Welcome to your weekly trading preview!
Before we get started, check out:
- Coming Soon: Derrick Oldensmith on Conversations With a Pro Trader
- Save 40% with T3's Memorial Day Sale
- T3's Inner Circle Community - where you want to be if you trade Nvidia
Use the Table of Contents to jump around:
Nvidia Week! This Week's Trading Calendar
Yes, we know you're pumped for Nvidia's (NVDA) earnings report Wednesday, but click the calendar image to see what else is on tap:
Tech Is on the Warpath!
What a week! We just saw:
- Retailers like Walmart (WMT), Target (TGT), and Foot Locker (FL) warning about the outlook for consumer spending
- A huge tech stock rally led by momentum names like Nvidia (NVDA) and AMD (AMD)
- Elon Musk scoring major wins on Tesla's (TSLA) Investor Day and his interview with CNBC's David Faber
Here's a look at the four horseman ETFs:
(data as of 3 p.m. Friday)
Year-to-date, the QQQ's are still crushing the other big ETFs thanks to giant rallies in names like Apple (AAPL), Microsoft (MSFT), and Google (GOOGL).
Now let's look forward to next week.
US Economic Data
We have some important US economic data reports on tap including:
- Tuesday: New Home Sales, Manufacturing & Services PMI's
- Wednesday: FOMC Meeting Minutes
- Thursday: GDP, Jobless Claims, Pending Home Sales
- Friday: Durable Goods Orders, Core PCE Price Index
The biggie this week is that Core PCE Price Index because the Fed watches it closely as an inflation barometer.
As of Friday afternoon, traders were pricing in a 17.4% probability of a June rate hike, up from 10.7% two weeks ago thanks to recent economic reports showing some inflationary pressure.
And overseas, we get:
- Monday: Japan Services PMI, Brazil Focus Market Readout
- Tuesday: France/Germany/England PMI's, New Zealand Rate Decision
- Wednesday: England CPI & PPI, ECB Policy Meeting, South Africa CPI, Germany Business Expectations
- Thursday: Germany GDP, South Africa Rate Decision, Japan CPI, Australia Retail Sales
- Friday: England Retail Sales, Switzerland Employment
Nvidia Earnings Time!
Earnings season is coming to a close, but we have some important reports next week, topped by chipmaker Nvidia (NVDA).
- Monday: Zoom (ZM), Nordstrom (JWN)
- Tuesday: Intuit (INTU), Lowe's (LOW), Palo Alto Networks (PANW)
- Wednesday: Nvidia (NVDA), Analog Devices (ADI), Snowflake (SNOW)
- Thursday: Costco (COST), Medtronic (MDT), Netease (NTES), Workday (WDAY), Autodesk
- Friday: VMWare (VMW), Buckle (BKE)
Yes, we'll hear a lot about the consumer from Costco (COST) and Lowe's (LWO), but we all want to know about Nvidia.
Here's a few fun facts of which you may not be aware:
- Semiconductors is the #1 sector of 2023 with a 31%+ gain for the SMH ETF
- Nvidia is the #1 performer in the SMH ETF this year with a 114% gain
- Nvidia is the #1 performer in the S&P 500 Index
- Nvidia is the #1 performer in the Nasdaq 100 Index
So everyone wants to see if this mega stock can keep the momentum up.
As far as we're concerned, THIS is the event of earnings season. Sorry Apple...
By the way, if you want to trade Nvidia before or after the report, check out the Inner Circle VTF® - our team is very active with Nvidia and its rival AMD (AMD).
Earning Season... Not Good But Not a Disaster Either
As we noted last week, earnings season is pretty strong relative to expectations.
According to FactSet, 95% of S&P 500 companies have reported, and so far:
- 78% of companies beat EPS estimates
- 76% of companies have beaten revenue estimates.
- Earnings have declined by -2.2% vs. expectations for a -6.7% decline
So earnings are lousy but better-than-expected.
Which is why the market's been up this year.
Traders Are in a Rotten Mood Despite the Market's Resilience
Investors and traders remain remarkably bearish despite the market's stability.
According to AAII, just 22.9% of investors are bullish.
AAII says "Optimism reverted to an unusually low level and is at a seven-week low. Bullish sentiment is unusually low for the 51st time out of the past 72 weeks."
So even with tech stocks blasting higher and a better-than-expected earnings season, traders are still in a bad mood.
The debt ceiling standoff, concerns over the Fed, and the regional banking mess are still weighing on traders' and investors' minds.
Tech Leads the Way, All the Way
It's the same old story.
Tech is crushing everything in 2023, and housing stocks are posting big gains, looking past what looks like the most obvious slowdown in history.
Meanwhile, energy and financials are drags.
Factoid of the Week: Carvana Is a Monster
Looking for the short squeeze of the year?
Look no further than Carvana (CVNA) -- supposed victim of the soft used car market:
Carvana has the highest short interest of any stock with a $500 million+ market cap... and it's up 144.5% this year.
Other big short squeeze: C3.ai (AI), and Bitcoin plays Mara (MARA), and Microstrategy (MSTR).
Get to Know Scott Redler
Learn more about our Chief Strategic Officer Scott Redler: