Micron Banned in China – So I’m Watching These Levels
SPY cleared $412.87 to see $420.72 Friday. We did well trading for that. Now we’ll see how it tries to digest above $417.35 or if it hits $415 which must hold. QQQ: tech will get tested today after China banned MU memory chips. See how this affects other semi names like AMD and NVDA. See how AAPL handles the early morning weakness. $335.43 is Friday’s low. The must-hold area is closer to $332. MU is in the news with China wanting to ban their memory chips. We’ll see how this plays out the next day or so. See if it holds the $64 area and puts in a low in the first 5-15-30 minutes. Or does it really get pressured? I’d watch it for sentiment. AAPL will be interesting today because of the MU ban in China. If things escalate, AAPL could be a target. We’ll see if it holds the $173 area or if they shake the tree lower. I still have some stock, but I sold my options Friday for a nice gain. AMD had a big move from the $91ish targeted buy area up to $108+. Now see if it can reclaim $104.62 to relieve pressure, or if we see the 8 day closer to the $101.50 area. NVDA has been the best barometer for risk in tech and it’s been full of nice setups to reward traders. For today, see if it can reclaim $309.16 or if it sees a move down towards the 8 day closer to $306. MSFT had a big-time pre and post-earnings move. I did sell mine as it hit $319+. It’s a little extended, but as long as the 8day holds, some active traders will stay long. Friday’s low is $316ish. TSLA was a focus last Wednesday. It was Musk’s first interview in a while. We did get long stock and options near $169.76. It’s acted well since to stay with it. It hit $181.95 Friday to manage. As long as we hold the $177ish area, maybe this starts a better active sequence. Scott Redler Positions Disclosure as of 2023-05-22 at 8.45.40 AM
Continue Reading -->Welcome to Nvidia Week! What’s on Tap May 22-26
Welcome to your weekly trading preview! Before we get started, check out:Coming Soon: Derrick Oldensmith on Conversations With a Pro TraderSave 40% with T3’s Memorial Day Sale T3’s Inner Circle Community – where you want to be if you trade NvidiaUse the Table of Contents to jump around: Table of Contents Nvidia Week! This Week’s Trading CalendarTech Is on the Warpath!US Economic DataNvidia Earnings Time!Earning Season… Not Good But Not a Disaster EitherTraders Are in a Rotten Mood Despite the Market’s ResilienceTech Leads the Way, All the WayFactoid of the Week: Carvana Is a MonsterGet to Know Scott Redler Nvidia Week! This Week’s Trading CalendarYes, we know you’re pumped for Nvidia’s (NVDA) earnings report Wednesday, but click the calendar image to see what else is on tap:Click to enlarge 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 spendingA 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 FaberHere’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 DataWe have some important US economic data reports on tap including:Tuesday: New Home Sales, Manufacturing & Services PMI’sWednesday: FOMC Meeting MinutesThursday: GDP, Jobless Claims, Pending Home SalesFriday: Durable Goods Orders, Core PCE Price IndexThe 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 ReadoutTuesday: France/Germany/England PMI’s, New Zealand Rate DecisionWednesday: England CPI & PPI, ECB Policy Meeting, South Africa CPI, Germany Business ExpectationsThursday: Germany GDP, South Africa Rate Decision, Japan CPI, Australia Retail SalesFriday: 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), AutodeskFriday: 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 ETFNvidia is the #1 performer in the SMH ETF this year with a 114% gainNvidia is the #1 performer in the S&P 500 IndexNvidia is the #1 performer in the Nasdaq 100 IndexSo 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 EitherAs 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 estimates76% of companies have beaten revenue estimates.Earnings have declined by -2.2% vs. expectations for a -6.7% declineSo 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 ResilienceInvestors 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 WayIt’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 MonsterLooking 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 RedlerLearn more about our Chief Strategic Officer Scott Redler:
