Stock market today: S&P 500 extends daily winning streak

VaselineAugust 19, 2024

0 3 minutes read

Stock market today: S&P 500 extends daily winning streak

Stocks ended Monday on a positive note, with all three major indexes building on last week’s impressive gains. Market participants are optimistic that this week’s flurry of Federal Reserve speakers — including Fed Chairman Jerome Powell — will provide clues about when the central bank will start tapering. interest rates and how much

Indeed, investors will be watching the Federal Reserve closely, with several central bank officials scheduled to speak. Most notable is Powell, who will take the microphone Friday during the Jackson Hole Economic Symposium.

Appearances by Fed officials in Jackson Hole have been known to cause volatility in the stock market. In 2022, for example, stocks fell dramatically after Powell warned that higher interest rates would create “pain” for households and businesses.

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This time, he is expected to stick to his script from July Fed meeting. However, an “evolution in July FOMC language would suggest the committee is ‘very close’ or ‘close’ to the point where easing is likely to occur,” it says Michael Gapenhead of US economics at BofA Global Research.

“A more convenient signal might be a statement that the committee wants to avoid ‘unexpected weakness’ in the labor market (especially following July jobs report), rather than simply responding to it as it occurs,” adds Gapen.

AMD buys ZT Systems for $5 billion to expand AI capabilities

In single-stock news, Advanced microdevices (AMD) rose 4.5% after the chip maker said it was buying cloud-computing infrastructure firm ZT Systems in a cash and stock deal valued at $4.9 billion.

“Our acquisition of ZT Systems is the next major step in our long-term artificial intelligence (AI) strategy to provide training and leadership inference solutions that can be rapidly deployed at scale across cloud and enterprise customers,” said Advanced Micro Devices CEO Lisa Su. in the press release.

Additionally, AMD’s acquisition of ZT Systems allows it to challenge Nvidia’s (NVDA, +4.4%) dominance of the AI data center chip market “by improving their ability to accelerate adoption to compete directly with popular processing units graphics (GPU) of Nvidia”. say Mark Perezinvestment director at Linqto. “This acquisition better equips AMD to compete with Nvidia’s integrated approach, potentially offering a similar end-to-end solution and capturing a larger share of the AI infrastructure market.”

Perez adds that M&A activity in the AI space is just starting to heat up, as many venture-backed AI firms have been funded at unsustainable valuations.

GM stock rises after latest round of layoffs

General Motors (GM) rose 1.0% after said CNBC the automaker is cutting 1,000 jobs in its software and services unit. The layoffs come as GM “prioritizes investments that will have the greatest impact,” according to the report.

The news follows headlines last week that GM is cutting staff in China and may meet with SAIC Motor, its joint venture partner, to discuss reducing production capacity.

Argus Research Analyst Bill Selesky (Buy) says General Motors’ efforts to promote “capital spending discipline, a recalibrated product strategy and an enhanced cost-cutting program” are “impressive as they demonstrate that GM’s management team is both financially flexible and focused long term strategy. ”

McDonald’s posts new price target

McDonald’s (MCD) was another big gainer, climbing 3.3% to become the best Dow Jones stocks today. The Blue Chip increase was an upbeat note from Evercore ISI, which said it was growing “increasingly bullish” on MCD’s domestic business over the next year or so.

Evercore analysts maintained an Outperform rating (the equivalent of a Buy) on McDonald’s and raised their price target to $320 from $300, representing an implied upside of 11% from current levels.

As for the main indices, the Nasdaq Composite rose 1.4% to 17,876 and S&P 500 was 1.0% higher at 5,608. It was the eighth consecutive win for both indexes, the longest daily winning streak in December for the Nasdaq and the longest for the S&P 500 since November.

The Dow Jones Industrial Average gained 0.6% to 40,896, marking its fifth straight gain.

VaselineAugust 19, 2024

0 3 minutes read

Vaseline

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