S&P 500 closes slightly lower on Monday after touching highest level since August: Live updates – CNBC

It may be time to pare stock exposure after the market’s recent rally.

Data compiled by Bespoke Investment Group showed the S&P 500 is now in “extreme overbought” territory, based on where it’s trading relative to the its 50-day moving average.

“After Friday’s rally, the S&P 500 closed 2.47 standard deviations above its 50-DMA, which was the most ‘extreme’ overbought reading for the index since July 2021,” Bespoke said in an email.

The broader market index has rallied nearly 6% in the past three months partly due to strong tech gains.

Hamilton Reiner, the portfolio manager of the wildly popular JPMorgan Premium Income ETF (JEPI), said Monday that the trillions of dollars sitting in money market funds could become a source of support for stocks even if the U.S. enters a shallow recession, as he expects.

“I think you’re going to start to see investors suffering from ‘FOMO,'” Reiner said at a media event at the Nasdaq market site. “Do I think all that stuff’s out there still? I do. Do I think that it’s a reason to be on the sidelines? I don’t. Market timing tends to not work over the medium to long-term.”

Reiner also rang the open bell at the Nasdaq on Monday to celebrate the one-year anniversary of JEPQ, a sister fund of JEPI that is focused on Nasdaq 100 stocks. The funds, which combine active stock selection with an income-generating options strategy, have about $30 billion in combined assets after raking in about $20 billion of inflows over the past year.

— Jesse Pound

A handful of major technology stocks are responsible for more than half of the benchmark index’s gain in 2023, according to Goldman Sachs.

Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms have returned 53% since the start of the year, while the remaining 493 companies in the benchmark index are responsible for an average return of 0%.

“The market’s extremely narrow YTD rally has been a significant headwind to mutual fund performance,” wrote David Kostin, the Wall Street firm’s chief U.S. equity strategist,

— Samantha Subin

Morgan Stanley’s Mike Wilson is sticking with his bearish call for a tactical correction despite the recent rally driven by technology stocks.

“Hotter but shorter cycles persist — we continue to forecast an earnings recession this year that we don’t think is priced,” Wilson, the bank’s head of U.S. equity strategy, said in a note. “We still expect a tactical correction as the cyclical bear market concludes.”

The widely followed strategist stood by his base case for the S&P 500 to finish 2023 at 3,900, about 9% below Friday’s close of 4,282.37. Wilson’s forecast is well below the average year-end forecast of 4,157 from Wall Street strategists, according to CNBC Pro’s market strategist survey, which rounds up the top 15 strategists’ predictions.

— Yun Li

Shares of Unity jumped more than 14% after Apple said it’s collaborating with the software company on its Apple Vision Pro headset as it develops the app ecosystem for the $3,499 device.

— Jordan Novet, Samantha Subin

Club retailer Costco is looking more attractive for investors after a series of weak reports from other retailers, according to Oppenheimer.

Analyst Rupesh Parikh added the retailer back to the firm’s top pick list after removing Costco last November. Parikh said in a note to clients that stock could benefit from weakness at other retailers.

“Given the pullback in shares since then, the company’s better than expected delivery of bottom-line profitability on a sub 4% comp vs. our forecasts, and more muted buyside N-T comp expectations, we see an improved nearer-term outlook for outperformance,” Parikh said. “This includes potential money flows amidst challenges at many discretionary retailers lately.”

Oppenheimer has a price target on Costco of $575 per share. The stock was trading at about $518 per share.

— Jesse Pound

Brenda Vingiello, chief investment officer at Sand Hill Global Advisors, told CNBC’s “Halftime Report” she trimmed her position in red-hot chipmaker Nvidia.

“This is a stock where there’s a lot of good news baked in,” she said. “Our strategy and our style is to remain disciplined and trim along the way. It’s a position we established in March 2020. We’ve trimmed it once since then.”

Nvidia is the best-performing S&P 500 stock year to date, surging nearly 170%.

Shares of Intel were down more than 3% in afternoon trading following an announcement from Apple that an upcoming Mac Pro computer will include a new chip made in-house.

Intel chips were previously used in the Mac Pro. The announcement means that all of Apple’s computers will use Apple chips going forward. Apple introduced its first chip in 2020.

With the S&P 500 surpassing the key 4,200-point level, Evercore ISI now expects the broad index to finish 2023 at 4,450 as excitement around artificial intelligence boosts the market.

Julian Emanuel, Evercore ISI senior managing director, raised his target for the S&P 500 to 4,450 from 4,150. His new target implies the broad index could rally 3.9% from where it finished last week. Emanuel’s prior target meant the S&P 500 would need to give up about 3.1% through the rest of 2023. (The index has rallied almost 12% so far this year.)

