Welcome to your weekly trading preview! Before we get started, check out:
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Use the Table of Contents to jump around:
This Week's Trading Calendar
If you want to view or download this week's calendar, check click the image below:
Week Review: Nvidia Dominates!
You guessed it! This week was all about Nvidia's (NVDA) shocking earnings beat and guidance, which sent tech and especially semiconductors screaming higher.
The QQQ's rose 3.4% for the week:
(data as of 2:23 p.m. Friday)
Year-to-date, the QQQ's are up a ridiculous 30.7% thanks to the brutal strength in large-cap tech stocks.
17 stocks in the Nasdaq 100 (the index upon which QQQ is based on) are up more than 40% year-to-date.
And year-to-date Nvidia is the #1 stock in the S&P 500, Nasdaq 100, and the SMH ETF. (more on this below
In economic news, the big story was Friday's Core PCE Index, which is the Fed's preferred inflation indicator.
The number came in hot, which had some folks worrying about early Friday morning.
The worries didn't last with stocks powering higher into the close.
Now let's look forward to next week.
Jobs Data Is on the Way
We have some important US economic data reports on tap including:
- Tuesday: S&P/CS Home Prices, CB Consumer Confidence
- Wednesday: Chicago PMI, FOMC’s Harker Speaks, Beige Book, API Crude Stocks
- Thursday: ADP Employment, Jobless Claims, Nonfarm Productivity, ISM Manufacturing PMI, Crude Oil Inventories, FOMC’s Harker Speaks
- Friday: Nonfarm payrolls, Baker Hughes Rig Count
The biggie this week is the nonfarm payrolls report. Despite lots of headlines about layoffs, the labor market has remained strong in recent months.
As of Friday afternoon, traders are pricing in a 66.5% probability of a 25bps June rate hike, up from just 17.4% one week ago.
And overseas, we get:
- Monday: BRL Focus Market Readout, NZD Building Consents, JPY Job/Applications ratio, AUD Building Approvals
- Tuesday: CHF GDP, ES CPI, JPY Industrial Prod. & Retail Sales, AUD CPI, CNY PMI
- Wednesday: CHF Retail Sales, FRA CPI & GDP, DE Unemployment & CPI, BRL Unemployment, CAD GPI, AUD Retail Sales, CNY Caixin PMI
- Thursday: DE Retail Sales, ES/ITA/DE/FRA PMI, EU CPI, EU Unemployment, KRW CPI
- Friday: ES Unemployment, BRL Inflation
(don't forget the market is closed on Monday May 29 for Memorial Day)
Earnings: Life After Nvidia?
Nvidia (NVDA) was the start of earnings season, but pay attention because we've got some big ones this week, like:
- Tuesday: HP Inc. (HPQ) U-Haul (UHAL), Ambarella (AMBA)
- Wednesday: Salesforce.com (CRM), Crowdstrike (CRWD), Chewy (CHWY), Kroger (KR), Advance Auto Parts (AAP), C3.ai (AI)
- Thursday: Dollar General (DG), Macy's (M), Broadcom (AVGO), Lululemon (LULU), MongoDB (MDB), Zscaler (ZS)
This looks like a random grab-bag, but we could see some fireworks.
Cloud security play Zscaler (ZS) is the second-best performing Nasdaq 100 stock in May -- performing even better than Nvidia.
Broadcom (BRCM) will be watch just because semiconductor stocks have been on fire -- and not just Nvidia. Marvel (MRVL) was up nearly 30% on Friday after earnings, and 7 of the 25 stocks in the SMH ETF are up more than 20% In May.
Salesforce.com (CRM) and MongoDB (MDB) will give us insights on enterprise tech trends, while the retailers like Kroger (KR) and Macy's (M) should give us more consumer insights.
But the star of the week might be C3.ai (AI) on Wednesday, which has been rallying hard on the AI craze. Can they pull an Nvidia? We're about to find out.
AI: The Earnings Season Craze
According to Factset, 110 companies in the S&P 500 used the term "AI" during their Q1 earnings calls.
That's up from 78 last quarter.
And as far as earnings season goes, things have been better than expected (though not great).
97% of S&P 500 companies have reported, and:
- 78% of companies beat EPS estimates
- 76% of companies have beaten revenue estimates.
- Earnings have declined by -2.1% vs. expectations for a -6.7% decline
Traders Are in a Rotten Mood Despite the Market's Resilience
Investors and traders remain bearish despite the market's strength this year.
According to AAII, just 27.4% of investors are bullish.
That's up from last week's 22.9% reading but well below the long-term average of 37.5%.
39.7% of investors are bearish, and AAII said "Bearish sentiment is above its historical average of 31.0% for the 74th time out of the past 79 weeks."
The Best Stocks & ETFs of 2023
For fun, let's look at the top 20 stocks of 2023:
As we discussed, Nvidia (NVDA) is on top by a country mile.
Even #2 Meta's (META) 118% gain is way behind.
Now let's move onto ETFs:
Thanks to Nvidia (NVDA), Marvel (MRVL), and other semi names, the SMH ETF is now up a whopping 45% year-to-date
The broader XLK and QQQ ETFs are up big but well-behind.
And while the ARKK ETF is up big this year with a 25.7% gain, fund head Cathie Wood came under fire for dumping Nvidia (NVDA) right before this year's historic 160% run.
Factoid of the Week: Nvidia Is CHEAP?
Want to know how big Nvidia's guidance was?
So big that the consensus FY2024 revenue forecast rose by 41% in two days.
And analyst raised their earnings estimates by 70%.
These increases are so big that based on forward earnings estimates, Nvidia is the cheapest it's been since January. (we're not making a stock recommendation here...)
Get to Know Kira Turner
Learn more about Kira Turner of T3 Live's Inner Circle.