Nasdaq and Semiconductors Lead Wednesday Rally, Core Inflation Eases to 27 Month Low

MARKETS TODAY July 12th, 2023 (Vica Partners)

Overnight/US Premarket, Asian markets finished mixed, Hong Kong’s Hang Seng +1.08%, Japan’s Nikkei 225 -0.81%, China’s Shanghai Composite -0.78%.

European markets finished broadly higher, London’s FTSE 100 +1.93%, France’s CAC 40 +1.69%, Germany’s DAX +1.54%. S&P futures were trading at +0.6% above fair value.

Today US Markets finished higher, S&P 500 +0.74%, DOW +0.25%, NASDAQ +1.15%. 9 of 11 S&P 500 sectors advancing: Communication Services +1.51% outperforms/ Health Care -0.28% lags. On the upside, NASDAQ leads majors, NYSE Fang+ bounces, S&P Banking ETF ^KRE, Semiconductors, Small Caps, Mega Cap Tech, Gold, Bloomberg Commodity Index. In economic news, Headline and Core inflation was better than analysts expected.

Takeaways

  • Headline core inflation easily beats consensus @27 month low
  • Nasdaq +1.15% leads majors, NYSE Fang+ bounces back +1.74%
  • 9 of 11 S&P 500 sectors advancing: Communication Services +1.51% outperforms/ Health Care -0.28% lags
  • SPDR S&P Banking ETF ^KRE +>2%
  • Semiconductor & Semiconductor Equipment +2.37%
  • Gold, Oil and Bloomberg Commodity Index gain
  • Q2 earnings kick off Friday (topline info below)

Pro Tip:  Stock Price Strength, the Chart below shows the number of stocks on the NYSE at 52-week highs compared to those at 52-week lows.

Sectors/ Commodities/ Treasuries  

Key Indexes (5d, 20d, 50d, 100d, 200d)

S&P Sectors

  • 9 of 11 S&P 500 sectors advancing: Communication Services +1.51%, Utilities +1.47% outperform/ Health Care -0.28% lags.
  • Communications/ Sub Interactive Media & Services +2.30%, Utilities/ Sub Water +2.04%, Other/ Metals & Mining +2.20%, Semiconductor & Semiconductor Equipment +2.37%, Household Durables 2.23%, Automobile Components +1.83%,

Factors

US Treasuries

Q2 ’23 Top Line Earnings Preview   

  • In Q1 ’23: 79% of companies beat analyst estimates by an average of 6.5%
  • Q2 S&P 500 EPS expected to decline <7.2%>/ Fiscal year 2023 EPS flat YoY
  • Expect lower Q1 revenues
  • Call topics: economic uncertainty, aggregate demand, inventories, costs, roi

Notable Earnings Today  

  • +Beat: nothing notable
  • Miss: Aeon ADR (AONNY)

Economic Data

US

  • Consumer price index; period June, act 0.2%, fc 0.3%, prior 0.1%
  • Core CPI; period June, act 0.2%, fc 0.3%. prior 0.4%
  • CPI year over year; act 3.0%, fc 3.1%, prior 4.0%
  • Core CPI year over year; act 4.8%, fc 5.0%, prior 5.3%

Vica Partner Guidance July ‘23: Mega and Large Cap Growth continues to look attractive in early Q3. Highlighting Lithium Miners. Nasdaq 100^NDX 14,500 level is a buying opportunity. Undervaluation of Japanese equities, upside for Chinese Mega Cap Tech. Q3/4 2023/ credit default swap (CDS) will pick-up. We continue to emphasize business *quality and strength of balance sheet for all investments.

* Strong support – NVIDIA (NVDA), Meta Platforms (META), Microsoft (MSFT), Alphabet (GOOG, GOOGL), Amazon (AMZN), Apple (AAPL), Tesla (TSLA), Taiwan Semi (TSM), ASML Holding NV (ASML), Sociedad Quimica y Minera (SQM)

News

Company News/ Other

  • Intel and Nvidia continue to push AI chips in China despite US restrictions –
  • Elon Musk Launches xAI, His New Artificial-Intelligence Company – WSJ
  • Influencer Backlash Is the Latest Threat to Fast-Fashion Giant Shein’s IPO Plans – Bloomberg

Energy/ Materials

  • Big Automakers Grab $1 Billion Deal for Urgently Needed Battery Metals – WSJ
  • NextDecade Will Move Ahead With $18.4 Billion Texas LNG Project – Bloomberg

Central Banks/Inflation/Labor Market

  • Fed’s Neel Kashkari Ponders ‘High-Inflation Stress Test’ for Banks – WSJ
  • S. Takes Third Shot at Shoring Up Money-Market Funds – WSJ

Asia/ China 

  • Intel and Nvidia continue to push AI chips in China despite US restrictions – SCMP
  • China’s tech giants off leash after years-long crackdown, as Beijing primes them to be the economic engine they once were – SCMP

Journal

News

VMSI Edges Up to 25.2, But Market Remains Deep in Risk-Off Territory

What is VMSI? The VICA Market Sentiment Index tracks institutional capital flows, risk posture, and macro volatility weekly. Built for ...
News

Institutional Allocators Aren’t Watching Volatility—They’re Designing Into It

VICA Partners Intelligence | April 2025 A regime transition in capital allocation is underway—and the smartest money is leading the ...
News

VMSI Drops to 22.4 as Risk-Off Accelerates and Volatility Deepens

VMSI Gauge Chart — Displaying Current Sentiment and Risk Level The VMSI gauge indicates a current sentiment score of 22.4, ...