LongPort Morning Brief (240621)｜"Triple Witching Day" arrives, US stocks took a slight break yesterday; Jensen Huang sold shares at high levels, NVIDIA dragged down the entire AI sector.
For US stocks, trust Dolphin Research, with insightful and attitude-filled analysis
1. Overnight, US stocks were mixed, with the Dow Jones up 0.77%, the S&P 500 down 0.25%, and the Nasdaq down 0.79%, ending its seven-day winning streak. AMD rose 7.8%, marking its biggest intraday gain since February. Nvidia fell 3.5%. Broadcom dropped 3.8%, ARM declined 7.7%, Qualcomm fell over 5%, TSMC and Lam Research both dropped over 2%, and Micron Technology slid 6%. GameStop gained 3.6%.
Dolphin Research's take: As this Friday marks the "triple witching day"—when stock, index options, and futures contracts expire—the soaring US stock market finally took a breather. News of Jensen Huang cashing out still impacted Nvidia's performance, dragging down the entire AI sector.
Additionally, recent economic data trends warrant attention: With core services CPI cooling while employment/wage data remains robust, the first half of May clearly traded on expectations of a tech rebound amid a soft landing.
If economic data continues to weaken—for instance, retail sales have already softened for two months, and PMIs are deteriorating—especially if consumer data keeps declining, the market's soft-landing narrative could shift toward a mild recession.
2. US May building permits totaled 1.386 million, hitting a new low since January 2023. US May housing starts annualized at 1.277 million, the lowest since June 2020.
Dolphin Research's take: In fact, after the Fed turned hawkish, the US real estate market showed signs of cooling starting in April, with both new and existing home sales weakening sequentially. From May onward, building permits and housing starts also notably cooled. Coupled with weakening US retail sales data for May—marking two consecutive months of decline—the Fed's pivot earlier this year initially reignited inflation, but after reverting to hawkishness in April/May, economic and inflation data continued to decline, proving the Fed's aggressive stance remains effective in curbing inflation.
3. Nvidia CEO Jensen Huang filed to sell 120,000 Nvidia shares worth $16.3 million, bringing his recent total divestment to over $47 million.
Dolphin Research's take: Interestingly, according to Longbridge's Nvidia shareholder data, Jensen Huang was actually increasing his Nvidia holdings as recently as March 25. Then came May's stellar earnings report and the 10-for-1 stock split, sending the stock from $90 to $140—with the split accounting for over half the surge. Just as Nvidia's market cap peaked, news of the CEO's sell-off emerged. High-level insider selling at peak valuations is clearly not bullish.
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