Why $183 Matters for Apple
SPY held the 8 day last week and Thursday. I bought some $421 calls for another breakout. SPY hit $428.74 and I took off half for ~75%. I’ll trim the rest because they expire today. If we pull back a bit, I may add higher strikes. $431.73 is the high from last August. QQQ: tech led the rally since March with many nice setups along the way. It might underperform in June. $352ish is upper support. We can’t get too bearish if that holds. The AAPL event at 1:00 will be interesting. If that doesn’t get sold, QQQ shorts will get punished. I sold premium higher to generate some cash flow. Now let’s look at individual names: AAPL: there are lots of upgrades and articles ahead of the 1:00 p.m. ET WWDC event with talk about AR and AI. They usually try and sell these events. $183 is a very interesting spot. See how it deals with that today. I bought stock and options as it held the post-earnings gap. I’ll trim stock and hold options in case it clears the all-time high. TSLA has kept rewarding traders since clearing $169.76 where I put my swing long on. It’s given us multiple setups with plenty of options trades. It hit $217.25 Friday. I switched to another call spread and I’m still long. I’ll trim some and hold some. NVDA had a huge move that gave us so many ways to buy and trade it. The stock hit $419.36 with a topping tail to give clues it might need to consolidate for a while. We can be tactical here. Some got short Friday as it went green to red with a low of $390.58. This morning, see if there’s a signal to go red to green, or if it sees $378 active support or the important earnings gap pivot. AMD triggered long after I listed it around $91.60. it’s been special since then and above the 8 day. Last Tuesday, I mentioned to trim or look for a cute short as it was super extended. It hit $130.79. On Friday it made a lower high at $121 and went red. This morning it will be testing the $115.80 gap pivot. I’ll see if there’s an active buy vs. a 5-15-30 minute low. NFLX is tricky at times, but it gave so many set ups that I went over here. Last week it held $385ish and hit a high of $407.52. Use the 8 day as your guide. MSFT is still rewarding swing longs. It’s been riding the 8 day with a high of $337.50. Keep managing the trade. Many are doing well with it. Scott Redler Positions Disclosure as of 2023-06-05 at 9.21.23 AM
Continue Reading -->Coffee With Greta: New Week
DJIA Futures: -3 (-0.01%) SPX Futures: +2 (+0.04%) NASDAQ Futures: -13 (-0.1%) Good morning friends! Futures are flat after the market’s best week since March. Let’s get right to it! IMF Chief Calls For More Rate Hikes The International Monetary Fund’s managing director says lending has not slowed enough to warrant the Fed pausing its rate-hiking cycle. Kristalina Georgieva told CNBC over the weekend, “We don’t yet see a significant slowdown in lending. There is some, but not on the scale that would lead to the Fed stepping back.” She said the strong jobs report on Friday supports the Fed hiking rates again this month. Georgieva added, “The pressure that comes from incomes going up and in unemployment being still very, very low, means that the Fed will have to stay the course and perhaps in our view, they may need to do a little bit more.” She called on the central bank to “pay attention to trends and be agile, adjusting — should the trends change.” Oil Prices Pop Oil prices are rallying this morning after Saudi Arabia pledged more voluntary production cuts. West Texas Intermediate crude futures are up 2.7% to $73.65 bbl while Brent crude futures are up 2.5% to $78 bbl. OPEC+ made no changes to its planned cuts for the rest of the year but Saudi Arabia announced it will cut production by another 1 million barrels per day starting in July. Saudi production will fall to 9 million bpd from around 10 million in May. Apple Rises Ahead of WWDC Apple (AAPL) shares are up 0.9% ahead of the open ahead of the company’s Worldwide Developers Conference. The WWDC kicks off today in Cupertino, California. Apple is widely expected to announce a “Reality Pro” mixed reality headset. The headset is rumored to offer both virtual reality and augmented reality. The company is also expected to reveal new MacBooks and iOS 17 while will include new features for the iPhone, iPad, and Apple Watch Spotify Announces Layoffs Spotify (SPOT) shares are slipping 0.2% in premarket trade after the company announced it will layoff roughly 200 employees. The cuts represent just 2% of Spotify’s workforce and are part of a “pivot” in its podcasting unit. The vice president said those impacted will receive “generous severance packages”. Quieter Week This will be a slower week of economic data for traders. Later this morning the S&P Global services PMI for May will be released at 9:45 a.m. ET followed by April factory orders and the ISM services PMI at 10:00 a.m. Then on Wednesday, the April trade deficit will be released at 8:30 a.m. and the April consumer credit report will be out at 3:00 p.m. Weekly jobless claims will be reported Thursday at 8:30 a.m. with April wholesale inventories at 10:00 a.m.