Continue Reading -->Coffee With Greta: Awaiting Powell
DJIA Futures: +101 (+0.3%) SPX Futures: +13 (+0.3%) NASDAQ Futures: +10 (+0.1%) Good morning friends! Futures are rising as traders look ahead to a speech by the Fed Chair today. Let’s get right to it! Powell On Deck Traders are awaiting a speech by Fed Chair Jerome Powell at 11:00 a.m. ET today. Powell will participate in a panel discussion alongside former Fed Chair Ben Bernanke at the Thomas Laubach Research Conference. The market is focused on this speech after two Fed officials seemed to put their support behind a June rate hike on Thursday. Dallas Fed President Lorie Logan said in a speech, “We haven’t yet made the progress we need to make. And it’s a long way from here to 2 percent inflation.” St. Louis Fed President James Bullard later today the Financial Times, “I do expect disinflation, but it’s been slower than I would have liked, and it may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control.” Bullard added, “Our main risk is that inflation doesn’t go down or even turns around and goes higher, as it did in the 1970s.” CME Group’s FedWatch Tool still shows 64.4% of traders betting on no rate hike at the June 14 meeting. Foot Locker Tumbles After Earnings Miss Foot Locker (FL) shares are plunging 26.2% ahead of the open after missing Q1 expectations and cutting its full-year outlook. Here’s how the shoe retailer’s results compared to analysts’ estimates: EPS: $0.70 vs $0.76 expected Revenue: $1.93 billion vs $1.99 billion Same-store sales dropped 9.1% year over year vs the 7.7% decline expected. Foot Locker now expects full-year EPS of $2 to $2.25, down from $3.35 to $3.65 previously. The company also expects full-year sales to fall 6.5% to 8% vs 3.5% to 5.5% previously. The CEO said, “Our sales have since softened meaningfully given the tough macroeconomic backdrop, causing us to reduce our guidance for the year as we take more aggressive markdowns to both drive demand and manage inventory.” Deere Jumps On Earnings Beat Deere & Co (DE) shares are rising 3.4% in premarket trade after beating fiscal Q2 expectations on the top and bottom line. Here’s how the company’s results compared to analysts’ estimates: EPS: $9.56 vs $8.58 expected Revenue: $16 billion vs 14.9 billion expected Deere hiked its full-year guidance following the beat. The company now expects net income between $9.25 billion and $9.5 billion this year vs $8.75 billion and $9.25 billion previously. The CEO said, “As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment. Though supply-chain constraints continue to present a challenge, we are seeing further improvement.” In Case You Missed It Existing home sales slowed less than expected in April. The National Association of Realtors reported existing sales fell 3.4% last month to a seasonally adjusted annual rate of 4.28 million units vs 4.26 million expected. Existing sales were down 23.2% year over year. There were 1.04 million homes for sale at the end of the month, up 1% from April 2022 but representing just a 2.9-month supply. The median price of an existing home sold in April fell 1.7% annually to $388,800. The Conference Board’s leading economic indicators index fell 0.6% as expected in April. That was the 13th straight monthly decline, signaling an impending recession. Eight of the 10 indicators included in the index declined. The measure of current economic conditions rose 0.3%.
Continue Reading -->Coffee With Greta: Fed Pause In Question
