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What you need to know today
Stocks' streak snapped
U.S. stocks fell Friday, with the S&P 500 and Nasdaq Composite snapping their six-day winning streak. Asia-Pacific markets mostly dropped Monday as well, with markets in China, Japan and South Korea trading lower. But Australia's S&P/ASX 200 rose 0.6% to buck the trend.
Blinken in China
U.S. Secretary of State Antony Blinken met Chinese Foreign Minister Qin Gang in Beijing yesterday. Blinken's the highest-level American official to visit China during the Biden administration. His trip was originally scheduled for February, but was postponed after an alleged Chinese spy balloon flew across the U.S.
Dimmer prospects for China
Goldman Sachs cut its growth forecast for China this year from 6% to 5.4%, joining a host of Wall Street banks that have already revised their expectations downwards. China's recent economic data have been disappointing so far, prompting the country to cut rates and stimulate the economy.
Tesla's self-driving ambitions
Elon Musk said the value of Tesla depends on whether it can crack the code to self-driving vehicles. In other words, Musk thinks Tesla shares will shoot up once the electric vehicle company perfects autonomous driving technology, which will, in turn, let Tesla owners turn their cars into robotaxis.s the U.S.
[PRO] Bull now, bear later
"Bears like us have been wrong," Bank of America Chief Investment Strategist Michael Hartnett admitted in a note. There are three factors, according to Hartnett, that'll allow stocks to continue their current rally — though he worries it'll be a "big rally before big collapse."
The bottom line
Major U.S. indexes closed lower Friday: The S&P lost 0.37%, the Dow Jones Industrial Average slid 0.32% and the Nasdaq fell 0.68%. Despite that, both the S&P and Nasdaq have hit their highest level since April 2022, a testament to the rally's current strength.
Investors have artificial intelligence to thank for those impressive figures. Microsoft, which integrated AI with its products earlier than most other rivals, hit an all-time high of $342.33 per share on Friday after rising more than 43% this year.
This has echoes of the 1990s, when the tech giant's stock rocketed a ridiculous 9,562% during the decade (!). But that comparison has unwelcome resonances. It was, of course, right before the dot-com bubble burst. By October 2000, Microsoft's shares were worth less than they were in January 1998.
Now, I'm not suggesting the current AI-led rally's as fragile. But there are some worrying signs. As CNBC's Scott Schnipper notes, "It's not a brighter economic picture or an exuberant earnings outlook pushing stocks higher. It's momentum and fear of missing out on further gains."
Still, it looks like the momentum has legs. There's nothing on the horizon that looks like a "bull trap," said Sam Stovall, chief investment strategist at CFRA Research, meaning that markets look poised to rally further, for now.
But some analysts, like BofA's Hartnett and Savita Subramanian, the bank's top quantitative strategist, think the S&P will decline from its current levels at the end of the year. Market bulls might yet trip over and exit, pursued by metaphorical bears.