Continue Reading -->Will GameStop Say AI? What’s on Tap June 5-9, 2023
Welcome to your weekly trading preview! Before we get started, sign up for the Newsbeat Open House with JR Romero! Use the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarWeek in Review: Tech Never Dies?A Big Slowdown…Will GameStop (GME) Say AI?Earnings Season CheckupTraders Are in a “Meh” Mood Despite Market StrengthThe Best ETFs of 2023 – Semis RULE!Factoid of the Week: Retail WinnersSami Lost $65,000 Before He Hit It Big! This Week’s Trading CalendarIf you want to view or download this week’s calendar, check click the image below:Click to enlarge Week in Review: Tech Never Dies?Just when we thought tech couldn’t get any stronger… the QQQ’s jumped another 1.9% this week, aided by surges in names like Tesla (TSLA), Intel (INTC), Paypal (PYPL), and Netflix (NFLX).(data as of 3:15 p.m. Friday) Year-to-date, the QQQ’s are up a ridiculous 33.3%. However, traders are starting to ask whether the other major index ETFs SPY, IWM, and DIA are about to play catch-up. All three outperformed QQQ for the week as small caps, banks, and energy played catch-up. However, judging by the action in individual stocks, shorts had better be careful betting against tech… especially when there’s the potential for the magic two letters to come out. And yes, those magic letters are “AI.” MongoDB (MDB) surged 28% on Friday after a blockbuster earnings report and a bullish outlook driven by the almighty AI. A Big Slowdown…The US economic data calendar slows down this week with:Monday: S&P Global PMI Services PMI, Factory Orders, ISM Non-Manufacturing Employment & PMITuesday: EIA Short-Term Energy Outlook, API Crude Oil StockWednesday: Trade BalanceThursday: Jobless ClaimsFriday: Baker Hughes Rig CountThere’s not a lot to get excited about here so we won’t waste your time with unnecessary commentary. And overseas, we see:Monday: CHF CPI, ES/ITA/FRA/DE PMI, EU Services PMI, JPY Household Spending, GBP Retail SalesTuesday: AUD Rate Decision & GDP, DE Factory Orders, GBP Construction PMI, CAD Building Permits & Ivey PMI, CNY Trade BalanceWednesday: CHF Unemployment, DE Industrial Production, BR CPI, CAD Rate Decision, JPY GDP, AUD Trade BalanceThursday: IN Rate Decision, EU GDP, NZD PMI, CNY CPI & PPIFriday: RUB Rate Decision & CPI, CAD Employment, Will GameStop (GME) Say AI?Last week was action-packed with MongoDB (MDB), Zscaler (ZS), Broadcom (BRCM), Lululemon (LULU), and C3.ai (AI) but this week’s calendar is light.Still, we’ll be watching:Tuesday: The J. M. Smucker Company (SJM), Ciena Corporation (CIEN)Wednesday: Brown-Forman Corporation (BFB), Campbell Soup Company (CPB), GameStop Corp. (GME)Thursday: The Toro Company (TTC), Signet Jewelers Limited (SIG), DocuSign Inc. (DOCU), Vail Resorts Inc. (MTN)Friday: Nio (NIO)The big question we’re going to ask is… will GameStop (GME) say “AI” on its earnings call? Because with the stock up 32% in the past month and short interest sky-high at 18%, management may try to juice the stock with the magic word. Earnings Season CheckupAccording to Factset, 99% of the S&P 500 have reported and:78% of companies beat EPS estimates75% of companies have beaten revenue estimates.Earnings have declined by -2.1% vs. expectations for a -6.7% declineFactset also tells us that 10 of 11 sectors have reported better-than-expected earnings, with utilities being the outlier. Traders Are in a “Meh” Mood Despite Market StrengthInvestors and traders remain bearish despite the market’s strength this year. According to AAII, just 29.1% of investors are bullish. That’s up from last week’s 27.4% reading but under the long-term average of 37.5%. 