daytrading

Nvidia Corp. is set to report earnings on Wednesday, and investors are eagerly watching for signs of momentum. The stock has been mostly flat since June, despite bouts of volatility. Will this report be the catalyst for a breakout, or will lingering concerns keep investors on edge? Bullish Sentiment: A Rally Waiting to Happen? Mizuho analyst Jordan Klein sees a potential surge ahead, noting that “a lot of money on the sidelines” could rush in if Nvidia (NVDA -3.09%) delivers strong results. He expects the stock to move “higher before lower” following its recent stagnation. A key reason for his optimism? Demand for Nvidia’s new Blackwell lineup is significantly outpacing supply. With production ramping up in the second half of the year, Klein believes Nvidia is well-positioned for continued growth. Concerns Loom: DeepSeek and Microsoft Uncertainty Despite the bullish outlook, some investors remain cautious. One source of concern is Chinese AI firm DeepSeek, which has sparked debate over whether future AI development will require less hardware—potentially impacting Nvidia’s long-term dominance. Another worry stems from Microsoft (MSFT -1.03%), which reportedly canceled some data-center leases. While this has added to market jitters, Mizuho’s Vikram Malhotra suggests it may simply be a “course correction” rather than a sign of reduced AI infrastructure investment. Skepticism Persists: No Immediate Catalyst? Stifel analyst Ruben Roy believes Nvidia’s earnings may not be the game-changer some investors hope for. With market uncertainty still lingering post-DeepSeek, he doubts earnings alone will drive a strong upside move. The Bigger AI Picture: A Long-Term Win for Nvidia? Melius Research’s Ben Reitzes takes a broader view, arguing that demand for AI chips is already being validated. Tech giants are in an arms race to dominate AI, and Nvidia stands to benefit from this relentless spending. Reitzes likens Nvidia’s hardware to Ferraris—elite, high-performance chips that companies like Elon Musk’s xAI highly value. Despite the short-term noise, he believes Nvidia will remain the go-to choice as AI workloads continue to grow. Bottom Line: Make-or-Break Moment for Nvidia? With earnings approaching, Nvidia finds itself at a crossroads. Will strong demand fuel a stock rally, or will lingering concerns weigh on investor sentiment? Either way, Nvidia’s role in the AI revolution is far from over. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Interest-Rate Volatility Normalizing, Says J.P. Morgan’s Phil Camporeale Investors are showing less concern about rising interest rates, though key market risks remain. “The biggest risk is inflation making a comeback in the second half of this year,” said Phil Camporeale, portfolio manager for J.P. Morgan Asset Management’s global allocation strategy. He warned that inflation could not only remain persistent but also accelerate due to wage growth or rising prices in sectors like lodging and dining. On Friday, U.S. stocks fell sharply, with the Dow Jones Industrial Average experiencing its worst week since October. Investors analyzed economic data, including a consumer survey indicating heightened inflation expectations driven by tariff concerns. The upcoming week brings fresh inflation data from the Federal Reserve’s preferred measure, the personal-consumption expenditures (PCE) price index. Recently, stock markets have found relief as rate volatility has eased to levels last seen in early 2022—before the Fed’s aggressive rate hikes began. “Nothing worries equity investors more than interest-rate volatility,” Camporeale noted. However, with inflation slowing, prompting the Fed to adjust its monetary policy with rate cuts last year, rate volatility appears to be stabilizing. So far in 2025, the Fed has maintained its benchmark rate, pausing rate cuts in January. “The Fed is on the back burner now,” said Camporeale. “Nobody is calling for immediate action.” Investor focus has shifted from the Fed’s next move to fundamental drivers of the equity markets. Markets seem to accept inflation running slightly above the Fed’s 2% target, but investors remain cautious. The University of Michigan’s latest survey indicated that tariff-related developments have heightened inflation concerns. “Consumers are bracing for a resurgence in inflation,” said Joanne Hsu, director of the survey. “If these concerns persist, they could pose challenges for policymakers.” Investors will closely watch the Fed’s favored PCE gauge, due on February 28. Some analysts believe the Fed may now opt for an extended wait-and-see approach. “Bond-market volatility is no longer the key issue,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. He pointed to the ICE BofAML MOVE Index, a measure of bond-market volatility, which has dropped to its lowest level in three years despite a brief uptick on Friday. Over the past six months, the MOVE Index has declined nearly 18%. Despite last week’s market decline, the S&P 500 remains close to its all-time high from February 19, closing Friday at 6,013.13—just 