The Market Ready For a Quantum Leap?
The Dow Jones Industrial Average fell for a seventh session on Friday, posting its longest run of losses since 2020.
The blue-chip index lost 86.06 points, or 0.2%, to close at 43,828.06. The Nasdaq Composite gained 0.12% to 19,926.72. The S&P 500 ended the session little changed, closing at 6,051.09.
For the week, the Dow posted a 1.8% decline, while the S&P 500 slid about 0.6% and ended a three-week winning streak. The Nasdaq rose 0.3% during the period.
“We’re kind of stuck in this trading range,” Jay Hatfield, CEO at Infrastructure Capital Advisors, told CNBC. “The Nasdaq will outperform, small caps will underperform, [and the] Dow will underperform till we get some catalyst.”
Nvidia fell more than 2%, and Meta Platforms shed more than 1%. Amazon shares were also marginally lower. On the other hand, Broadcom reached a market cap of $1 trillion, rallying more than 24% after posting fiscal fourth-quarter adjusted earnings that beat estimates and reporting that artificial intelligence revenue soared 220% for the year.
The moves come on the heels of a losing session on Wall Street for the three major averages. The Nasdaq Composite also broke below the 20,000 threshold.
Equities ‘remain constructive’ heading into year-end, Piper Sandler says
Stocks may be due for more upside in the coming weeks, according to Piper Sandler.
“As we approach mid-December, the equity markets remain constructive within their primary uptrends into year-end,” said chief market technician Craig Johnson, who has a year-end S&P 500 target of 6,100. His year-end 2025 target for the broad market index is 6,600.
“Alternating tactical rotations between large caps and SMID caps appears to be a developing short-term theme within the context of the broadening process,” he continued. “Use ‘healthy’ pullbacks that confirm support to add to positions.”
Dollar strengthens against yen
The dollar advanced 0.7% against the yen to trade at 153.73 on Friday. Week to date, the greenback strengthened 0.7% versus the yen.
Meanwhile, the euro rose 0.3% against the dollar on Friday and was last at 1.05. However, the euro is also weaker against the dollar for the week by 0.7%.
The South Korean won also depreciated 0.4% compared to the dollar ahead of the country’s second impeachment vote against President Yoon Suk Yeol on Saturday. The dollar was last trading at 1,435.80. Month to date, the greenback has climbed 2.9% against the won.
It was another wild week in markets and I am going to go fast and share a lot of charts and wisdom here so pay attention.
Not surprisingly, we are ending the year with more concentration risk as a handful of stocks are garnering all the attention led by Tesla (TSLA) which roared to another all-time high on Friday, capping off a huge week for the stock and CEO Elon Musk and Broadcom (AVGO) which soared more than 24% and reached $1 trillion market cap Friday as the chipmaker touted its “massive” opportunity in the artificial intelligence market during a quarterly earnings call the prior evening:
Note the parabolic moves going into year-end and remember this kids, when portfolio managers are closing their year and under-performing their benchmark, everyone rushes to buy this year's winners no matter how high they've gone up.
Forget Elon's dance with Trump, that's all nonsense, the real reason hedge funds jammed Tesla up is because they knew it's widely shorted and squeezed the shorts hard to end their year on a positive note.
Broadcom was breaking out before the big "AI announcement" yesterday after the close and it had bad earnings last time so they pumped it up this time to make sure short sellers got whacked hard.
You can't make this stuff up, concentration risk is enormous but if you were able to trade Mag 7 stocks well this year, you're making a killing.
And it's not only Tesla and Broadcom, Google broke out this week to an all-time high:
Last week, it was Amazon rallying to new highs.
Nvidia is having a bad month but they'll probably jam that stock that up before year-end, we shall see.
But while all the attention was on large-cap tech shares once again, beneath the surface was a ton of speculation in some small-cap stocks.
Check out the action in these quantum computing stocks this week, most of them were penny stocks a month ago:
The volume is impressive, big funds are pumping these stocks up and there's a lot of volatility to capitalize on so good traders can make a killing trading them (I traded RGTI a couple of times this week).
What else? Biotech Land, my favourite, there were some crazy wild moves this week:
When I tell you I've been trading biotech for years and it's by far the most corrupt, most manipulated sector in the stock market, these three were perfect case studies this week.
First, on Thursday, Aptevo Therapeutics (APVO) announced 100% of patients achieved remission* within 30 days, in Cohort 1 of the RAINIER frontline acute myeloid leukemia (AML) Phase 1b trial, including two patients who experienced complete remission.
The stock soared to a high of $14.90 and then in the afternoon before the end of day, the company announced an exercise of warrants to net approximately $6.2 million.
It was criminal, I was waiting for it after the bell but when I saw the stock drop fast, I knew hedge funds pumped it in the morning and shorted the hell out of it in the afternoon.