36.8% of investors are bearish, and AAII said “Bearish sentiment is above its historical average of 31.0% for the 75th time out of the past 80 weeks.” This negativity may be fueling the market’s rise. The Best ETFs of 2023 – Semis RULE!Semiconductors are still rocking hard thanks to blockbuster moves in names like Nvidia (NVDA), AMD (AMD), and Marvell (MRVL).This table shows you just how important sectors have been in 2023. It was hard to predict at the end of 2022, but the more risk you took, the more you got paid this year. Meanwhile, energy is way behind after huge returns in 2021 and 2022. Factoid of the Week: Retail WinnersAmazon (AMZN) and Costco (COST) are the first and third-best retail stocks of 2023:What do they have in common? No shoplifting. We can’t say the same about Lululemon (LULU), though they still squeezed out a huge earnings win. Sami Lost $65,000 Before He Hit It Big!Get to know Sami Abusaad of T3’s Strategic Day Trader VTF®:
Continue Reading -->Coffee With Greta: Hot Jobs Report
DJIA Futures: +216 (+0.7%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +42 (+0.3%) Good morning friends! Futures are higher as traders digest a hotter-than-expected May jobs report and the debt ceiling bill passes Congress. Let’s get right to it! Job Growth Surges In May The U.S. economy added far more jobs than expected in May. The Labor Department reported nonfarm payrolls rose by 339,000 last month while the unemployment rate jumped to 3.7% from 3.4% in April. The gain was sharply higher than economists’ expectations for 190,000 jobs. But the unemployment rate rose more than expectations for 3.5%> The higher unemployment rate is a signal more workers may now be searching for a job. Hourly wages rose 0.3% monthly as expected and 4.3% year over year, just below 4.4% expected. April’s job growth was also revised higher to 294,000 from 265,000 previously while March was revised up to 217,000 from 165,000. Senate Passes Debt Ceiling Bill The debt ceiling bill is now headed to President Biden’s desk after the Senate passed the legislation Thursday evening. The upper chamber approved the Fiscal Responsibility Act in a 63-36 vote. Biden is now expected to sign the bill today and address the nation at 7:00 p.m. ET. In a statement after the Senate vote, Biden said, “No one gets everything they want in a negotiation, but make no mistake: This bipartisan agreement is a big win for our economy and the American people.” The Treasury Department had given Congress a June 5 deadline to raise the debt ceiling in order to avoid a default. The legislation suspends the debt limit until January 1, 2025. Lululemon Surges As Sales Jump Lululemon Athletica (LULU) shares are up 14.9% ahead of the open after beating fiscal Q1 expectations and hiking its full-year outlook. Here’s how the athleisure retailer’s results compared to analysts’ estimates: EPS: $2.28 vs $1.98 expected Revenue: $2 billion vs $1.93 billion expected Revenue jumped 25% year over year as the company’s sales in China recovered. Revenue in China surged 79% from a year ago. The CFO said, “Our Q1 results were strong as guests responded well to our product offering in all our markets across the globe. A meaningful acceleration in our China sales trend, coupled with lower air freight, contributed to our better than planned financial performance.” Lululemon now expects full-year revenue of $9.44 billion to $9.51 billion up from $9.31 billion to $9.41 billion previously. The company also forecast full-year EPS of $11.74 to $11.94 vs its previous forecast for $11.50 to $11.72. Dell Tops Q1 Expectations Dell Technologies (DELL) shares are falling 2.1% in premarket trade despite beating fiscal Q1 expectations. Here’s how the computer maker’s results compared to analysts’ estimates: Adjusted EPS: $1.31 vs $0.86 expected Revenue: $20.9 billion vs $20.3 billion expected That revenue beat came even as sales dropped 20% year over year. Dell’s PC business, the Client Solutions Group, brought in $12 billion in revenue which was down 23% from a year ago but better than $11.4 billion expected. The company also reported improving margins as component costs fall.
