There was a good deal of divergence this week as higher bond yields on a hotter-than-expected reading on manufacturing activity slammed the economically sensitive Dow Jones Industrial Average , while an incredible quarter from Nvidia powered the Nasdaq . The S & P 500 , which leans more tech than the Dow and less tech than the Nasdaq, was stuck in the middle. At the S & P 500 sector level, only information technology and communication services finished higher on the week. Tech gained more than 3% — again, thank you Nvidia. On the flip side, energy led to the downside, sinking nearly 4% on the week. Our sole oil and natural gas play, Coterra Energy , was down accordingly. In addition to Nvidia, which was the star of the show, Club names Palo Alto Networks and TJX Companies also reported earnings this week. All three put up solid reports — despite the initial reaction we saw in Palo Alto Networks. Shares of the cybersecurity stock actually finished the week higher. More broadly, 96% of S & P 500 companies have delivered their financials for their latest quarters. According to data compiled by FactSet, 78% of them saw positive earnings surprises and 61% had positive sales surprises. Looking ahead, four more Club names — Salesforce, Best Buy, Foot Locker and Costco — are on next week’s earnings schedule. That makes next month’s quarterly release from Broadcom the final portfolio report of the earnings season. After a slow week and worries about inflation, we get the Fed’s favorite indicator of price pressures — the personal consumption expenditures (PCE) price index. Economy The April personal spending and income data, out on Friday, will garner the most attention because it contains the core PCE price index. With some heightened concerns about inflation still driving much of the day-to-day action, we’re looking for the rate of inflation to keep tracking lower. The consensus estimate per FactSet is for a 2.7% year-over-year increase at the headline PCE level and for 2.8% year-over-year increase on the core PCE — both would be in line with what we saw in March. Thursday brings the second read of three on first quarter 2024 gross domestic product (GDP). While an important indicator of broad U.S. economic activity, it’s also important to be mindful that we are already two months into the second quarter. That means investors will probably pay closer attention to more recent data, such as the aforementioned core PCE and earnings. April pending home sales are out Thursday. Housing has been the stickiest area of inflation and a major influence, given that it’s a large and unavoidable cost. Any signs that the rate of home price advances are easing would be welcome news. Earnings Salesforce reports Wednesday after the bell. We’re interested to hear how investments in artificial intelligence are driving demand for the company’s various cloud offerings, especially the Data Cloud. Are they driving new business as well as an expansion of existing business partnerships? Of course, we’ll also be looking for management to maintain a healthy balance of growth and profitability while making investments and marketing them to customers. Best Buy reports Thursday before the bell. We want to see signs that an AI-driven computer and device hardware refresh cycle will boost traffic to stores. Any commentary from management in terms of AI-ready devices driving consumer interest will be a key topic for us. Same-store sales are expected to be negative in the reported quarter, so the post-earnings conference call will be crucial in understanding what electronics innovation is in the pipeline for future quarters. Foot Locker also reports Thursday morning. We want to see continued progress on CEO Mary Dillon’s Lace Up turnaround strategy. It was a brutal report last time around, with management missing on full-year targets and pushing out operating profit margin targets by two full years. The company needs to show us that the worst is in the rearview mirror if the stock is to have any hope of escaping the penalty box. Costco reports Thursday after the bell. We expect to see a great deal of insight into the state of the consumer and inflation. The quarterly sales results won’t be all that revelatory — given Costco, unlike most companies, issues sales monthly. However, commentary on what the company is seeing in terms of foot traffic and buyer preferences will help inform our thinking about the state of the economy. Roughly two-thirds of GDP is tied to private consumption. So, when a company with the scale and breadth of offerings of Costco reports, it’s crucial to listen to what management is seeing on the ground. There’s also been speculation about whether Costco might split its stock and when it might raise membership fees. We’re historically due for a membership fee bump. Calendar Monday, May 27 The stock market is closed for Memorial Day. Tuesday, May 28 After the bell: CAVA Group (CAVA), Box (BOX) Wednesday, May 29 Before the bell: Abercrombie & Fitch (ANF), Chewy (CHWY), Dick’s Sporting Goods (DKS), Advance Auto Parts (AAP) After the bell: Salesforce (CRM), Okta (OKTA), HP Inc (HPQ), American Eagle Outfitters (AEO), Capri Holdings (CPRI), Red Robin Gourmet Burgers (RRGB) Thursday, May 30 Before the bell: Best Buy (BBY), Foot Locker (FL), Canopy Growth (CGC), Dollar General (DG), Kohl’s (KSS), Burlington Stores (BURL) After the bell: Costco (COST), Dell Technologies (DELL), Zscaler (ZS), Marvell Technology (MRVL), MongoDB (MDB), SentinelOne (S), ULTA Beauty (ULTA), Nordstrom (JWN), Gap (GPS) 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Gross Domestic Price Index 10 a.m. ET: Pending Home Sales Friday, May 31 8:30 a.m. ET: Personal Spending & Income and PCE price index (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
There was a good deal of divergence this week as higher bond yields on a hotter-than-expected reading on manufacturing activity slammed the economically sensitive Dow Jones Industrial Average, while an incredible quarter from Nvidia powered the Nasdaq. The S&P 500, which leans more tech than the Dow and less tech than the Nasdaq, was stuck in the middle.
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