Technology stocks showcased by Nasdaq.
Peter Cramer | CNBC
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What you need to know today
U.S. inflation in line with expectations
U.S. inflation accelerated in November, climbing to 2.7% from 2.6% in October, while core inflation, which excludes food and energy prices, remained unchanged at 3.3%. Both metrics were in line with forecasts. Despite higher inflation, most traders still expect the Fed to lower its benchmark interest rate later this month, data from the Chicago Mercantile Exchange (CME) showed. Fed Watch Tool The probability of reporting is 95%.
Nasdaq hits new high
Alphabet and Tesla climbed to new highs on Wednesday, joining Amazon and Meta in pushing the Nasdaq above 20,000 for the first time. The market value of the four major technology giants increased by approximately US$416 billion that day. The Nasdaq rose 1.77% to close at 20,034.89 points. The S&P 500 rose 0.82%, but the Dow Jones Industrial Average fell 0.22%.
ETF inflows top $1 trillion
Total inflows into the exchange-traded fund industry top $1 trillion for first time, research firm says ETFGI and investment company association. The fund with the most demand so far this year is the Vanguard S&P 500 ETF (VOO), with about $100 billion. U.S. ETFs currently hold more than $10 trillion in assets. Previously, U.S. ETF inflows hit a record high in 2021, about $920 billion.
OPEC cuts demand forecast again
OPEC has Global oil demand growth forecast for 2024 lowered for fifth consecutive month According to Reuters, this is the largest amount to date. OPEC expects global oil demand to increase by 1.61 million barrels per day, down from last month’s forecast of 1.82 million barrels per day. It also lowered its growth forecast for 2025 to 1.45 million barrels per day from 1.54 million barrels per day. China is part of the latest downgrade, with oil demand expected to rise by 430,000 bpd in 2024, down from a July forecast of 760,000 bpd.
(PRO) Alphabet’s giant leap
On Wednesday, the Nasdaq Composite surpassed the psychologically important 20,000 mark for the first time, thanks in part to Alphabet’s quantum computing breakthrough. Wall Street analysts predict the stock could rise further.
bottom line
Tech investors cheered on Wednesday as four of the seven giant tech stocks closed at record highs, with Amazon, Meta, Tesla and Alphabet adding about $416 billion to their market value on the day.
Tech stocks’ gains came as November’s inflation data came in line with expectations. The data clears the way for the Federal Reserve to cut interest rates, which could boost tech stocks.
However, that enthusiasm may be short-lived given U.S. President-elect Donald Trump’s plans to raise tariffs, which could stoke inflation.
If inflation remains stubborn, the Fed will have to halt its easing cycle, removing one of the key drivers behind the rally in technology stocks.
Tesla shares are up about 71% this year, but it may be an outlier as most of the gains have come from Trump won the election last month.
Tesla CEO Musk has a rapport with the president-elect, contributed to Trump’s campaign and will lead the Trump administration’s government efficiency efforts alongside one-time Republican presidential candidate Vivek Ramaswamy department.
His new role could give Musk power over federal agency budgets and staffing, as well as the ability to push for the elimination of inconvenient regulations.
“The stock is reacting to the Trump rally,” Roth MKM analyst Craig Irwin said last week on CNBC’s “Squawk on the Street.” Irwin raised his price target to $380 from $85. The report states that “Musk’s sincere support for Trump could double Tesla’s enthusiast base and increase the credibility of the demand inflection point.
On Wednesday, Goldman Sachs analysts raised their price targets on Tesla, joining bullish reports from the likes of Morgan Stanley and Bank of America.
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