Continue Reading -->Coffee With Greta: June Kickoff
DJIA Futures: -90 (-0.3%) SPX Futures: -1 (-0.02%) NASDAQ Futures: -18 (-0.1%) Good morning friends! Futures are down as traders digest new hot jobs data and the debt ceiling deal makes progress in Congress. Let’s get right to it! House Passes Debt Ceiling Deal The bill to raise the debt ceiling is now headed to the Senate after passing in the House Wednesday night. The lower chamber approved the Fiscal Responsibility Act in a 314-117 vote. Senate leaders have set a goal of passing the bill in 48 hours. Majority Leader Chuck Schumer said, “There’s been a very good vote in the House. I hope we can move the bill quickly here in the Senate and bring it to the president’s desk as soon as possible.” The Treasury Department says it will run out of money June 5. May Private Job Growth Runs Hot The U.S. private sector added more jobs than expected in May. Payroll firm ADP reported private employers added 278,000 workers last month. That was sharply higher than expectations for just 180,000. Leisure and hospitality added 208,000, natural resources and mining gained 94,000, construction added 64,000, trade, transportation and utilities added 32,000, and other services gained 12,000. But several sectors saw declines. Manufacturing dropped by 48,000, financial activities lost 35,000, and education and health services lost 29,000. Wage gains continued to slow, with annual pay up 6.5% vs 6.7% in April. Those switching jobs saw an annual increase of 12.1%, down a full 1% from April. ADP’s chief economist said, “This is the second month we’ve seen a full percentage point decline in pay growth for job changers. Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.” The Labor Department’s official May jobs report will be released tomorrow and is expected to show a gain of 190,000 jobs with the unemployment rate rising to 3.5%. Weekly Jobless Claims Rise Weekly jobless claims rose less than expected last week. The Labor Department reported 232,000 Americans filed initial unemployment claims. That was up by 2,000 from the previous week and lower than 235,000 expected. Macy’s Drops After Slashing Outlook Macy’s (M) shares are falling 4.9% in premarket trade after missing fiscal Q1 revenue expectations and cutting its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $0.56 vs $0.45 expected Revenue: $4.98 billion vs $5.04 billion expected Revenue dropped 7% year over year while comparable sales fell 7.2% vs 4.7% expected. Macy’s now expects full-year adjusted EPS of $2.70 to $3.20, down sharply from previous guidance for $3.67 to $4.11. The company expects full-year sales of $22.8 billion to $23.2 billion vs $23.7 billion to $24.2 billion previously. Nordstrom Rallies On Sales Beat Nordstrom (JWN) shares are up 4.6% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted loss per share: $0.07 vs $0.08 expected Revenue: $3.18 billion vs $3.12 billion expected CEO Erik Nordstrom said, “We’re encouraged by our momentum, especially given the uncertain macroeconomic environment.” Nordstrom reaffirmed its full-year outlook for revenue to fall 4% to 6% and adjusted EPS between $1.80 and $2.20. Salesforce Costs Overshadow Earnings Beat, Higher Outlook Salesforce (CRM) shares are 7.4% in premarket trade after beating fiscal Q1 expectations but reporting higher capital costs than expected. Here’s how the software company’s results compared to analysts’ estimates: Adjusted EPS: $1.69 vs $1.61 expected Revenue: $8.25 billion vs $8.18 billion expected Salesforce’s capital expenditures totaled $243 million in the quarter, up 36% year over year and higher than $205 million expected. Those cost concerns overshadowed the 11% annual increase in revenue. Salesforce expected fiscal Q2 adjusted EPS of $1.89 to $.190 and $8.51 billion to $8.53 billion in revenue. That beat analysts’ estimates for adjusted EPS of $1.70 on $8.49 billion in revenue. For the full year, Salesforce raised its earnings forecast to $7.41 to $7.43 per share on $34.5 billion to $34.7 billion in revenue. In Case You Missed It Job openings rose unexpectedly in April. The Labor Department’s job openings and labor turnover survey (JOLTS) showed there were 10.1 million available jobs in April, up from 9.8 million in March. Economists had expected openings to fall to 9.4 million. It was the highest number in 3 months as the labor market maintains strength amid the Fed’s tightening cycle.
