After the Nasdaq (QQQ) marched higher in yesterday’s morning trade and then slipped by mid-afternoon, markets will focus on economic reports this week. Following today’s inflation report (January’s Consumer Price Index), stock markets will react to the industrial production, retail sales, and consumer sentiment report.
Markets are anticipating what the data-driven Federal Reserve will do next. Despite Fed Chair Jerome Powell denying a 25 bps rate cut in March, megacaps soared.
Active traders will once again watch Nvidia (NVDA), Amazon (AMZN), and Microsoft (MSFT). Demand for artificial intelligence keeps going up. Firms that sell the proverbial “picks and shovels” will benefit the most. However, few investors ask what value AI adds to companies.
AI needs to replace its staff, increase efficiency, and raise customer service levels. Otherwise, companies will cancel AI projects that fail to offer any of those benefits.
The halo around the mega-cap firm’s rise may spread to the rest of the market. The small-cap ETF (IWM) rallied from sub-$190 to around $203 recently. Speculators bought Joby Aviation (JOBY), an electric aircraft supplier, yesterday. Joby won a contract to launch air taxi services in the UAE by early 2026.
Firms that are still underperforming the markets in the aerospace and air services segment include AerSale (ASLE), Virgin Galactic (SPCE), and Boeing (BA).
