Inflation Lower, Tech Climbs Higher, Kitty Doubles Down – June 14 Market Recap
Indices
- Dow 38,798, -209 or -0.54%.
- Nasdaq 17,688 (record close), +555 or +3.24%.
- S&P 5,431, +85 or +1.59%.
- MSCI EAFE 2306.41, -62.56 or -2.64%.
- USD10Y 4.213%, -30.1bp or -6.67%.
- WTI Crude $78.48 bbl, +$3.10 or +4.11%.
Inflation Lower, Tech Climbs Higher
Both the Consumer Price Index (CPI) and the Producer Price Index (PPI) surprised the markets with lower-than-expected inflation reports on Tuesday and Wednesday respectively. In fact, Producer Prices, which represent wholesale prices paid, were negative month over month. This data paired with the Fed’s marginal change in language in its statement was enough to unleash the animal spirits within the S&P and especially within the Nasdaq which set record closing highs every day last week. Apple enjoyed a monster boost on Tuesday coming out of their developer conference, chipmaker Broadcom (AVGO) and Adobe (ADBE) reported great quarters and spiked. Oracle (ORCL) missed their numbers but rallied on the news that their databases would be available on Google’s cloud in November.
Kitty Doubles Down
Keith Gill aka “Roaring Kitty” posted another screenshot of his GameStop (GME) position on Thursday which showed that he had increased his holdings of GameStop from 5 million shares to 9 million and revealed a $6 million cash hoard. There were no call options listed among his positions signifying that he had exited the position, increased his common holdings by 4 million shares and taken profits with the balance. Previously he had displayed ownership of 120,000 call options (representing 12 million shares of stock) which while in the money, were going to expire on June 21 with a $20 strike price. At those prices, Gill would have needed $240 million to exercise the entire position and take possession of the 12 million shares of stock. GME ended the week up +2.98%.
This Week: June 17 – June 21
It is a slow and short week as markets are closed on Wednesday in observance of Juneteenth. On the economic data front, manufacturing will be the focus as both New York and Philadelphia report their June numbers and S&P will report their June Flash Manufacturing and Services PMIs.
Two homebuilders, Lennar (LEN) and KB Home (KBH), will be reporting earnings this week as well as grocer Kroger (KG).
Economic Calendar
- Monday – June Empire State Manufacturing Survey. Earnings: Lennar (LEN)
- Tuesday – May U.S. Retail Sales. Earnings: KB Home (KBH)
- Wednesday – Markets closed in observance of Juneteenth.
- Thursday – Initial Jobless Claims, June Philadelphia Fed Manufacturing Survey. Earnings: Kroger (KR).
- Friday – June Flash S&P U.S. Manufacturing and Services PMI.
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Last Week‘s Daily Trading Recap…
Monday – Dow +69 to 38,868, Nasdaq +59 to 17,192 (record close), S&P +13 to 5,360 (record close), USD10Y +3.9bp to 4.469%.
- Eight of eleven S&P sectors traded higher today, led by Utilities, Energy and Communication.
Tuesday – Dow -120 to 38,747, Nasdaq +151 to 17,343 (record close), S&P +14 to 5,375 (record close), USD10Y -6.5bp to 4.404%.
- Nine of eleven S&P sectors traded down today, led lower by Financials, Utilities, and Industrials and yet both the S&P and the Nasdaq set new record highs.
- Apple jumped +7.26% to close at a record high after unveiling AI features at its developer conference including an overhaul of its voice assistant Siri and integration with OpenAI’s ChatGPT. Of course, the new features will only be available on new phones which the Street believes will drive another upgrade cycle from consumers.
- Oracle (ORCL) missed both revenue and earnings estimates but traded up +9.46% post close after announcing that their databases will be available on Google’s cloud in November.
Wednesday – Dow -35 to 38,712, Nasdaq +264 to 17,608 (record high), S&P +45 to 5,421 (record high), USD10Y -10.9bp to 4.295%.
- Seven of eleven S&P sectors traded higher today, led by Technology, Industrials and Consumer Discretionary.
- The May Headline Consumer Price Index (CPI) was flat month-over-month vs expectations of +0.1% and vs last month’s +0.3% print. Year-over-year CPI fell to +3.3% vs 3.4% expected.
- May Core CPI also beat expectations at +0.2% vs last month’s print and expectations of +0.3%. Year-over-year Core CPI fell to +3.4% vs +3.5% expected and vs +3.6% last month.
- As expected, the Fed kept rates unchanged and noted that while “modest” progress continues to be made against inflation, the committee was not confident enough to cut rates at this time. Further, the Fed’s new dot plot chart shows only one expected rate cut for 2024.
- Broadcom (AVGO) beat their earnings and revenue expectations, raised 2024 revenue guidance, and announced a 10-1 stock split; AVGO traded up +14.62% post close.
Thursday – Dow -65 to 38,647, Nasdaq +59 to 17,667 (record high), S&P +12 to 5,433 (record high), USD10Y -5.7bp to 4.238%.
- Seven of eleven S&P sectors traded down today, led lower by Communication Services, Energy, and Industrials.
- Jobless claims rose to 242,000, (the most since July of 2023) vs 225,000 forecast and vs. last week’s print of 229,000.
- The May Headline Producer Price Index (PPI) fell month over month by -0.2% vs expectations of +0.1% and vs last month’s +0.5%. Year-over-year PPI fell to +2.2% vs +2.3% last month.
- May Core PPI also beat expectations and last month’s number at +0.2% vs +0.3%. Year-over-year Core PPI fell from last month’s +2.4% print to +2.3%.
- Adobe (ADBE) beat Street estimates and guided higher; ADBE traded up +14.83% post close.
- Tesla (TSLA) shareholders voted to approve CEO Elon Musk’s $56 billion pay package though the matter remains subject to court approval.
- “Roaring Kitty” posted another screenshot of his GME position today which showed that he had increased his holdings of GameStop from 5 million shares to 9 million, has $6 million in cash on hand, and had disposed of his 120,000 GME June 21 call options; GME popped +14.38% today.
Friday – Dow -57 to 38,589, Nasdaq +21 to 17,133 (record high), S&P -2 to 5,431, USD10Y -2.5bp to 4.213%.
- Eight of the eleven S&P sectors traded down today, led lower by Industrials, Materials, and Energy.
If you know of any friends or family members who could benefit from our services and these types of communiques, we are accepting new clients and offer a complimentary one-hour review.
Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities/assets…Bitcoin, Cardano, Chainlink, Ethereum, ACHR, AVGO, BITB, ETHE and GBTC.