Continue Reading -->Coffee With Greta: Waiting On A Vote
Register now for my free Q&A with David Prince today! DJIA Futures: -112 (-0.3%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -67 (-0.5%) Good morning friends! Futures are slipping as traders await a vote on the debt ceiling deal in the House. Let’s get right to it! Debt Ceiling Deal Clears Key Committee The House Rules Committee advanced the debt ceiling deal reached by President Biden and House Speaker Kevin McCarthy Tuesday night. The committee approved the bill in a 7-6 vote, sending it to the full House for a vote. A floor vote on the deal is expected around 8:30 p.m. ET today. A group of 20 House Republicans came out against the bill on Tuesday but it is still expected to pass the lower chamber. The legislation would then be sent to the Senate for a vote. American Airlines Raises Profit Outlook American Airlines (AAL) shares are up 2.4% ahead of the open after hiking its Q2 profit outlook. The airline now expects adjusted EPS between $1.45 and $1.65 this quarter vs $1.20 to $1.40 previously. The higher forecast is thanks to strong travel demand and lower fuel prices. Hewlett Packard Reports Mixed Results HP Inc (HPQ) shares are down 5.7% in premarket trade after reporting mixed fiscal Q2 results. Here’s how the PC maker’s results compared to analysts’ estimates: Non-GAAP EPS: $0.80 vs $0.76 expected Revenue: $12.9 billion vs $13.1 billion expected It was HP’s lowest quarterly revenue since the April 2020 quarter. Sales in the company’s Personal Systems group, which is its PC business, dropped 29% year over year to $8.2 billion vs $8.4 billion expected. HP forecast fiscal Q3 non-GAAP EPS of $0.81 to $0.91 vs $0.85 expected. The company narrowed its full-year forecast range for non-GAAP EPS to $3.30 to $3.50 vs $3.20 to $3.60 previously. Mortgage Demand Drops to 3-Month Low Mortgage demand fell to a three-month low last week as rates shot higher. The Mortgage Bankers Association reported purchase applications dropped 3% weekly and were down 31% year over year. Refinance applications fell 7% weekly and 45% annually. The drop came as the average 30-year contract rate popped higher to 6.91% from 6.69% the previously week. In Case You Missed It Home prices rose in March as buyers continue to struggle with low inventory. The S&P CoreLogic Case-Shiller national home price index rose 0.7% in March compared to March 2022. The index also rose 0.4% monthly. The release said, “March’s results suggest that the decline in home prices that began in June 2022 may have come to an end.” The 20-city index fell 1.1% annually and rose 0.5% monthly while the 10-city index dropped 0.8% annually and rose 0.6% monthly. Consumer confidence slipped to a 6-month low in May. The Conference Board’s consumer confidence index fell to 102.3 from 103.7 in April. That was better than expectations for the index to fall to 99. Consumers are feeling less confident about the labor market. The share of respondents who viewed jobs as “plentiful” fell to the lowest level since April 2021 while those who said jobs are “hard to get” hit a six-month high.
