Mon. 05/23/2022 – DIA 318.89 +2.07%, QQQ 293.48 +1.66%, SPY 397.05 +1.90%, IWM 178.23 +1.22% CNN Fear & Greed Index @14 (Extreme Fear)
There was no high-impact data released on the day. Equity markets opened higher from the previous close and advanced until mid-day when a trading range developed. Volatility declined in the session. Financial Services (XLF) 33.99 +3.25% performed best. Leading the DJIA was JPMorgan (JPM) 124.60 +6.19%, which hosted an investor day conference, where Jamie Dimon presented his take on the industry and the economy. Credit card firm Visa (V) 207.56 +4.29% took the second spot in the index. Energy Services (XLE) 84.20 +2.69% took the second-best spot in the 11 S&P 500 economic sectors, with APA Corporation (APA) 44.15 +5.98%, and Schlumberger (SLB) 43.81 +6.54% the sector standouts. Consumer Discretionary (XLY) 141.46 + .75% brought up the rear in sector performance; High-end apparel retailer Ralph Lauren (RL) 90.95 -2.46% slumped. On a rebound from the previous week’s earnings-related sell-off, apparel retailer Ross Stores (ROST) 78.75 +9.57% outperformed. In potential M&A, VMware (VMW) 119.43 +24.78% bolted higher on reports that Broadcom (AVGO) 526.30 -3.10% was in talks to acquire the firm for $60B. In the day’s big disappointment, Carvana (CVNA) 30.24 -9.92% slumped on a negative article on the company in Forbes magazine.

Tuesday 05/24/2022 – DIA 319.39 +.17%, QQQ 287.24 -2.13%, SPY 393.89 -.76%, IWM 175.57 -1.48% CNN Fear & Greed Index @12 (Extreme Fear)
New Home Sales for April (MoM) had a surprise decline to 591K from the expected 750K. The S&P Global Manufacturing PMI came as expected at 57.5, while the S&P Global Services PMI disappointed at 53.5 vs. 55.2. Interest rates declined on the data; the 10-Year Note (yield) index dropped to 27.60 -.99. Equity markets opened lower than the previous session’s closing levels. Communication Services (XLC) 56.80 -3.55% was the weakest S&P 500 economic sector from the start as Snap, Inc. (SNAP) 12.79 -43% fell on its earnings release from the previous evening. The social media firm warned that revenue from advertising was being impacted by the current macro-economic environment more than expected. Technology Services (XLY) 137.82 -2.57% was the second worst-performing sector. Diabetes diagnostics firm Dexcom (DXCM) 288.13 -11.05% slumped on reports the firm was in talks to acquire another Diabetes device company Insulet Corporation (PODD) 217.83 +7.38%. In a show of the defensive nature of the day’s trading, Consumer Staples (XLP) 73.34 +1.64% caught buying interest to lead the S&P 500 economic sectors: Phillip Morris (PM) 106.62 +3.61% and Campbell Soup (CPB) 47.76 +3.47% both advanced showing leadership within the sector. On investor worries of an imminent recession, travel & entertainment, and gaming stocks were under pressure during the session; Walt Disney (DIS) 101.59 -4.01% was the standout laggard in the DJIA, while Norwegian Cruise Lines (NCLH) 13.29 -11.99%, Caesars Entertainment (CZR) 43.14 -10.59%, Carnival Cruise Lines (CCL) 11.76% -10.30%, Royal Caribbean (RCL) 49.73 -10.20%, and Penn National Gaming were clear underperformers in the S&P 500.

