Monday, May 30, 2022 – Markets were closed for Memorial Day.
Tuesday, May 31, 2022 – DIA 330.20 -.56%, QQQ 308.28 -.27%, SPY 412.93 -.56%, IWM 185.31 -1.24% CNN Fear & Greed Index @22 (Extreme Fear)
The Housing Price Index for March (MoM) was lower than expected, +1.5% vs. +1.8%, but the S&P/Case-Shiller Home Price Index for March (YoY) was ahead of expectations, +21.2% vs. +20%. The Chicago Purchasing Managers Index was stronger than expected, 60.3 vs. 55. Fed Chairman Powell met with President Biden during the day. Markets opened lower and began a choppy session consolidating the previous week’s gains. Consumer Discretionary (XLY) 154.54 +.51% was the best performing S&P sector. Basic Materials (XLB) 86.03 -1.52% was the worst-performing, followed by Energy Services (XLE) 87.20 -1.50%. Apparel and lifestyle brand Nike (NKE) 118.85 +2.47%, and entertainment company Disney (DIS) 110.44 +1.02% led the DJIA, while Salesforce.com (CRM) 160.24 -2.94% was the laggard in the averages, ahead of its post-market earnings release. Chinese internet retail firm JD.com (JD) 56.12 +4.55% led the NDX100 higher as China moved to lift COVID lockdowns. Pinduoduo (PDD) 50.35 +4.24% also fared well on the news. Diagnostic & research company Ilumina (ILMN) 239.48 -7.20% was the poorest performer in the index. Fertilizer and agricultural inputs company Mosaic (MOS) 62.65 +4.68% led the S&P 500, while Amazon (AMZN) 2404 +4.40% took second place. The big downside stock disappointment was internet car dealer Carvana (CVNA) 29.44 -13.03%, which continued to come under selling pressure.
Wednesday, June 1, 2022 – DIA 328.36 -1.84%, QQQ 306.00 -.74%, SPY 409.59 -.81%, IWM 184.26 -.57% CNN Fear & Greed Index @25 (Extreme Fear)
The ISM Manufacturing PMI was above expectations at 56.1 vs. 54.5. The Manufacturing Employment Index for May was negative. The index was reported at 49.6, way below the 53.6 expected. ISM New Orders Index was better than expected at 55.1 vs. 53.6. Markets were weak for a second day. Interest rates increased with the 10-Year Note (yield) Index (TNX) 29.31 +.87, climbing closer to the much-watched 3% level. During the regular session, JPMorgan chief Jamie Dimon commented that the economy may be in for a financial hurricane and advised people to “Brace Yourself.” Energy Services (XLE) 88.62 +1.63% was the only positive S&P 500 sector, with Baker Hughes (BKR) 37.41 +3.97%, Hess (HES) 127.45 +3.56%, ConocoPhillips (COP) 115.75 +3.02%, and Valero (VLO) 132.55 +2.28% showing good performance. Salesforce.com (CRM) 176.07 +9.88% led the DJIA and the S&P 500 after beating on earnings and margins while raising guidance. Walmart (WMT) 125.45 -2.47% continued its recent underperformance in the DJIA. Economically sensitive stocks such as lithium producer Albermarle (ALB) 240.12 -7.80% came under selling pressure on the Jamie Dimon comments. Carvana (CVNA) 26.49 -10.02% was hit once again.
Thurs., June 2, 2022 – DIA 332.77 +1.34%, QQQ 314.38 +2.74%, SPY 417.34 +1.89%, IWM 188.71 +2.42% CNN Fear & Greed Index @28 (Fear)
The ADP Employment Change release came weaker than expected, with just 128K jobs created vs. the 300K expected. Initial Jobless claims came in slightly better than expected, +300K vs. 210K. Non-Farm Productivity was reported slightly better at -7.3% vs. -7.5%. Consumer Discretionary (XLY) 157.61 +3.06% led the 11 S&P 500 sectors on a reaction to the data, followed by Basic Materials (XLB) 87.52 +2.76%. Microsoft (MSFT) 274.65 + 1.71% lowered its fourth-quarter guidance; the shares initially traded deep into negative territory on the news, but in a sign of a reversal in market sentiment, the stock closed positive for the day. Boeing (BA) 140.50 +7.54% led the DJIA with Salesforce.com (CRM) 188.40 +7.00% in second place. Data analytics and software provider Datadog (DDOG) 110.08 +12.90% led the NDX100, followed by Okta, Inc. (OKTA) 93.68 +10.96%, the identity security software developer reported a loss but an increase in subscription revenue. In the S&P 500, Generac Holdings (GNRC) 268.95 +10.29% announced an expansion of a collaboration of a subsidiary with German utility RWE AG. In a sign of a continued rotation out of safe-haven plays by asset managers, food processor Hormel (HRL) 45.76 -5.22% beat on earnings but continued its marked downtrend, Campbell’s Soup (CPB) 45.75 -2.66%, and Kraft Heinz (KHC) 36.39 -2.31% moved lower as well.
Friday, June 3, 2022 – DIA 329.35 -1.03%, QQQ 306.20 -2.60%, SPY 410.54 -1.64%, IWM 187.06 -.90% CNN Fear & Greed Index @27 (Fear)
Nonfarm Payrolls were reported at 390K vs. 325K expected. The ISM Services Employment Index for May was weaker than expected at 50.2 vs. 51.7. The ISM Services PMI registered at 55.9 vs. 56.4 expected. The Labor Force Participation Rate for May was reported as expected at a modest 62.3%. The Unemployment Rate for May was just slightly higher than expected at 3.6% vs. 3.5%. The U6 Underemployment rate for May ticked up to 7.1% vs. the prior 7% and the 6.9% expected. Equity markets moved lower due to the stronger than expected jobs data on concerns about the inflationary effects of the tight job market and prospects for future Fed monetary policy. 10 of the 11 S&P 500 economic sectors were down by the close. The only sector buoyant was Energy Services (XLE) 89.51 +1.32%, as WTI Crude 120.38 +3.51% continued to advance on a bullish backdrop of demand increases from China as virus lockdowns have started to end. Consumer Discretionary (XLY) 153.00 -2.92% was the worst-performing sector, followed by Technology Services (XLK) 139.99 -2.39%. Heavy machinery manufacturer Caterpillar (CAT) 222.90 +1.32% led the DJIA after BofA Securities lifted the stock’s price target while maintaining a neutral rating. Apple, Inc. (AAPL) 145.38 -3.86% was the biggest detractor in the index, as Morgan Stanley pointed to slower growth in the company’s app store. Leading the NDX100, Okta, Inc. (OKTA) 98.38 +5.02% moved higher. The digital identity data management software developer reported a loss but beat revenue expectations. The largest detractor in the index was Tesla (TSLA) 703.55 -9.22%, as Elon Musk announced the EV maker would be cutting its workforce by 10%. Former pandemic beneficiary, internet craft retailer Etsy, Inc. (ETSY) 80.98 -7.23% was the second-worst performer. One of the session’s largest gainers, Iovance Biotherapeutics (IOVA) 7.85 +18.94%, moved higher after SEC filings were made public on significant insider buying of the shares. Once again, one of the larger disappointments on the day was internet auto retailer Carvana (CVNA) 26.52 -11.84%.
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