The closing of US stocks on the occasion of Thanksgiving is a good opportunity to review market performance
The NAS 100 market is currently witnessing continued trading above the 16,000 level and shows positive consolidation with strong support at the 15,500 level. Positive expectations are focused on achieving the 16,344 level as an upward target, with the highest historical level at 16,766.
The technology index rose this year amid expectations that artificial intelligence technology will boost the profits of major technology companies.
Nvidia has been a leader in this trend as it reported higher-than-expected earnings last quarter due to strong demand for chips and data centers as companies embrace artificial intelligence tools to improve efficiency and productivity.
However, Nvidia CEO Geoff Jones warned this week that export controls would slow supplies to China.
With Nvidia’s strong revenues, others will need to offer more incentives to attract investors, and Amazon has noticed a recent increase in the number of major companies using its AWS cloud for AI-related reasons.
Microsoft offers a premium Copilot subscription for $30 per month, and Wedbush analysts have shown strong early interest in the tool.
Economic factors are likely to help stocks as the Fed appears to have ended the cycle of interest rate increases. However, there is still a risk to this outlook if oil rises again due to geopolitical issues. Until the end of the year there is no major obstacle to testing the higher levels.
The Nasdaq index jumped this year thanks to the amazing performance of the group of companies known as the “Magnificent Seven.” However, some large companies such as Tesla and Apple appear to have reached a fair value and this suggests that there is a limit to the expected gains in this context based on five-year estimates. Analysis shows that Microsoft shares trade with a 10% higher price/earnings ratio, and price/sales ratio 20% higher indicating challenges to the upside earnings outlook at the end of the year.
These challenges come in light of the rise in hedge fund congestion to its highest levels in 22 years, according to Goldman Sachs data. According to the report, the general hedge fund maintains 70% of its long portfolio in the top ten, which reflects the presence of great reservation towards the future expectations of stocks, and this includes 735 funds. Hedging a total value of $2.4 trillion in assets, showing a high concentration in major equity positions.