DJIA Futures: -57 (-0.2%) SPX Futures: -2 (-0.04%) NASDAQ Futures: +5 (+0.04% Good morning friends! Futures are mixed as traders digest hawkish comments from a key Fed official and Walmart’s strong earnings. Let’s get right to it! Dallas Fed President Does Not Support Pause Dallas Fed President Lorie Logan does not believe current data supports a pause in rate hikes at the bank’s next meeting. In a speech prepared for today in San Antonio, Logan said, “The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet.” She is a voting member of the Federal Open Market Committee this year. CME Group’s FedWatch Tool shows traders split about 50/50 on whether the Fed will hold rates steady or implement a 25bps hike at the June 14 meeting. Logan said, “We haven’t yet made the progress we need to make. And it’s a long way from here to 2% inflation.” The Fed’s preferred inflation gauge for April, the core PCE price index, will be released next week. Walmart Jumps After Earnings Beat Walmart (WMT) shares are up 1.4% ahead of the open after beating Q1 expectations on the top and bottom line and hiking its full-year outlook. Here’s how the retailer’s results compared to analysts’ estimates: Adjusted EPS: $1.47 vs $1.32 expected Revenue: $152.30 billion vs $148.76 billion expected Sales rose nearly 8% year over year as strong grocery sales helped offset weaker clothing and electronics sales. Walmart raised its full-year forecast after the beat, now expecting adjusted earnings between $6.10 and $6.20 per share. But its Q2 outlook was a bit weaker than expected. The retailer expects Q2 earnings to range between $1.63 and $1.68 per share vs $1.71 expected. The CFO said they have seen a shift in consumer spending but shoppers remain resilient. He said, “I think that’s in part probably because balance sheets are much stronger than they were pre-pandemic, even at this point.” Bath & Body Works Surges After Q1 Beat Bath & Body Works (BBWI) shares are rallying 12.3% in premarket trade after topping Q1 estimates and raising its full-year guidance. Here’s how the body care retailer’s results compared to analysts’ expectations: EPS: $0.33 vs $0.26 expected Revenue: $1.396 billion vs $1.393 billion expected The CEO said, “We delivered first quarter sales in line with our expectations while our EPS was better than anticipated as we saw benefits from our work to improve merchandise margin as well as early benefits from our cost optimization initiatives.” Bath & Body Works raised its full-year earnings guidance after the beat to between $2.70 and $3.10 vs $2.50 to $3.00 previously. Cisco Drops On Demand Concerns Cisco (CSCO) shares are down 4.5% ahead of the open despite beating fiscal Q3 expectations as concerns mount about demand. Here’s how the company’s results compared to analysts’ estimates: Adjusted EPS: $1.00 vs $0.97 expected Revenue: $14.57 billion vs $14.4 billion expected But orders declined 23% during the quarter, prompting fears about lower demand. For fiscal Q4, Cisco forecast adjusted EPS between $1.05 to $1.07 and revenue growth of 14% to 16%. That was better analysts’ estimates for EPS of $1.04 on $14.95 billion in revenue. The company also raised its full-year profit guidance, expecting adjusted EPS of $3.80 to $3.82. Weekly Jobless Claims Drop Weekly jobless claims fell more than expected last week as the labor market remains strong. The Labor Department reported 242,000 Americans filed initial unemployment claims. That was down by 22,000 from the previous week and lower than 255,000 expected. Continuing claims also fell by 8,000 to 1.799 million in the week ending May 6. Philly Fed Manufacturing Index Improves A key manufacturing gauge shows activity declined for the 9th straight month in May. The Philly Fed’s manufacturing index rose by nearly 21 points to negative 10.4 this month. That was better than expectations for negative 20 but marked the ninth straight negative reading. New orders increased 13.8 points to negative 8.9, the shipments index improved slightly to negative 4.7, and the six-month business outlook fell by 10.3 points to negative 1.5. Coming Up: Existing Home Sales, Leading Economic Indicators The National Association of Realtors reports existing home sales for April at 10:00 a.m. ET. That report is expected to show the pace of sales slowed last month to a seasonally adjusted annual rate of 4.26 million units. The existing home market has remained restricted by low inventory keeping prices high even amid high mortgage rates. The Conference Board also releases its leading economic indicators index for April at 10:00 a.m. That survey is expected to fall 0.6% from March. That would be the 13th straight monthly decline as the index continues to signal a recession is near.
