Markets Close in on Record Highs, Inflation Data Awaits – May 10 Market Recap
Indices
- Dow 39,511, +836 or +2.16%.
- Nasdaq 16,340, +184 or +1.14%.
- S&P 5,222, +95 or +1.85%.
- MSCI EAFE 2346.16, +36.67 or +1.59%.
- USD10Y 4.503%, +0.3bp or +0.07%.
- WTI Crude $78.20 bbl, +$0.07 or +0.09%.
Markets Close in on Record Highs, Inflation Data Awaits
Despite very few data points last week, markets rallied on a higher-than-expected Initial Jobless Claims report and a poor May Preliminary Consumer Sentiment report on Friday. This is the classic “bad news is good news for the markets” paradigm that appears from time to time. With last week’s rally, markets have recovered from the disappointment with the delay and reduction of interest rate cuts and all three indices are now within 1% of their record highs. However, next week’s CPI, PPI, and Retail Sales reports will determine the direction of the markets.
This Week: May 13 – May 17
Even as earnings tail off, it’s another important week for proof that the Federal Reserve’s battle against stubborn inflation is making progress. Both wholesale and retail price indices will be released on Tuesday and Wednesday respectively. April Retail Sales will also be closely watched on Wednesday. Manufacturing data from the East Coast will be forthcoming on Wednesday and Thursday. Earnings are highlighted by Home Depot (HD), Walmart (WMT), and Applied Materials (AMAT).
Economic Calendar
- Monday – N/A. Earnings: N/A.
- Tuesday – April Producer Price Index. Earnings: Home Depot (HD).
- Wednesday – April Consumer Price Index., April Retail Sales, May Empire State Manufacturing Survey. Earnings: Cisco Systems (CSCO).
- Thursday – Initial Jobless Claims, Philadelphia Federal Manufacturing Survey. Earnings: Walmart (WMT), Applied Materials (AMAT).
- Friday – April U.S. Leading Economic Indicators. Earnings: N/A.
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.
Last Week‘s Daily Trading Recap…
Monday – Dow +176 to 38,851, Nasdaq +192 to 16,349, S&P +52 to 5,180, USD10Y -1.1bp to 4.489%.
- Ten of eleven S&P sectors traded higher today, led by Technology, Communication Services, and Financials.
- Earnings: Tyson Foods (TSN) missed their revenue numbers but beat their earnings expectations; TSN traded down –5.68%. Lucid Auto (LCID) beat their revenues and reaffirmed 2024 production guidance of 9,000 vehicles yet still sold off -7.87% in the extended session. Palantir Technologies’ (PLTR) earnings were in line with better-than-expected revenues, but the software company guided full-year revenues lower; PLTR traded down -8.37% post close.
Tuesday – Dow +32 to 38,883, Nasdaq -16 to 16,332, S&P +7 to 5,187, USD10Y -2.6bp to 4.463%.
- Eight of eleven S&P sectors traded higher today, led by Materials, Utilities, and Consumer Staples.
- Minneapolis Fed President Neel Kashkari stated that he thought the Fed would not cut rates in 2024 due to inflation intransigence and wouldn’t rule out another rate hike.
- Earnings: Walt Disney (DIS) beat earnings estimates, fell just short on revenues and guided their fiscal third quarter revenues lower; DIS traded down –9.51%. Reddit (RDDT) lost less than expected on better revenues and guided Q2 revenues higher; RDDT traded up +14.7% post close. Rivian (RIVN) beat revenue expectations, reiterated 2024 production levels, cut capital expenditures by $550 million and traded down 5.56% in the extended session. Toast (TOST) lost a penny more than expected on better revenues and guided higher; TOST traded up +5.35% after the close. Ferrari (RACE) missed on earnings, beat on revenues, reaffirmed full year guidance, and traded down -6.23%.
Wednesday – Dow +172 to 39,055, Nasdaq -29 to 16,302, S&P -17 to 5,188, USD10Y +3.8bp to 4.501%.
- Earnings: Uber (UBER) beat revenues but missed their earnings expectations. Airbnb (ABNB) beat both their revenue and earnings estimates but guided scond quarter revenues lower. AMC Entertainment (AMC) reported in line with estimates. Robinhood (HOOD) handily beat their estimates but received a SEC Wells regarding their cryptocurrency business.
Thursday – Dow +331 to 39,386, Nasdaq +43 to 16,345, S&P +26 to 5,214, USD10Y -4.0bp to 4.461%.
- Jobless rose to 231,000 vs 212,000 forecast and vs. last week’s slightly revised higher print of 209,000 (originally 208,000).
Friday – Dow +125 to 39,511, Nasdaq -5 to 16,340, S&P +8 to 5,222, USD10Y +4.2bp to 4.503%.
- Six of the eleven S&P sectors traded higher today, led by Consumer Staples, Technology, and Financials.
- May Preliminary Consumer Sentiment missed at 67.4 vs 76 expected and vs 77.2 last month.
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.