Continue Reading -->Coffee With Greta: Debt Ceiling Agreement Reached
Register now for my free Q&A with David Prince on Wednesday! DJIA Futures: -10 (-0.03%) SPX Futures: +22 (+0.5%) NASDAQ Futures: +187 (+1.3%) Good morning friends! Futures are mostly higher after the President and House Speaker reached a tentative debt ceiling agreement. Let’s get right to it! Debt Ceiling Deal President Biden and House Speaker Kevin McCarthy reached a deal on Sunday to raise the debt ceiling. Congress is expected to vote on the bill as early as tomorrow after the Treasury Department said they have until June 5 before a default. Biden said, “The agreement prevents the worst possible crisis, a default, for the first time in our nation’s history. Takes the threat of a catastrophic default off the table.” The deal would suspend the debt ceiling until January 1, 2025 and spending caps for the next two years. In fiscal year 2024, military spending would be capped at $886 billion and nonmilitary discretionary spending at $704 billion. In fiscal year 2025, military spending would increase to $895 billion and nonmilitary discretionary spending to $711 billion. Nvidia Eyes $1 Trillion Nvidia (NVDA) shares are up 4.5% ahead of the open and on track to hit a $1 trillion market cap at the bell. To hit the $1 trillion mark NVDA shares must hold above $404.86. The stock has rocketed toward the trillion dollar club since last Wednesday when the company beat Q1 expectations and forecast huge Q2 revenue numbers. The other $1 trillion stocks include Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT). Other semiconductor stocks are moving alongside NVDA this morning with the VanEck Semiconductor ETF (SMH) up 2.3%. Musk Meets China’s Foreign Minister Tesla (TSLA) shares are up 4.0% in premarket trade after CEO Elon Musk met with China’s Foreign Minister in Beijing. The meeting was reportedly meant to show China is open to foreign business while Tesla reportedly signaled plans to further expand in the country. The FM said China’s electric vehicle market “has broad prospects for development” and said the country will continue to create a better “market-oriented” and “law-based” business environment for foreign companies like Tesla. Jobs Week This will be an important week of data for the Fed as traders look ahead to the May jobs report. The Conference Board releases the May consumer confidence index at 10:00 a.m. ET today. Then the Labor Department releases its April job openings and labor turnover survey Wednesday at 10:00 a.m. while the Fed releases its Beige Book at 2:00 p.m. ADP’s private employment report for May will be out Thursday morning along with weekly jobless claims and the Q1 productivity revision. On Friday morning, the Labor Department releases the official May jobs report.
Continue Reading -->5 AI Stocks to Watch This Week
SPX futures are +22, giving upside follow through to Friday’s move above the 4160-4180 area with a close above 4200. It seems like we can reach the 4325 high from last August. But take trades along the way. We’ve had many nice setups the past few weeks because we focused on setups instead of calling tops or predicting recessions. SPY: I bought $416 calls last Thursday for a potential Friday move. It cleared $416 to see $420.70. This morning, it’s at $422+. I’d trim and trail but it seems like it can work back to the $430 area. We’ll see if today’s move builds. QQQ has led the way higher since the March ignition above the downtrend line. Last week the gap up from NVDA held and on Friday it cleared $341 to see $349.25. This morning we are at new monthly highs. I always trim when a gap like this is in my favor. I might sell some calls for this Friday as a way to hedge. Now let’s dig into some AI-related names: AI became a huge winner again. I got into a swing long in the $22 area. Last week I also put on some $30 calls that are up 300%. Make sure to manage it. We’ll see if it can hold the March high of $34.68 to build. NVDA helped add fuel to the tech rally. I made 5Xish on my call spread for earnings. Some bought vs. the post-earnings gap at $366. This morning it looks above $394.80. Congrats to long-term investors and short-term traders here. I’d trim and trail. MSFT continues to reward swing longs from the post-earnings gap of $292. it gave multiple entries since then. It hit $333.40 Friday. I’d make sure to trim some this morning because it’s a bit extended. That doesn’t mean it’s an easy short. GOOGL became a big focus for us around $105ish and it hit $126.43 last week. It has another bull flag setup. See if it clears that. Some are long vs. $119.50. Others are waiting for it to clear that pivot. SMCI has been a rock star. Lots on the VTF® did very well here. I’d trim some because it’s extended but it’s not an easy short. Scott Redler Positions Disclosure as of 2023-05-30 at 8.25.49 AM
