Nasdaq jumps as Nvidia turns a corner

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• Tuesday, June 25, 2024 at 6:34 AM MST

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  Opening bell: Nasdaq jumps, Dow skids

  U.S. stocks opened mixed on Tuesday as AI chipmaker Nvidia ( NVDA ) staged a tentative comeback after a three-day skid, rising more than 0.2% in early trading.

  The tech-heavy Nasdaq Composite (^IXIC) rose about 0.5%, while the benchmark S&P 500 (^GSPC) rose 0.2%. The Dow Jones Industrial Average (^DJI) remained the only major index in the red, falling about 0.2% after rising more than 200 points to start the week.

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  Tuesday, June 25, 2024 at 6:23 AM MST

  House prices reached a new record in April

  House prices reached a new record in April as the market remained tight. But annual growth slowed from the previous month.

  According to the S&P CoreLogic Case-Shiller, home prices in the 20 largest U.S. metros rose 7.2% over the past 12 months ending in April, down from the previous month’s annual increase of 7.5%. On a monthly basis, house prices in the twenty largest cities rose by 0.4% in April compared to the previous month.

  Low inventories, high mortgage rates and record home prices have put the housing market out of reach for many potential buyers. Bank of America economists believe housing hurdles won’t go away anytime soon.

  “The U.S. housing market is stuck, and we are not convinced it will break loose anytime soon,” Michael Gapen, an economist at Bank of America, wrote in a note to clients on Monday.

  “After a surge in housing activity during the pandemic, it has since retreated and stabilized. We see the forces that have reduced affordability creating a lock-in effect for homeowners and that limited housing activity will persist over our forecast horizon,” the economist added.

  So far, the investment bank believes the pandemic shocks to the housing market have yet to ripple through the market. Bank of America expects home prices to rise about 4.5% this year and 5.0% next year, but then fall again to 0.5% in 2026.

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  Tuesday, June 25, 2024 at 3:40 AM MST

  One major market risk for 2025

  As if you need another money issue to worry about.

  In an exclusive interview with Yahoo Finance’s Jennifer Schonberger late Monday, US Treasury Secretary Janet Yellen reminded investors that Trump’s tax cuts will expire in 2025.

  I can’t think of the last investor I spoke to who expressed concern about expiration and its potential impact on the markets.

  But Yellen did her best to bring this back to attention:

  “The signature policy of the Trump years was the Tax Cut and Jobs Act, and it promised an investment boom that didn’t actually materialize. It gave huge tax breaks to corporations and wealthy individuals. And it resulted in a huge increase in the budget deficit. and have reduced tax revenues below historical norms. And I think that’s responsible for a lot of the problems that we’re facing now with our budget path. And so it would concern me if I left all that in place.

  How markets will react in 2025 if tax cuts are not extended due to deficit concerns is of course completely unknown today. However, it should not be ignored in your investment planning process. Just consider this: no extension of the tax cut would mean the top tax rate would return from 37% to 39.6%.

  That’s real money for real people.

  You can watch Jenn’s full interview with Treasury Secretary Janet Yellen below.

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  Tuesday, June 25, 2024 at 3:22 AM MST

  A useful reminder on Nvidia

  While everyone now seems to be an Nvidia (NVDA) expert and waxing poetic about the stock’s recent abrupt drop, I won’t be going that route this morning.

  Instead, I wanted to present some factual numbers with the help of BTIG’s technical analyst Jonathan Krinsky. They provide some nice context as to why Nvidia stock is taking a brief pause.

  Here’s what Krinsky has to say, as if to remind the masses that stocks don’t rise every day.

  “NVDA recently traded ~100% above its 200-day moving average. Since 1990, the widest spread that a US company has ever traded above its 200-day moving average, while being the largest company, was in March 2000 by Cisco (CSCO ) 80%. In other words, NVDA is in a league of its own. It’s also notable that at its peak last week, NVDA briefly surpassed Microsoft (MSFT) on March 24, 2000 marked the high of both CSCO and the Nasdaq to this day. While we fully acknowledge that the fundamentals are very different this time around, NVDA is up +4,280% over the past five years compared to CSCO’s +4,460% gain over the five years. prior to its peak. Over the past 18 months, NVDA was +827%, which is effectively double CSCO’s 18-month gain in ’00.”