February 26, 2024

“If life gives you limes, make margaritas.”

Jimmy Buffett

As I am out of town last week, I thought I would quote a different Buffett. Here are the numbers:

The S&P 500 finished the week up 1.7% (5,088.88), the Dow Jones Industrial Average added 1.3% (39,131.53), the Nasdaq brought up the rear but still positive .03% (15,596.82), Internationally the FTSE 100 broke even off a slight .07% and the MSCI-EAFE gained a modest .08%. 2-year treasuries closed Friday with a yield of 4.687% and the 10-year paid 4.248%.

So what happened? As Alex Eule of Barrons writes. It was the week that artificial intelligence arrived…again. Nvidia’s blowout earnings sent investors into a frenzy yesterday, pushing the chip maker to a record high and briefly past the $2 trillion market cap mark. It also put the tech-heavy Nasdaq Composite on the precipice of its first record close since November 2021. Also, Jeff Bezos dumped 4 billion of amazon stock and Jamie Dimon sold 150 million of his JP Morgan stock. Why? Probably because U.S. stocks closed mostly higher Friday, with the Dow Jones Industrial Average and S&P 500 both eking out fresh record highs.  Last Thursday, the S&P 500 posted its biggest daily percentage increase since Jan. 6, while the Nasdaq logged its largest percentage gain since Feb. 2, according to Dow Jones Market Data. Do they know something or is it just prudence to take some incredible gains off the table? Probably that is the reason.

Most of the S&P 500’s 11 sectors rose Friday, with only information technology, communication services, consumer discretionary and energy closing in the red, according to FactSet data.

As Market Watch reports, Looking ahead, the U.S. economic calendar for next week includes an estimate of gross-domestic-product growth in the fourth quarter of 2023, and a reading on inflation in January from the personal-consumption expenditures price index.

So far, “the economy is really not slowing down all that much,” said Russell Price, chief economist at Ameriprise Financial, by phone Friday. “Overall, I think that the economy is doing fine. That’s good for corporate profits.”

The Nasdaq Composite was briefly on track Friday for its first record close in more than two years, but the tech-heavy stock index remained shy of that as investors pondered the staying power of a rally fueled by optimism around artificial intelligence.

The Nasdaq Composite COMP, comprised of most of the stocks that trade on the Nasdaq stock exchange and one of the world’s most closely followed benchmarks, ended down nearly 0.3% Friday at 15,996.82. It had earlier traded as high as 16,134.22 — above its record close of 16,057.44, set on Nov. 19, 2021. The index had also been briefly on track for a record close Thursday before trimming its gain. The Nasdaq Composite’s all-time intraday high was set on Nov. 22, 2021, at 16,212.23 and the record close from Nov. 19, 2021As Market Watch notes.

Through Friday, the Nasdaq has gone 566 trading days without a record close, according to Dow Jones Market Data. That’s the longest such stretch since a run of 3,801 trading days from March 2000 to April 2015, following the bursting of the dot-com bubble.

The other two major U.S. stock indexes — the large-cap benchmark S&P 500 SPX and blue-chip Dow Jones Industrial Average DJIA — both ended at record highs last Thursday and extended their gains on Friday. The Dow has now notched 14 record finishes so far in 2024 through Friday, while the S&P 500 has seen 13.

The superstar keeps performing….

Nvidia Corp. NVDA, +0.36% shares surged more than 16% Thursday after reporting blowout earnings results late Wednesday that exceeded an already high bar for the maker of artificial-intelligence semiconductors. Nvidia shares rose another 2% on Friday. They have rallied nearly 60% so far in 2024 and are up roughly 275% over the last 12 months, contributing to a rally led by a handful of megacap technology stocks seen as likely to benefit most from AI advances.

A close in record territory would largely put to rest any lingering doubts about the return of a bull market for the Nasdaq Composite.

I will be back this week so as we close the month of February things looked good,

Mike