Continue Reading -->Coffee With Greta: Stocks Jump On Debt Ceiling Optimism
Don’t miss my free Q&A event with pro trader Dan Darrow after the market close today. Register now! DJIA Futures: +139 (+0.4%) SPX Futures: +15 (+0.4%) NASDAQ Futures: +29 (+0.2%) Good morning friends! Futures are higher amid hopes for a debt ceiling deal. Let’s get right to it! Debt Ceiling Talks Make Progress House Speaker Kevin McCarthy says debt ceiling talks are making progress and he does not think there will be a default. McCarthy told CNBC today that he was encouraged by President Biden’s willingness to negotiate. He said, “Now [Biden has] finally admitted that we’re going to negotiate and we have a structure to negotiate. The problem is the timeline is very short.” This comes after Biden decided Tuesday to cut his trip to Asia short to return for debt ceiling talks. Talks have been ongoing between Congressional leaders and their staff. House Minority Leader Hakeem Jeffries also told CNBC “I’m optimistic common ground will be found in the next week or two.” Target Tops Q1 Expectations Target (TGT) shares are up 0.7% ahead of the open after topping Q1 expectations on the top and bottom line. Here’s how the retailer’s results compared to analysts’ estimates: EPS: $2.05 vs $1.76 expected Revenue: $25.32 billion vs $25.29 billion expected Revenue rose just 1% year over year while comparable sales were flat. The CEO said shoppers are spending less on discretionary items but Target is still drawing customers into stores with groceries, everyday essentials, and on-trend items. The company said it expects sales to remain sluggish in Q2 and maintained its full-year outlook. Target expects full-year earnings between $7.75 and $8.75 per share. Housing Starts, Building Permits Mixed U.S. new home construction picked up in April as builders continue to see strong buyer demand. The Commerce Department reported housing starts rose 2.2% last month to a seasonally adjusted annual pace of 1.4 million units. That was in line with economists’ expectations but starts were still down 22.3% year over year. Single-family starts rose 1.6% monthly and fell 28.1% annually. Multi-family starts jumped 5.2% monthly and fell 11.7% annually. But building permits fell more than expected in April, down 1.5% to a seasonally adjusted annual rate of 1.42 million units. Single-family permits rose 3.1% monthly and were down 21.2% annually. Multi-family permits dropped 9.7% monthly and 23% annually. Mortgage Demand Drops Mortgage demand dropped last week as rates hit a 2-month high. The Mortgage Bankers Association reported purchase applications dropped 4.8% weekly and 26% year over year. Refinance applications tumbled 8% weekly and 43% annually. The average 30-year fixed contract rate rose to 6.57% from 6.48%. The MBA’s chief economist said, “buyers remain wary of this rate volatility” and “for-sale inventory in many parts of the country remains scarce.” In Case You Missed It Homebuilder sentiment turned positive this month for the first time since July 2022. The National Association of Homebuilders sentiment index rose 5 points to 50 in May. That was better than expectations for the survey to be unchanged at 45. Current sales conditions rose 5 points to 56, the 6-month expectations index rose 7 points to 57, and buyer traffic improved by 2 points to 33. Builders say they are benefiting from low inventory of existing homes for sale with buyers turning to new builds instead.
Continue Reading -->Coffee With Greta: Home Depot’s Consumer Warning
DJIA Futures: -90 (-0.3%) SPX Futures: -9 (-0.2%) NASDAQ Futures: -21 (-0.2%) Good morning friends! Futures are falling after disappointing results from Home Depot prompt worries about the consumer. Let’s get right to it! Home Depot Drops On Revenue Miss, Lower Outlook Home Depot (HD) shares are falling 2.5% ahead of the open after missing Q1 sales expectations and lowering its full-year outlook. Here’s how the home improvement retailer’s results compared to analysts’ estimates: EPS: $3.82 vs $3.80 expected Revenue: $37.26 billion vs $38.28 billion expected It was the company’s largest revenue miss in 20 years and the second quarter in a row it missed sales estimates. Comparable sales dropped 4.6% in the U.S. with the CFO saying lower lumber prices accounted for more than 2% of that drop. Home Depot now expects sales to decline between 2% and 5% in 2023 vs its previous outlook for sales to be flat. The retailer also expects full-year EPS to fall 7% to 13% vs the 5.7% estimate. Retail Sales Rise Less Than Expected U.S. retail sales rose less than expected in April. The Commerce Department reported retail sales rose 0.4% last month to $686.1 billion. That was a rebound from the 0.7% decrease in March but lower than expectations for a 0.8% increase. Total sales were 1.6% higher year over year. Retail sales excluding autos rose 0.4% in April, in-line with expectations. Coming Up: Homebuilder Sentiment The National Association of Homebuilders releases its May sentiment index at 10:00 a.m. ET. That survey is expected to be unchanged from April at 45. Confidence among builders remains in negative territory but has been improving in recent months as the 6-month expectations improve. Builders are looking ahead to lower mortgage rates in the future as the Fed appears to be done with the latest rate-hiking cycle. In Case You Missed It Consumer debt surpassed $17 trillion for the first time in Q1. New data from the New York Fed on Monday showed total borrowing totaled $17.05 trillion in the first three months of the year. New mortgage originations totaled $323.5 billion, the lowest level since Q2 2014 and down 62% year over year. Student loan debt rose to $1.6 trillion while auto loan debt rose to $1.56 trillion. Credit card delinquencies rose to 6.5% while auto loan delinquencies rose to 6.9%.
