Wall Street advanced during this shortened trading week, with the S&P 500 and Nasdaq hitting all-time highs in the first half of the week before pulling back some. The S&P 500 and Nasdaq were able to end the week slightly higher. The Dow Jones, which recently came out of the boil, was the biggest weekly gainer. Nvidia was the big story of the week, rising to all-time highs on Tuesday and overtaking Microsoft as the most valuable company in the US, but back-to-back sharp losses on Thursday and Friday put Nvidia in third place as club name Microsoft reclaimed the top spot. first place, followed by Apple. Nvidia saw some strong moves in the days after its 10-for-1 stock split traded on the market on June 10. This strength seemed to continue last week, as profit taking came in. In fact, the market supported away from AI trading on Thursday and Friday. We wanted to make sure we didn't give away the gains we made in other chip giant Broadcom, so we sold some shares on Tuesday. Despite its three-session losing streak, including Friday, Broadcom is still up about 13% since the session before massive gains this month. The information technology sector of the S&P 500 was flat during the week, reflecting the volatility of AI trading. Energy was the best performer as US oil prices rose. WTI had its best week since early April. Consumer, industry and financial estimates were also stronger. The utilities and real estate sectors were the only sectors that closed lower during the week. Last week also saw some major economic reports. Tuesday brought weaker-than-expected May retail sales, which the stock market took in stride, perhaps based on the view that weakness helps the view that the Fed will actually cut interest rates later this year. Stronger-than-expected May industrial production and capacity utilization, also as of Tuesday, signaled that even if consumers pull back a bit, the economy is still holding up. Markets are closed on Wednesdays in June. Housing data through the end of the week was mixed, with May housing starts on Thursday a bit soft and May existing home sales on Friday a bit better than expected. Ultimately, last week's economic readings suggest that while US growth remains resilient, things are slowing down, which is the perfect setup for stock market bulls. Continued economic expansion combined with low interest rates, which we expect to get if inflation continues to slow, is a recipe for higher stock prices. The Fed's preferred measure of inflation and the end of earnings season will be the drivers for the market next week. Economy The most important figure next week will be the core personal consumption expenditures (PCE) price index – the preferred measure of inflation for central bankers. It's out on Friday. The consensus estimate for May, according to FactSet, calls for a 2.6% annual increase on both headline personal consumption expenditures and the core rate, which excludes often volatile food and energy prices. These numbers would be broadly in line with the annual increases seen in every month since the start of 2024. The day before the personal consumption expenditures data, the final reading of first-quarter GDP was released. While it is a top-level look at the US economy, we must keep in mind that GDP is very lagging. After all, we are already at the end of the second quarter. New housing data will be released on Tuesday, Wednesday and Thursday. Since shelter costs are the single largest component of the inflation basket of prices, we can use these reports to get a sense of where housing prices and therefore inflation more broadly are headed. Earnings Although none of the club's companies will report next week, there are notable earnings from outside the portfolio to consider. FedEx: The delivery company's significant reach and importance to many industries puts management in a unique position to provide high-level insights into economic activity. It can also provide insight into a consumer's online shopping activity since it offers a lot of such packages. If consumer and broader economic activity are indeed resilient, we should see this expressed in freight volume dynamics. Carnival, Levi Strauss, Nike: Among these three companies, we can get a better idea of consumer spending activity and where they are focusing their dollars. Are they still focused on experiences (Carnival) or do we see some spending swinging in favor of goods (Nike, Levi Strauss)? Paychex: The company is one of the largest payroll processing companies in the country, with a focus on small and medium-sized businesses. It is in a unique position to provide insight into the state of the labor market. The United States has a consumption-based economy, so low unemployment rates indicate sustainable purchasing power. This is key for the Fed to wage its war on inflation while, hopefully, avoiding a recession. Micron: We will take an insight into the data center and the state of AI data center construction as much as possible. Although Micron may not have a direct role in AI like Nvidia or Broadcom, its memory chips are still needed to build these data centers. What Micron's management sees can help us better understand where we stand in the current investment cycle and how much room we have left to run. We expect that there are still several quarters remaining before we see any decline in demand for data center infrastructure solutions. Micron could also provide insight into the PC and smartphone markets, which will give us better insight into Apple, Broadcom's wireless business (which is almost entirely Apple-based), and the state of the consumer electronics refresh cycle, which is key For our best buy investment thesis. Monday, June 24 No major events Tuesday, June 25 Before the bell: Carnival (CCL) After the bell: FedEx (FDX) Wednesday, June 26 at 10 a.m. ET: New Home Sales Before the Bell: General Mills (GIS), Paychex (PAYX), UniFirst (UNF) After the Bell: Micron (MU), BlackBerry (BB), Levi Strauss (LEVI) Thursday, June 27 at 8:30 AM ET: Initial Jobless Claims 8:30 AM ET: GDPR 10:00 AM ET: Pending Home Sales Before the Bell: Walgreens Boots Alliance (WBA), McCormick (MKC) After the Bell: Nike (NKE), American Outdoor Brands (AOUT) Friday, June 28, 8:30 AM ET: Expense Price Index Personal Consumption (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) 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Shoppers walk around Twelve Oaks Mall on November 24, 2023 in Novi, Michigan.
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Wall Street advanced during the holiday-shortened trading week, with… Standard & Poor's 500 And Nasdaq Both reached all-time highs in the first half of the week before pulling back somewhat. The S&P 500 and Nasdaq were able to end the week slightly higher. the Daowhich recently came out of the boil, was the biggest weekly gainer.
