Welcome to your weekly trading preview! Use the Table of Contents to jump around:
This Week's Trading Calendar
Click the calendar image to enlarge it, then scroll down to see what's coming down the pipe the week of May 15:
The Week in Review...
What a week! We survived:
- Earnings whiffs from Disney (DIS), PayPal (PYPL), AirBnB (ABNB), Wynn (WYNN)
- US CPI & PPI reports
- A giant pop & drop in Tesla (TSLA) Friday
The major indices were mostly down this week, but the QQQ's managed to squeeze into the green.
(data as of 2 p.m. Friday)
And year-to-date, the QQQ's are still crushing the other big ETFs thanks to huge moves in big tech stocks like Apple (AAPL), Tesla (TSLA), Nvidia (NVDA), and Microsoft (MSFT).
Even with Friday's ugly outside day, it's been pretty smooth sailing this year:
Now let's look forward to next week.
A Busier Stream of Econ Data
The US economic calendar picks up next week with:
- Monday: NY Empire State Manufacturing
- Tuesday: Industrial Production, Business Inventories, Retail Inventories, Fed’s Williams speaks
- Wednesday: Building Permits, Housing Starts
- Thursday: Jobless Claims, Philly Fed, Existing Home Sales
The big discussion on the Street is whether the Fed can slow the economy without breaking it.
So everyone will be watching these reports for a better idea of where the US economy stands.
After this week's light CPI and PPI reports, traders are pricing in a slightly higher probability of a Fed Rate hike at the June 14 meeting.
As of Friday afternoon, traders were pricing in a 16.6% probability of a June rate hike, up from 10.7% last week. That's thanks to this week's light CPI and PPI reports, which showed continued moderation in inflationary pressures.
Only a moron would argue that inflation is low.
But it is less awful.
And overseas, we get:
- Monday: Switzerland PPI, Canadian Housing Starts & Whole Sale Sales, China Industrial Production & Unemployment
- Tuesday: Great Britain Employment, EU GDP, Italy CPI, Canada CPI, Japan GDP
- Wednesday: EU CPI, Japan Industrial Production, New Zealand PPI, Australia Employment
- Thursday: Canada Housing Prices, Japan CPI
- Friday: Germany PPI, Canada Retail sales
Retail Earnings Time
Earnings season is pretty much done, but we've got some big retail reports on tap:
- Tuesday: Home Depot (HD)
- Wednesday: Target (TGT), TJ Maxx (TJX)
- Thursday: Walmart (WMT), Ross Stores (ROST)
- Friday: Foot Locker (FL)
This earnings season has been all over the place for consumer stocks.
We've seen some huge hits (like Apple) and some big misses (like Disney)
Nonetheless, Walmart and Target should give us fresh insights on the consumer.
Outside of retail, we have Baidu (BIDU) on Tuesday, Cisco on Wednesday (CSCO), and Applied Materials (AMAT) on Thursday.
So How Has Earnings Season Been?
As we noted last week, earnings season is pretty strong relative to expectations.
According to FactSet, 92% of S&P 500 companies have reported, and so far:
- 78% of companies beat EPS estimates
- 75% of companies have beaten revenue estimates.
- Earnings have declined by -2.5% vs. expectations for a -6.7% decline
So earnings stink, but they're not as bad as expected.
Which is why the market's been up this year.
Traders Are Still in a Bad Mood
Investors and traders remain remarkably bearish despite the market's stability.
According to AAII, just 29.4% of investors are bullish.
That's up from 24.1% the past two weeks, but well below the 37.5% long-term average.
AAII said "pessimism among individual investors stayed above average for the 12th consecutive week."
A Look at Sector Performance in 2023:
Click to enlarge
It's the same old story.
Housing (ITB) is winning which it's not supposed to do in a rising rate environment, which could be related to traders pricing in rate cuts later this year.
And tech is pretty strong with XLK, SMH, and ARKK all up 20% YTD.
Meanwhile, Natural Gas (UNG), Banks (XLF, KRE), Energy (XLE, OIH), and Cannabis (MSOS) have lagged, big time.
Factoid of the Week: The Best Traders on Earth are in the US Congress
According to Unusual Whales, Alabama Senator Tommy Tuberville is quite the active options trader:
BREAKING: Senator Tommy Tuberville has just sold millions in stock and options.
— unusual_whales (@unusual_whales) May 12, 2023
He sold puts on $TXN, $KR, $HPQ, $PARA, $AMT, and sold 50k in puts on $TSLA, $CSCO and $MSFT
And much more.
He appears to using options while in Congress.
Wild.
Interestingly, two opposing members of Congress -- Matt Gaetz and Alexandria Ocasio-Cortez -- are teaming up to ban members of Congress from trading or owning stocks.
Because Paul Tudor Jones or Richard Dennis have nothing on this crew:
— unusual_whales (@unusual_whales) January 3, 2023
BREAKING
I have just released the full trading report on politicians in 2022.
Despite 2022 being the worst market since 2008, both Democrats & Republicans beat the market.
Many politicians individually beat the market.
And many made unusual trades resulting in huge gains. pic.twitter.com/qDWIJB2spk
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