Continue Reading -->Is There Life After Nvidia? What’s on Tap May 30 – June 2
Welcome to your weekly trading preview! Before we get started, check out:Coming Wednedsay: Inner Circle’s David Prince on Conversations With a Pro TraderSave 40% with T3’s Memorial Day SaleUse the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarWeek Review: Nvidia Dominates!Jobs Data Is on the WayEarnings: Life After Nvidia?AI: The Earnings Season CrazeTraders Are in a Rotten Mood Despite the Market’s ResilienceThe Best Stocks & ETFs of 2023Factoid of the Week: Nvidia Is CHEAP?Get to Know Kira Turner This Week’s Trading CalendarIf you want to view or download this week’s calendar, check click the image below:Click to enlarge Week Review: Nvidia Dominates!You guessed it! This week was all about Nvidia’s (NVDA) shocking earnings beat and guidance, which sent tech and especially semiconductors screaming higher. The QQQ’s rose 3.4% for the week:(data as of 2:23 p.m. Friday) Year-to-date, the QQQ’s are up a ridiculous 30.7% thanks to the brutal strength in large-cap tech stocks. 17 stocks in the Nasdaq 100 (the index upon which QQQ is based on) are up more than 40% year-to-date. And year-to-date Nvidia is the #1 stock in the S&P 500, Nasdaq 100, and the SMH ETF. (more on this below In economic news, the big story was Friday’s Core PCE Index, which is the Fed’s preferred inflation indicator. The number came in hot, which had some folks worrying about early Friday morning. The worries didn’t last with stocks powering higher into the close. Now let’s look forward to next week. Jobs Data Is on the WayWe have some important US economic data reports on tap including:Tuesday: S&P/CS Home Prices, CB Consumer ConfidenceWednesday: Chicago PMI, FOMC’s Harker Speaks, Beige Book, API Crude StocksThursday: ADP Employment, Jobless Claims, Nonfarm Productivity, ISM Manufacturing PMI, Crude Oil Inventories, FOMC’s Harker SpeaksFriday: Nonfarm payrolls, Baker Hughes Rig CountThe biggie this week is the nonfarm payrolls report. Despite lots of headlines about layoffs, the labor market has remained strong in recent months.As of Friday afternoon, traders are pricing in a 66.5% probability of a 25bps June rate hike, up from just 17.4% one week ago. And overseas, we get:Monday: BRL Focus Market Readout, NZD Building Consents, JPY Job/Applications ratio, AUD Building ApprovalsTuesday: CHF GDP, ES CPI, JPY Industrial Prod. & Retail Sales, AUD CPI, CNY PMIWednesday: CHF Retail Sales, FRA CPI & GDP, DE Unemployment & CPI, BRL Unemployment, CAD GPI, AUD Retail Sales, CNY Caixin PMIThursday: DE Retail Sales, ES/ITA/DE/FRA PMI, EU CPI, EU Unemployment, KRW CPIFriday: ES Unemployment, BRL Inflation(don’t forget the market is closed on Monday May 29 for Memorial Day) Earnings: Life After Nvidia?Nvidia (NVDA) was the start of earnings season, but pay attention because we’ve got some big ones this week, like:Tuesday: HP Inc. (HPQ) U-Haul (UHAL), Ambarella (AMBA)Wednesday: Salesforce.com (CRM), Crowdstrike (CRWD), Chewy (CHWY), Kroger (KR), Advance Auto Parts (AAP), C3.ai (AI)Thursday: Dollar General (DG), Macy’s (M), Broadcom (AVGO), Lululemon (LULU), MongoDB (MDB), Zscaler (ZS)This looks like a random grab-bag, but we could see some fireworks. Cloud security play Zscaler (ZS) is the second-best performing Nasdaq 100 stock in May — performing even better than Nvidia. Broadcom (BRCM) will be watch just because semiconductor stocks have been on fire — and not just Nvidia. Marvel (MRVL) was up nearly 30% on Friday after earnings, and 7 of the 25 stocks in the SMH ETF are up more than 20% In May. Salesforce.com (CRM) and MongoDB (MDB) will give us insights on enterprise tech trends, while the retailers like Kroger (KR) and Macy’s (M) should give us more consumer insights. But the star of the week might be C3.ai (AI) on Wednesday, which has been rallying hard on the AI craze. Can they pull an Nvidia? We’re about to find out. AI: The Earnings Season CrazeAccording to Factset, 110 companies in the S&P 500 used the term “AI” during their Q1 earnings calls. That’s up from 78 last quarter. And as far as earnings season goes, things have been better than expected (though not great). 