Continue Reading -->Coffee With Greta: Debt Ceiling Talks Make Progress
DJIA Futures: +58 (+0.2%) SPX Futures: +9 (+0.2%) NASDAQ Futures: +30 (0.2%) Good morning friends! Futures are higher amid optimism over debt ceiling talks. Let’s get right to it! Debt Ceiling Negotiations Continue President Biden is expected to meet on Tuesday with the big four Congressional leaders about the debt ceiling. Sources say there were “productive” staff-level negotiations over the weekend. This comes after Friday’s meeting was postponed in order to provide more time for lower-level talks. The Treasury Secretary says the U.S. is facing a June 1 default deadline to raise the debt limit. Big Retail Earnings Week This will be an important week to help traders gauge the health of the U.S. consumer. Several big retailers are scheduled to report Q1 results this week: Tuesday: Home Depot (HD) Wednesday: Target (TGT) Thursday: Walmart (WMT) These reports will give traders more insight into how consumers have been shifting their spending habits amid high inflation and ahead of an expected recession. Atlanta Fed President Says No Rate Cuts Atlanta Fed President Raphael Bostic says he doesn’t see any rate cuts happening in 2023. Bostic told CNBC this morning, “For me, inflation is job No. 1. We’ve got to get back to our target. If there’s going to be some cost to that, we’ve got to be willing to do that.” He added, “If there’s going to be a bias to action, for me would be a bias to increase a little further as opposed to cut.” But CME Group’s FedWatch Tool still shows the market pricing in as many as 3 cuts by year-end. Empire State Manufacturing Index Plummets A key manufacturing gauge plummeted in May. The Empire State’s manufacturing index plunged 42.6 points to negative 31.8. That was sharply lower than expectations for a reading of negative 5 and reversed the gain seen in April. The shipments index plunged 40.3 points to negative 16.4 and unfilled orders fell 13.2 points to negative 13.2. But the six-month expectations index improved by 3.2 points to 9.8.
Continue Reading -->7 Tech Names to Watch This Week
SPY keeps playing with levels. Last week it couldn’t build on strength and sellers couldn’t keep it below levels. We’ll see how this week starts. $413.64 is Friday’s high. See if it gets and stays above. $414.54 is above. The bears can’t growl so loud this week unless we get a hard close below $408.64. QQQ’s hit a high of $327.17 last week as some specific setups worked. The 8 day is key active support. We’ll see if this sector can keep getting flows. It needs to hold the $322ish area to stay special. Now let’s dig into 7 tech leaders: AAPL continues to digest post-earnings. On Friday if felt vulnerable but it held the earnings gap. If you are super active, make sure it holds $170.76-$171 support. If it doesn’t, it can get choppier and harder to sit with. $174.59 is key active resistance. MSFT remains Very Impressive. Whenever you think it gets vulnerable, it holds the 8 day. It needs to hold the $306 area. If that holds, perhaps it tries to get going again with $313 as pivot resistance. GOOGL was a big focus for us last week. I got big around $107ish and it hit $117.92 Friday. I did sell my stock and switched to some call as it seemed stretched. Loop Capital called it a hold today. Let.s see how it digests. Holding $114.41-$116 would keep momentum. AMZN was another focus for us. I got pretty big in the $105 area and then sold the rest into the $113+ area last week. Now, we’ll see if it can build a bull flag above $109ish to give us more opportunities. META is trying to set up again after hitting a high of $244 a few weeks back. Some are long vs. the $229 gap pivot. If it can get and stay above $238, maybe it gets some active momentum back again. Loop Capital raised it this morning. TSLA couldn’t hold the Friday gains even with Elon saying they will have a new Twitter CEO faster than some thought. I did sell most of mine into the $177 gap fill. Then it failed to hold $174 with a low of $166ish. It’s flattish this morning. It’s hard to tell what’s next. If it breaks and stays below $166ish, the bears will growl loud. I’m just going to watch it for now. NVDA is trying to hold the 8 day. This tech market leader can give clues to the week. It needs to hold the $280 area. Otherwise it can see downside. A move above $292ish tells us we can still have some special moves. Friday’s high is $287ish. Scott Redler Positions Disclosure as of 2023-05-15 at 8.26.28 AM
