Daily Stock Market Report - July 19, 2024

Top Stock Market News

1. Global Equities Tumble Amid Economic Uncertainties

Global stock markets witnessed a broad sell-off on Wednesday, with Asian equities and currencies leading the decline. The MSCI Asia Pacific Index was poised for its biggest drop in months, weighed down by concerns over economic growth and geopolitical tensions. The tech-heavy Nasdaq Composite Index in the U.S. plunged 2.8%, dragged down by a sell-off in semiconductor stocks.

2. Dow Jones Industrial Average Snaps Six-Session Winning Streak

The Dow Jones Industrial Average snapped its six-session winning streak on Thursday, as investors remained cautious ahead of a slew of corporate earnings reports. The benchmark index fell, with losses exacerbated by rising Treasury yields, which typically weigh on equity valuations.

3. Regional Bank Earnings Provide Relief

Investors found some solace in the earnings reports from several regional banks, which helped the S&P 500 and Dow Jones Industrial Average eke out gains on Wednesday. The positive earnings reports provided reassurance amid ongoing concerns about the banking sector's health following the recent turmoil.

4. Easing Inflation in the UK Fuels Rate-Cut Optimism

Stocks in the UK received a boost after data showed inflation eased more than expected in June, raising hopes that the Bank of England may soon pause its aggressive rate-hike cycle. The news added to the market's optimism surrounding potential interest-rate cuts by major central banks, including the Federal Reserve.

5. COVID-19 Resurgence Rattles Markets

Stock markets experienced their worst session in months on Thursday, with the Dow Jones Industrial Average tumbling more than 700 points. The sharp sell-off was driven by fears of a resurgent COVID-19 outbreak, which could potentially derail the global economic recovery.

Top Stocks to Watch

1. Nvidia (NVDA)

Nvidia has been a standout performer, leading the artificial intelligence (AI) boom on Wall Street. The chipmaker's shares have soared over the past year, driven by its strength in AI applications. However, a recent sell-off in June raised concerns about the stock's valuation and the potential for an AI chip sell-off.

2. Apple (AAPL)

Apple broke out and closed above a $3 trillion valuation, further solidifying its position as the world's most valuable company. The tech giant's strong performance has been fueled by robust demand for its products and services, as well as its continued innovation in the AI and AR/VR spaces.

3. D.R. Horton (DHI)

D.R. Horton, one of the largest homebuilders in the United States, has operations in 118 markets across 33 states. The company's diverse geographic presence and product offerings, including single-family detached homes and attached homes like town homes and condominiums, make it a stock to watch in the housing sector.

4. Manchester United (MANU)

Manchester United, the iconic English football club, has been added to the Zacks Rank #5 (Strong Sell) List. The club's on-field performance and financial results have been closely scrutinized by investors, making it a stock to keep an eye on in the sports and entertainment sector.

5. Digital World Acquisition Corp. (DWAC)

Digital World Acquisition Corp., the blank-check company that plans to merge with former President Donald Trump's social media platform Truth Social, has been dubbed the "ultimate Donald Trump stock." With ongoing political developments and the attempted assassination of the former president, DWAC's stock has garnered significant attention from investors.

Stock Market Expected Movement

Based on the current market conditions and the news outlined above, analysts expect volatility to persist in the stock markets. The ongoing economic uncertainties, geopolitical risks, and concerns over a potential resurgence of COVID-19 are likely to continue weighing on investor sentiment.

However, positive earnings reports from regional banks and easing inflation in the UK may provide some support to the markets. Additionally, the anticipation of potential interest-rate cuts by major central banks could fuel further optimism and drive some bargain-hunting in oversold sectors.

Investors are advised to closely monitor the evolving situation surrounding COVID-19, as well as any developments related to trade tensions and geopolitical risks. Defensive sectors, such as healthcare and consumer staples, may outperform in the event of heightened market volatility.

It is also crucial to keep an eye on corporate earnings reports, as they will provide valuable insights into the health of individual companies and their respective industries. Stocks like Nvidia, Apple, and D.R. Horton are expected to remain in the spotlight, given their strong performance and potential for further growth.

Overall, investors should exercise caution and adopt a diversified approach to mitigate risks in the current market environment.