Semiconductor Stocks Are Climbing

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In his Daily Market Notes report to investors , while commenting on semiconductor stocks, Louis Navellier wrote:

Finally an across-the-board rally.

Stock futures surged overnight, with the S&P rising from Monday's close of 4,008 to 4,086 and only giving back a little before the market opened as Shanghai announces“zero Covid” . The VIX has been dropping since Friday morning from 34 and is now below 27 which lends support from options trading. This strength is despite rising oil prices with WTI now north of $112/bbl and natural gas well above $8/mcf.

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Q1 2022 hedge fund letters, conferences and more

Interest rates are higher across the yield curve with the U.S. 10-year up 7bps to 2.95% and the 2yr up 9bps to 2.66%. The U.S. dollar finally cooled off a bit. Crypto is up modestly as is gold.

• 1. Rising Semiconductor Stocks
• 2. Bargain Shopping
• 3. Retracement On Strength
• 4. Coffee Beans

Semiconductor stocks are climbing with Advanced Micro Devices, Inc. (NASDAQ:AMD) +3% on an upgrade from Piper, Nvidia (NASDAQ:NVDA) +3%, Qualcomm (NASDAQ:QCOM) +2% as is Micron (NASDAQ:MU).

U.S. retail sales for April came in as expected at +0.9% easing fears of a consumer pullback . Walmart (NYSE:WMT) announced premarket with a miss on the bottom line and a guide down on full-year profitability due to cost issues. The shares are down 6%. Home Depot (NYSE:HD) beat top and bottom and reaffirmed guidance and the shares are up 4%.

Warren Buffet continues to influence , revealing a $3 billion position in Citigroup (NYSE:C) with the shares rising nearly 5% on the news. Likewise, Berkshire revealed a $2.6B position in Paramount Global (NASDAQ:PARA) with the shares jumping 10%. United Airlines (NASDAQ:UAL) guided to higher 2nd quarter demand, creating a rally in multiple travel stocks.

This afternoon, Jerome Powell will speak on the Fed 's plans to address inflation at a WSJ conference which will be listened to closely. Overall, the market is bargain shopping beaten down names, as an actual recession still seems unlikely in 2022 while at the same time sentiment remains quite bearish after so many down weeks in a row.

The weakness in China still threatens 2nd quarter results for many companies while at the same time the eventual reopening from their Covid lockdowns promises a rebound in global logistics issues and demand .

Inflation and the Fed's efforts to subdue it remain the leading concern, but with investors' cash levels high and stagflation fears already well established the market is poised for a meaningful retracement on any signs of strength or a reduction of the current challenges.

It will take a few days in a row of strength to persuade more cautious investors that today is not a bear rally, but the trend has certainly improved in the last 3 days and gives hope to more bullish investors that a bottom may finally be forming.

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Updated on May 17, 2022, 12:56 pm

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