Continue Reading -->What’s On Tap for Traders: May 15-19
Welcome to your weekly trading preview! Use the Table of Contents to jump around: Table of Contents This Week’s Trading CalendarThe Week in Review…A Busier Stream of Econ DataRetail Earnings TimeSo How Has Earnings Season Been?Traders Are Still in a Bad MoodA Look at Sector Performance in 2023:Factoid of the Week: The Best Traders on Earth are in the US CongressGet to Know JR Romero This Week’s Trading CalendarClick the calendar image to enlarge it, then scroll down to see what’s coming down the pipe the week of May 15: The Week in Review…What a week! We survived:Earnings whiffs from Disney (DIS), PayPal (PYPL), AirBnB (ABNB), Wynn (WYNN)US CPI & PPI reportsA giant pop & drop in Tesla (TSLA) FridayThe major indices were mostly down this week, but the QQQ’s managed to squeeze into the green.(data as of 2 p.m. Friday) And year-to-date, the QQQ’s are still crushing the other big ETFs thanks to huge moves in big tech stocks like Apple (AAPL), Tesla (TSLA), Nvidia (NVDA), and Microsoft (MSFT). Even with Friday’s ugly outside day, it’s been pretty smooth sailing this year:Now let’s look forward to next week. A Busier Stream of Econ DataThe US economic calendar picks up next week with:Monday: NY Empire State ManufacturingTuesday: Industrial Production, Business Inventories, Retail Inventories, Fed’s Williams speaksWednesday: Building Permits, Housing StartsThursday: Jobless Claims, Philly Fed, Existing Home SalesThe big discussion on the Street is whether the Fed can slow the economy without breaking it.So everyone will be watching these reports for a better idea of where the US economy stands.After this week’s light CPI and PPI reports, traders are pricing in a slightly higher probability of a Fed Rate hike at the June 14 meeting.As of Friday afternoon, traders were pricing in a 16.6% probability of a June rate hike, up from 10.7% last week. That’s thanks to this week’s light CPI and PPI reports, which showed continued moderation in inflationary pressures.Only a moron would argue that inflation is low.But it is less awful.And overseas, we get:Monday: Switzerland PPI, Canadian Housing Starts & Whole Sale Sales, China Industrial Production & UnemploymentTuesday: Great Britain Employment, EU GDP, Italy CPI, Canada CPI, Japan GDPWednesday: EU CPI, Japan Industrial Production, New Zealand PPI, Australia EmploymentThursday: Canada Housing Prices, Japan CPIFriday: Germany PPI, Canada Retail sales Retail Earnings TimeEarnings season is pretty much done, but we’ve got some big retail reports on tap:Tuesday: Home Depot (HD)Wednesday: Target (TGT), TJ Maxx (TJX)Thursday: Walmart (WMT), Ross Stores (ROST)Friday: Foot Locker (FL)This earnings season has been all over the place for consumer stocks. We’ve seen some huge hits (like Apple) and some big misses (like Disney) Nonetheless, Walmart and Target should give us fresh insights on the consumer. Outside of retail, we have Baidu (BIDU) on Tuesday, Cisco on Wednesday (CSCO), and Applied Materials (AMAT) on Thursday. So How Has Earnings Season Been?As we noted last week, earnings season is pretty strong relative to expectations. According to FactSet, 92% of S&P 500 companies have reported, and so far:78% of companies beat EPS estimates75% of companies have beaten revenue estimates.Earnings have declined by -2.5% vs. expectations for a -6.7% declineSo earnings stink, but they’re not as bad as expected. Which is why the market’s been up this year. Traders Are Still in a Bad MoodInvestors and traders remain remarkably bearish despite the market’s stability. According to AAII, just 29.4% of investors are bullish. That’s up from 24.1% the past two weeks, but well below the 37.5% long-term average. AAII said “pessimism among individual investors stayed above average for the 12th consecutive week.” A Look at Sector Performance in 2023:Click to enlargeIt’s the same old story. Housing (ITB) is winning which it’s not supposed to do in a rising rate environment, which could be related to traders pricing in rate cuts later this year. And tech is pretty strong with XLK, SMH, and ARKK all up 20% YTD. Meanwhile, Natural Gas (UNG), Banks (XLF, KRE), Energy (XLE, OIH), and Cannabis (MSOS) have lagged, big time. Factoid of the Week: The Best Traders on Earth are in the US CongressAccording to Unusual Whales, Alabama Senator Tommy Tuberville is quite the active options trader:BREAKING: Senator Tommy Tuberville has just sold millions in stock and options.He sold puts on $TXN, $KR, $HPQ, $PARA, $AMT, and sold 50k in puts on $TSLA, $CSCO and $MSFTAnd much more.He appears to using options while in Congress.Wild.