Wednesday 05/25/2022 –DIA 321.28 +.59%, QQQ 291.26 +1.4%, SPY 397.37 +.88%, IWM 178.73 +1.80% CNN Fear & Greed Index @13 (Extreme Fear)
Durable Goods Orders for April reported weaker at +.4% vs. +.6% expected. Ex-Defense, they were much softer at +.3% vs. 1.0%. Ex- Transportation was also relatively weak at +.3% vs. +.6%. Equity markets opened even to slightly higher and built strength through the morning and early afternoon, ahead of the FOMC minutes release at 2 PM EDT. The market advanced post-release as traders and analysts viewed the statement bullishly about the FOMC’s balance sheet management and, specifically, the mortgage portion of the portfolio. Consumer Discretionary (XLY) 141.71 +2.82% led the 11 S&P 500 economic sectors, followed by Energy Services (XLE) 85.99 +2.07%. American Express (AXP) 160.51 led the 30 stock DJIA, followed by Boeing Aircraft (BA) 122.06 +2.23%. Two former pandemic lockdown favorites led the NDX100 index, video conference call provider Zoom, Inc. (ZOOM) 102.34 +8.48%, and legal document software provider DocuSign (DOCU) 77.70 +8.32% both rebounded. In a case of selling in anticipation of bad news and buying the fact, Consumer electronics retailer Best Buy (BBY) 80.06 +8.97% topped the S&P 500. The firm reported an earnings miss and gave a downbeat outlook.  Carvana (CVNA) 30.96 +16.17% bounced to lead the R1000 index, followed by Nordstrom, Inc (JWN) 23.58 +14.02%, which reported a solid quarter and upbeat guidance. The day’s disaster was 2U Inc. (TWOU) 8.70% -17.92%, the educational technology shares declined on a downgrade by Piper Sandler.

Thurs. 05/26/2022 – DIA 326.45 +1.61%, QQQ 299.33 +2.77%, SPY 405.31 +2.00%, IWM 182.72 +2.23% CNN Fear & Greed Index @17 (Extreme Fear)
Gross Domestic Product Annualized for Q1 (Preliminary) showed a greater contraction than expected      -1.5% vs. -1.3%. Pending Home Sales dropped more than expected -3.9% vs. -2%. Core Personal Expenditures (QoQ) Q1 (Preliminary) was slightly softer, 5.1% vs. 5.2%. Equity markets were under pressure in the pre-market trading but lifted as the economic data was released. From the opening of regular trading, stocks moved higher and were in a significant rally attempt by the end. Consumer Discretionary (XLY) 148.66 +4.90% led the 11 S&P 500 economic sectors, followed by Communication Services (XLC) 58.96 +2.43%. Discount retailer Dollar Tree (DLTR) 162.80 +21.87% exploded higher on its earnings, beating on the top and bottom line and giving an upbeat outlook. The shares had plummeted in the previous week in a sympathetic reaction to other retailers’ earnings disappointments. Discount retailer Dollar General (DG) 222.13 +13.71% also beat on earnings and raised guidance as shoppers sought out better deals. Also, in consumer discretionary, department store chain Macy’s (M) 22.92 +19.31% beat on earnings and raised its 2022 view. Travel, entertainment, and media shares rebounded, Norwegian Cruise Lines (NCLH) 15.39 +12.09%, Caesars Entertainment (CZR) 51.02 +9.96%, Royal Caribbean (RCL) 55.53 +8.69%, Carnival Cruise Lines (CCL) 13.21 +8.46%, Wynn Resorts (WYNN) 64.43 +7.89%, and MGM Grand (MGM) 34.48 +7.45% all moved higher on the better consumer data. On continued selling pressure, consumer staples producer Kraft Heinz (KHC) 37.07 -7.05% fell on a downgrade by UBS from “Neutral” to “Sell.”

Friday 05/27/2022 – DIA 332.07 +1.72%, QQQ 309.10 +3.26%, SPY 415.26 +2.45%, IWM 187.64 +2.69% CNN Fear & Greed Index @21 (Extreme Fear)
Personal Income for April (MoM) came a tick lower than expected, +.4% vs. +.5%. Personal Spending was higher than anticipated, +.9% vs. .7%. The Michigan Consumer Sentiment Index for May was lower than expected at 58.4 vs. 59.1. Equity markets gapped higher and continued a decisive advance throughout the session. Consumer Discretionary (XLY) 153.76 +3.43% led the S&P 500 sectors in the continuing rally. Apple Inc (AAPL) 149.64 +4.08% led the 30 stock DJIA. Chinese internet retailer Pinduoduo (PDD) 48.30 +15.19% led the NDX100 after reporting a beat on revenue, earnings, and gross margins. Cloud security provider Zscaler (ZS) 160.00 +12.57% beat on revenue and earnings while raising full-year guidance. Leading the S&P 500 index, specialty retailer Ulta Beauty (ULTA) 425.08 +12.47% reported better than expected earnings and revenue with an improved outlook. In the day’s disaster for investors, Iovance Biotherapeutics (IOVA) 7.02 -53.57% plunged after disclosing data on a crucial Melanoma drug trial.

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