mutual fund managers. Still in the actionable range.

REVG:

Mentioned last week, REVG group recorded an impressive 13.46% rise after its earnings announcement. REV Group Inc is engaged in designing, manufacturing, and distributing specialty vehicles and related aftermarket parts and services.

NET:

Highlighted in our last week commentary, Cloudflare is another winner with a 9.71% gain.

Actionable Stocks:

AMZN:

The bellwether stock has shown an impressive performance over last 1 year (70%) but still there seems to be a lot of room to recover after its steep decline in 2022. The month of January specially has a good months going over last 15 years of performance.

DDOG:

After its recent rise, the stock still seems to be actionable at current prices. This firm offers monitoring and analytics platform for developers, IT operations teams and business users in the cloud age.

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Happy Trading and best regards,

Disclaimer:

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