2.1% below its record. The current bull market has broadened beyond technology stocks, with financials playing a key role. While the S&P 500’s technology sector has dipped 0.3% year-to-date, financials have gained 4.8%, according to FactSet data. Investors will also watch Nvidia’s quarterly earnings report on February 26. “It’s a significant shift from a market dominated by tech to one where financials and other sectors are driving gains,” said Samana. Equity Risk Premium at Historic Lows The U.S. stock market’s equity risk premium has fallen to multidecade lows, according to a Wells Fargo Investment Institute report. “Stocks aren’t as attractive as they were last year,” said Samana. However, he still sees the S&P 500 as more appealing than bonds, especially with the 10-year Treasury yield hovering around 4.5%. On Friday, the yield on the 10-year Treasury note fell 8 basis points to 4.419%, its lowest level since mid-December. “There’s little incentive to buy a 10-year Treasury when a money-markets fund offers a similar yield without duration risk,” said Camporeale. Camporeale remains overweight on equities, favoring U.S. stocks. He has reduced exposure to core bonds, including Treasurys, in favor of high-yield corporate credit and equities. Following the U.S. presidential election in November, he added value and midcap stocks to his portfolio. Looking ahead, he anticipates “low-double-digit returns” for the S&P 500 this year. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

A team of strategists at Ned Davis Research has been analyzing market trends, and their findings suggest U.S. stocks are pausing for breath after two blockbuster years—much to investors’ frustration. For the past two and a half months, the S&P 500 (SPX) has been stuck in a tight trading range, signaling a period of “consolidation,” according to the Ned Davis team. Despite this, the index has still managed to reach new record highs, most recently on Wednesday, per FactSet data. However, the pace of gains has slowed considerably compared to 2024, while European and Chinese stocks have surged ahead. Given ongoing concerns over tariffs, widespread federal layoffs, and high stock valuations, the market’s resilience has been notable. “So far, markets have largely brushed off the tariff threats and [President Donald] Trump’s geopolitical drama this year,” said Burns McKinney, portfolio manager at NFJ Investments, in an email to MarketWatch on Thursday. Still, investor sentiment is beginning to show signs of strain. Vanguard’s investor confidence metrics recently saw their steepest drop since 2022, according to Andy Reed, head of investor-behavior research at the firm. He noted that concerns over record-high egg prices are overshadowing enthusiasm for the stock market. However, history suggests that indecisive trading periods like this often resolve quickly—typically followed by stronger gains. The Ned Davis team analyzed the S&P 500’s performance since early December, comparing it to past episodes of sideways trading. While historical patterns show some variability, they suggest that choppy trading could persist in the short term before stocks resume their upward momentum. “Whether the past 2.5 months mark a consolidation phase within an ongoing bull market or the start of a downturn depends on factors like inflation and earnings,” said Ed Clissold, chief U.S. strategist at Ned Davis, in a report shared with MarketWatch. “Right now, the data still supports the bull market case—until proven otherwise.” Investors’ concerns were evident in Thursday’s market action, as disappointing earnings guidance from Walmart Inc. (WMT) rattled confidence in consumer strength. The S&P 500, Nasdaq Composite (COMP), and Dow Jones Industrial Average (DJIA) all ended the day lower. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Investors Should Embrace Stocks Record Highs While Staying Vigilant For the first time in nearly four weeks, the S&P 500 reached a new closing high on Tuesday. Investors who have remained on the sidelines may now be wondering: Is it too late to enter the market? After two years of strong gains, it’s natural to question whether to invest now or wait for a potential pullback. As the saying goes, “trees don’t grow to the sky”—markets don’t rise indefinitely without pauses or corrections. New market highs can shape investor sentiment, but history shows they are not unusual. Ryan Detrick, chief market strategist at Carson Group, notes that since 1957, the S&P 500 has reached a new record high roughly every three weeks on average. This doesn’t mean stocks are immune to downturns. While bear markets occur, they have historically been infrequent. Investors who remain on the sidelines often miss out on significant long-term gains. “Should you buy at all-time highs? That’s a frequent question,” Detrick shared on X. “My take: Don’t fear new highs. The S&P 500 has risen a year later 71% of the time after reaching a record, with a median return of 8.3%—essentially normal returns.” Of course, exceptions exist. The S&P 500 hit a record of 