— unusual_whales (@unusual_whales) May 12, 2023 Interestingly, two opposing members of Congress — Matt Gaetz and Alexandria Ocasio-Cortez — are teaming up to ban members of Congress from trading or owning stocks. Because Paul Tudor Jones or Richard Dennis have nothing on this crew:BREAKINGI have just released the full trading report on politicians in 2022.Despite 2022 being the worst market since 2008, both Democrats & Republicans beat the market.Many politicians individually beat the market.And many made unusual trades resulting in huge gains. pic.twitter.com/qDWIJB2spk— unusual_whales (@unusual_whales) January 3, 2023 Get to Know JR RomeroHow did JR Romero go from code to pro trader & VTF® moderator.
Continue Reading -->Coffee With Greta: Debt Ceiling Crisis Looms
DJIA Futures: +124 (+0.4%) SPX Futures: +14 (+0.3%) NASDAQ Futures: +26 (+0.2%) Good morning friends! Futures are higher as regional bank stocks attempt to rebound. Let’s get right to it! Debt Ceiling Meeting Delayed A meeting on the debt ceiling originally slated for today has been pushed to early next week. President Biden was set to host the big four Congressional leaders at the White House today for the second round of talks this week. But sources say the meeting has now been pushed to next week. This comes after negotiations on Tuesday failed to make any progress. House Speaker Kevin McCarthy is demanding spending cuts in exchange for a debt ceiling hike while Democrats says that’s a non-starter. Sources told NBC that the delay in today’s meeting is a positive sign. They said, “Meetings are progressing. Staff is continuing to meet and it wasn’t the right moment to bring it back to principals.” Treasury Secretary Janet Yellen says the U.S. will run out of money as early as June 1. Regional Bank Bounce Back Regional bank stocks are rebounding today after tumbling again on Thursday. PacWest Bancorp (PACW) shares are up 0.4% in premarket trade after plunging 22.7% on Thursday. The SPDR S&P Regional Banking ETF (KRE) is up 0.7%. Regional banks have seen extreme volatility in recent weeks as traders wonder which might be the next to fail. Tesla Jumps After Musk’s Twitter CEO Announcement Tesla (TSLA) shares are up 2.3% ahead of the open after CEO Elon Musk said in a tweet that he has hired a new CEO for Twitter. Musk said, “Excited to announced that I’ve hired a new CEO for X/Twitter. She will be starting in ~6 weeks! My role will transition to being exec chair & CTO, overseeing product, software & sysops.” The news is good for Tesla shareholders who have previously felt like Twitter is a distraction for Musk. In April, a group of shareholders publicly called for Tesla’s board to ensure he would dedicate more time to the electric vehicle company. Import Prices Jump U.S. import prices rose more than expected in April. The Bureau of Labor Statistics’ import price index rose 0.4% vs 0.3% expected. It was the first monthly increase of 2023 but prices were still down 4.8% annually. Imported fuel prices jumped 4.5% last month, the first increase since June 2022. Import prices excluding fuel were flat. Export prices also rose 0.2% in April but were down 5.9% year over year. In Case You Missed It Peloton (PTON) shares tumbled 8.9% on Thursday after 2.2 million of its fitness bikes were recalled in the U.S. The Consumer Product Safety Commission issued the recall over injury and fall concerns. The CPSC claims the seat post on the Model Number PL01 bikes can detach and break unexpectedly during use. Peloton has reportedly received 25 reports of unexpected breakages since January 2018, including 12 reported injuries.
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