And I wouldn't be surprised if they were tipped off before the announcement, hedge funds are routinely pumping and dumping biotech stocks with impunity. That's why they get the big fees, they have insider information and use it to their advantage and retail sheep get slaughtered.
Next, shares of Candel Therapeutics (CADL) surged 68.1% on Wednesday after the company reported phase III results showing superior efficacy of CAN-2409, an investigational adenovirus immunotherapy candidate, compared to standard of care (SOC) radiation therapy alone in a late-stage study to treat prostate cancer:
The phase III study enrolled intermediate-to-high-risk, localized prostate cancer patients who either received the combination therapy of CAN-2409+prodrug (valacyclovir)+SOC or SOC alone. The study met its primary endpoint, demonstrating statistically significant improvement in disease-free survival (DFS) in patients receiving the combo therapy compared to SOC alone.
Per Candel, in the United States, over 100,000 men are diagnosed annually with localized prostate cancer, with more than 50,000 receiving radiotherapy. Despite being the second leading cause of cancer death among men, there has been no major advancement in treatment for localized, non-metastatic cases in over 20 years. The addressable market for CAN-2409 in this area is valued at over $10 billion, representing a significant opportunity for Candel.
Fantastic news! The stock actually opened up 170% as euphoria set in (hedge funds pumped it in after hours market).
Immediately everyone was comparing this to Janux Therapeutics (JANX) which has soared this year after it recently reported great Phase I results for its prostate cancer treatment:
The problem? Janux has $658 million in cash whereas Candel only has $21 million so you knew a big offering was coming and to my surprise they waited till after the close on Thursday to announce it and the stock got hammered today.
When it comes to biotechs, cash balance matters, it gives them a run time to carry out their studies and those with little cash either partner up with someone bigger or keep issuing offerings (at lower prices) to raise more cash.
That brings me to my third case study this week, Keros Therapeutics (KROS). The stock plummeted 73% on Thursday after the company said it stopped giving higher doses in a lung disease study after some patients experienced unexpected side effects.
This was a huge move down and it caught my attention because it is owned by top institutional investors:
Then you read the stock boards and it was all misinformation, most likely spread by hedge funds, about how the trial was halted but it wasn't halted, nobody bothered reading the details:
The company is testing a drug called cibotercept in patients with pulmonary arterial hypertension, or PAH, a condition in which high blood pressure occurs in the lungs. But, in some patients, the higher doses caused excess fluid to build up in the sac around the heart, known as pericardial effusion.
Keros voluntarily stopped giving the 3 milligram and 4.5 milligram per kilogram doses of its drug, but is continuing to test the 1.5 milligram dose.
Now, I have no clue what will happen with this trial and maybe the smaller dose will prove effective with no adverse reactions, but I can tell you this biotech has a great pipeline and more than $531 million in cash and it's trading near cash levels after that huge dip.
So get ready for February 15th when 13F become public because I want to see who dumped it and who scooped it up this week.
You should keep your eye on all these biotechs and many, many more that got hurt badly this month as big hedge funds shorted the hell out of them.
Alright, I can go on and on but nobody really reads my market comments, and nobody would ever understand how it feels trading these stocks unless they ever traded them for a living.
All I know is the market feels bubbly, very bubbly, and Jerome Powell and company might pour some cold water on it this week when the Fed meets (probably won't as they don't want a repeat of 2018 when all hell broke loose at Christmas).
Below, on Wednesday, Tom Lee, Fundstrat Global Advisors managing partner and head of research, joined CNBC's 'Closing Bell' to discuss his playbook for 2025, why he thinks DOGE could potentially hurt the economy, and more.
Also on Wednesday, Ed Yardeni, president of Yardeni Research, joined CNBC's 'Closing Bell' to discuss whether sentiment for 2025 is too bullish, why he thinks stocks could slide to start the year, and more.
Third, today, Shannon Saccocia, NB Private Wealth CIO; Courtney Garcia, Payne Capital Management senior wealth advisor; and Jordan Jackson, JPMorgan Asset Management global market strategist, join CNBC's 'Closing Bell' to discuss market outlooks.
Fourth, Morgan Stanley Chief US Equity Strategist Mike Wilson talks about his outlook for stocks in 2025. He says there could be a correction next year and volatility will pick up in the first part of next year, then clear. He still sees the S&P 500 hitting 6,500 by the end of 2025. He's on "Bloomberg Open Interest." (great interview)
Fifth, Pershing Square Capital Management CEO Bill Ackman joins 'Squawk on the Street' to discuss President-elect Trump's appearance at the New York Stock Exchange, what to look forward to in the incoming Trump administration, top administration priorities, state of the economy, economic and market outlook, and more.
Lastly, President-elect Donald Trump speaks to CNBC's Jim Cramer at the New York Stock Exchange.
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