4,796.56 on January 3, 2022, before declining 25% in a bear market. It took over two years to surpass that peak. However, such downturns are the exception, not the rule. Historically, stocks trend upward over time, particularly following the recovery from the 2008 financial crisis. Key Risks to Consider Despite market resilience, investors should remain mindful of emerging risks. Several challenges have surfaced at a time when U.S. large-cap valuations are historically high. Additionally, seasonal trends indicate that the first quarter of a new presidential term is often one of the weakest in the four-year cycle, according to Detrick. Potential concerns include: Thus far, investors have largely brushed off these risks, but sentiment can shift quickly. Market Breadth and Leadership While the “Magnificent Seven” megacap tech stocks have struggled in early 2025, other stocks have gained ground, broadening the market rally. This diversification reduces the market’s vulnerability to single-stock declines, such as Nvidia Corp.’s sharp 17% drop in late January, which caused the S&P 500 to fall nearly 1.5%, despite gains in most other index components. The S&P 500’s rise has slowed in 2025, but broader participation suggests a more stable rally. Year to date, the index is up 4.2% as of midday Wednesday. The Invesco S&P 500 Equal Weight ETF (RSP), which better reflects the performance of the average S&P 500 stock, has gained 4%, according to FactSet. Looking Back and Moving Forward Exactly five years ago, on February 19, 2020, the S&P 500 hit a record before the COVID-19 pandemic disrupted global markets. Since then, the index has climbed more than 80%, according to FactSet data. By late summer 2020, it had fully recovered from the pandemic-induced selloff. As of Wednesday’s trading session, the S&P 500 was down 6 points, or 0.1%, at 6,122. The Nasdaq Composite declined 53 points, or 0.3%, to 19,990, while the Dow Jones Industrial Average dropped 144 points, or 0.3%, to 44,413. While new highs may seem concerning, history suggests they are a natural part of market cycles. Investors who take a measured approach and maintain a long-term perspective are often rewarded over time. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Fiscal Stimulus: The Key to Sustaining China’s Market Rebound Chinese stocks are regaining momentum, fueled by a transformative artificial intelligence (AI) breakthrough that could draw up to $200 billion in investor inflows this year. Goldman Sachs strategists, led by Kinger Lau, have raised their target for China’s CSI 300 index from 4,600 to 4,700, signaling a potential 19% price return. Goldman estimates that widespread AI adoption could enhance Chinese earnings per share by 2.5% annually over the next decade. This technological shift, coupled with renewed investor confidence, could elevate the fair value of Chinese equities by 15-20%, triggering substantial capital inflows. Despite this optimism, analysts stress that AI alone cannot sustain long-term growth. Strong fiscal stimulus is essential to address macroeconomic challenges and drive sustainable equity gains. Specifically, China must implement policies to counter tariff-related headwinds, stimulate domestic demand, curb deflationary pressures, and correct economic imbalances—all crucial for bolstering corporate earnings and extending market gains. The CSI 300 rose 14% last year after three years of losses, compared to a 23% gain in the S&P 500. Meanwhile, the Hang Seng Tech Index, home to many of China’s leading AI and tech firms, has surged 23% year-to-date, with an ETF tracking the index up 19% in 2024—the first annual gain in four years. Goldman Sachs identifies strong potential for later-cycle AI beneficiaries, favoring companies in data, cloud computing, software, and applications as AI monetization and practical use cases expand. Their analysis reveals a valuation gap between U.S. and Chinese AI stocks, drawing comparisons between major firms like Apple and Tencent. Since ChatGPT’s launch in late 2022, U.S. stocks have surged 50%, adding $13 trillion in market capitalization. Over the past year, U.S. and global investors have funneled $660 billion into U.S. equities, fueling double-digit gains in the S&P 500 and Nasdaq Composite and generating over $10 trillion in market value. Optimism surrounding DeepSeek is now driving significant inflows into Chinese stocks. If Chinese firms can grow their market cap by $3 trillion in the next year, AI-related investments could contribute up to $200 billion in global net buying, potentially reversing the underweight positioning of Chinese equities among asset managers. However, Goldman Sachs warns of risks to China’s AI-driven growth, including regulatory uncertainties, data privacy concerns, national security considerations, disinflationary pressures, and potential Western tech export restrictions. While these risks are currently overshadowed by AI enthusiasm, they remain crucial factors for investors to monitor moving forward. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com