Emanuel is now above the median and average S&P 500 targets on Wall Street after previously being right around them. And he think that target could be reached well before year end.

CNBC Pro subscribers can click here to read more about Emanuel’s prediction for the S&P 500 and how to play what he calls the “Momentum Market.”

— Alex Harring

These are the stocks making the biggest midday moves:

• Palo Alto Networks — The cybersecurity stock jumped more than 4% after S&P Dow Jones Indices announced Friday postmarket that it will replace Dish Network in the S&P 500, effective June 20. Dish Network dipped about 1%.
• 3M — The industrial manufacturer’s shares slid 3% after the judge in the company’s multi-district litigation over so-called forever chemicals agreed to delay the first trial by three weeks so parties can finalize a settlement of claims with municipal water providers, Bloomberg reported Monday.
• Coinbase – Shares of the crypto exchange and services company tumbled 10% after the Securities and Exchange Commission sued crypto exchange Binance on Monday, alleging that Binance and its cofounder Changpeng Zhao commingled billions of dollars of investor funds with their own and violated securities laws.

See the full list here.

— Tanaya Macheel

Shares of Coinbase tumbled about 10.5% on Monday afternoon after the Securities and Exchange Commission filed 13 complaints against Binance, the largest crypto exchange in the world.

The SEC alleged that Binance and its cofounder, Changpeng Zhao, comingled billions of dollars of investor funds with their own and violated securities laws. This follows a similar complaint against Binance from the Commodity Futures Trading Commission earlier this year.

The suit is the latest development in this year’s crackdown on the crypto industry by U.S. regulators. Since January, the SEC has charged Kraken, Genesis and Gemini Trust with offering unregistered securities to investors and has warned Coinbase of potential securities charges.

— Tanaya Macheel

TD Cowen thinks Liberty Formula One Group Class A can soar thanks to commercial rights to the racing World Championship.

“Formula One has minimal working capital impacts, low capital intensity, and an efficient tax structure in the utilization of its acquired FIA agreement for commercial rights to the World Championship, driving the ability to earn race promotion fees, media rights, and sponsorship fees (carrying annual escalators that can be repriced at the end of ~3-7 year durations),” analyst Stephen Glagola said.

Formula One Class A shares are up 22% from the start of the year.

Read the full analyst call here.

— Brian Evans

Technology stocks rallied on Monday, lifting the S&P 500 communications services and information technology sectors about 1% and 0.5%, respectively.

The majority of those gains came from technology giants, with Apple and Netflix last up about 2% each. Alphabet added 1.7%, while Oracle rose 1%. Amazon, Microsoft and Meta Platforms also moved slightly higher.

The move in technology names also boosted the Nasdaq Composite a little over 0.5%

— Samantha Subin

Caterpillar slid nearly 2% on Monday as investors assessed the share price following its best day in more than three years.

On Friday, the construction manufacturer rallied 8.4%. That’s the biggest one-day jump for the stock since March 24, 2020, when the stock advanced 10.3%.

Monday’s retreat made it the third worst performer in the 30-stock Dow, which was down a relatively modest 0.2% in the session. Intel and 3M slipped further than Caterpillar with losses of 2.7% each.

Banking stocks JPMorgan and Goldman Sachs also struggled.

Apple and Oracle rose to record highs dating back to their respective IPOs in 1980 and 1986, respectively. Meanwhile, Epam Systems traded a lows not seen since March 2022, and Amcor hit its lowest level since June 2020.

Here’s a look at other S&P 500 names that made fresh 52-week highs:

— Fred Imbert, Chris Hayes

The Securities and Exchange Commission filed 13 charges against crypto exchange Binance and co-founder Changpeng Zhao. In the charges, the SEC alleged that billions of dollars worth of user funds were sent to a European company under Zhao’s control.

“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” SEC Chair Gary Gensler said.

— Rohan Goswami, Alex Harring

Oppenheimer downgraded Estee Lauder stock on Monday, noting that Wall Street expectations for the cosmetics company are too high.

“As we look forward, we are harder pressed to see shares outperforming from current levels amidst aggressive Street estimates, a still premium valuation vs. history, and risks of a conservative management guide in August,” analyst Rupesh Parikh said.

Estee Lauder stock has pulled back more than 26% this year, falling 2.6% on Monday.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Technology stocks have outperformed year to date as investors veer back into the growth trade, with five major stocks fueling the rally higher.

But despite the recent gains, Barclays remains cautious about the path ahead.

“The YTD rally has been narrow and Tech-focused, and we believe its foundations are tenuous,” wrote Venu Krishna, head of U.S. equity strategy in a Monday note to clients.

“The easy money has been made, and the pain trade/path of least resistance may no longer be to the upside,” he added, noting that technology valuations hover near historical highs as earnings revisions linger in the red.

— Samantha Subin