97% of S&P 500 companies have reported, and:78% of companies beat EPS estimates76% of companies have beaten revenue estimates.Earnings have declined by -2.1% vs. expectations for a -6.7% decline Traders Are in a Rotten Mood Despite the Market’s ResilienceInvestors and traders remain bearish despite the market’s strength this year. According to AAII, just 27.4% of investors are bullish. That’s up from last week’s 22.9% reading but well below the long-term average of 37.5%. 39.7% of investors are bearish, and AAII said “Bearish sentiment is above its historical average of 31.0% for the 74th time out of the past 79 weeks.” The Best Stocks & ETFs of 2023For fun, let’s look at the top 20 stocks of 2023:As we discussed, Nvidia (NVDA) is on top by a country mile. Even #2 Meta’s (META) 118% gain is way behind.Now let’s move onto ETFs:Thanks to Nvidia (NVDA), Marvel (MRVL), and other semi names, the SMH ETF is now up a whopping 45% year-to-date The broader XLK and QQQ ETFs are up big but well-behind. And while the ARKK ETF is up big this year with a 25.7% gain, fund head Cathie Wood came under fire for dumping Nvidia (NVDA) right before this year’s historic 160% run. Factoid of the Week: Nvidia Is CHEAP?Want to know how big Nvidia’s guidance was? So big that the consensus FY2024 revenue forecast rose by 41% in two days. And analyst raised their earnings estimates by 70%.These increases are so big that based on forward earnings estimates, Nvidia is the cheapest it’s been since January. (we’re not making a stock recommendation here…) Get to Know Kira TurnerLearn more about Kira Turner of T3 Live’s Inner Circle.
Continue Reading -->Coffee With Greta: Stubborn Inflation
Register now for my free Q&A with David Prince next week on LinkedIn! DJIA Futures: +9 (+0.03%) SPX Futures: +1 (+0.02%) NASDAQ Futures: +23 (+0.2%) Good morning friends! Futures are flat as traders digest the latest inflation data and monitor progress in debt ceiling talks. Let’s get right to it! PCE Inflation Hotter Than Expected The Fed’s preferred inflation gauge ran hotter than expected in April. The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.4% monthly and 4.4% year over year last month. That was up from the 4.2% gain in March. The core PCE price index, which excludes food and energy and is the Fed’s preferred inflation measure, rose 0.4% monthly and 4.7% year over year. That was hotter than expectations for 0.3% monthly and 4.6% annually. The data showed the U.S. economy tilting back toward a services focus as goods prices increased 2.1% year over year but services prices jumped 5.5%. The report also showed consumer spending held up strong during the month despite stubborn inflation pressures. Consumer spending jumped 0.8% in April vs 0.4% expected. Personal incomes rose 0.4%, in line with expectations. Debt Ceiling Talks Continue Debt ceiling talks are still ongoing after negotiators reportedly moved closer to a deal on Thursday. But the final phase of talks is expected to be the most difficult. Republican Representative Patrick McHenry told reporters, “We’re at a sensitive phase, with sensitive issues that remain. Those sensitive issues are the thorniest issues that we’ve been discussing. Everybody’s trying to do a fine job of figuring out the finer details of this, but nothing’s done.” President Biden said, “The only way to move forward is with a bipartisan agreement, and I believe we’ll come to an agreement that allows us to move forward and protects the hardworking Americans of this country.” No in-person meeting at the White House is scheduled for today but McHenry said, “there’s alignment on the set of things that we need to work on.” Costco Slips After Earnings Miss Costco (COST) shares are down 0.2% ahead of the open after missing fiscal Q3 expectations. Here’s how the warehouse retailer’s results compared to analysts’ estimates: EPS: $2.93 vs $3.29 expected Revenue: $52.6 billion vs $54.5 billion expected Same-store sales rose just 0.3% globally and dipped 0.1% in the U.S., missing expectations for 2.8% growth. Coming Up: Consumer Sentiment The University of Michigan releases its final consumer sentiment index for May at 10:00 a.m. ET. That survey is expected to be unchanged from the flash reading of 57.7 earlier this month. The index also includes consumers’ inflation expectations over the next one, three, and five years. In Case You Missed It Pending home sales stalled in April as buyers struggle with low inventory. The National Association of Realtors reported the number of contracts signed to purchase a home was unchanged last month. That missed expectations for a 0.8% increase. Pending sales tumbled 20.3% year over year.
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