The producer price index (PPI) rose 0.3% in January, beating expectations of 0.1%. The 10-year Treasury yield rose to 4.322%, above the closely watched level of 4.3%. The probability of interest rate cuts in March, May and June has now dropped to 8.5%, 31% and 68% respectively.
Loop Capital raised Nvdia (#NVDA) price target to $1,200. Oppenheimer, Wedbush, and Wells Fargo also raised their NVDA price targets to $850, $800, and $840, respectively. NVDA was up 2% earlier but is now up just 0.93%. Analysts are loving NVDA to a fever pitch, which is a very dangerous sign for NVDA and the stock market. Super Micro (#SMCI) has fallen back from an early morning high of $1,080 to $866 (-13.65%) after Wells Fargo analysts said SMCI’s AI craze is already priced in. Applied Materials ( #AMAT ) surged 9% earlier today on better-than-expected earnings and guidance, and is now back to up 7.87%. TD Cowen and Bank of America raised their target prices on AMAT to $245 and $222 respectively.
All major market indexes have now retreated from their recent highs. With the tech-heavy Nasdaq 100 index already up 40% over the past 12 months, over-hyped NVDA and interest rates are likely to remain elevated for some time, the probability is high for large-cap tech stocks leading a stock market correction in the near term.
Coinbase (#COIN) surged 14.34% after excitement about Bitcoin ETF helped the company return to profitability. Barclays raised its COIN price target to $146 from $110. After surging over $10,000 to $52,213 over the past 12 days, Bitcoin needs to digest recent gains before higher. When it starts rising again, Bitcoin’s next target is an all-time high of $69,000.
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