Most of the smoke has cleared for this week. Not only vital Consumer Price Index (CPI) and Producer Price Index (PPI) data and a new Federal Open Market Committee (FOMC) meeting have come and gone, but so have post-earnings season quarterly reports from companies like Broadcom AVGO and Adobe ADBE. Results have come in about as well as could be reasonably expected, yet we’ve continued the market bifurcation: up on the Nasdaq and (by extension) the S&P 500, down on the Dow and small-cap Russell 2000.
The A.I. narrative continues to drive the bus. This is best depicted by NVIDIA’s NVDA continued stellar performance: +8% over the past week and +41% for the past month. NVIDIA shares are up +200% from one year ago! So anything touching this golden hem has been a beneficiary, which helps illustrate the near-term advantages of the tech-heavy Nasdaq and opposed to, say, the small-cap regional bank-heavy Russell.
Ahead of Friday’s opening bell, this trend continues. While all major indices are in the red, the Nasdaq is wallowing in the single digits, the S&P is -15 points and the Dow is -214 at this hour. Because we’re seeing such enthusiasm for the A.I. build-out trade, the big gains we’re seeing even among tangential stocks in this space (even Adobe is +13% in today’s pre-market after yesterday afternoon’s beat, largely on its proximity to A.I. gains) are going to the tech-heavy index and away from blue chips.
This morning, Import and Export Prices are out. For the month of May, headline Imports month over month came in lower than anticipated: -0.4% versus 0.0% expected. This follows an unrevised +0.9% and is the first negative print since 2023 finished its final three months in the red. Stripping out fuel prices, this moderates slightly — to -0.3%, compared with +0.7% last month. Year over year was in-line with last month’s tally, at +1.1%, down from +1.3% projected.
Exports dropped to -0.6% in May from a revised +0.6% in June. This swings to a negative from the +0.1% analysts were looking for. Again, this is the biggest downward move since the end of 2023. Year over year reached +0.6% — again softer than expectations. Normally, what we’d like to see are cheaper imports and more expensive exports, but in this current environment where finding evidence of shrinking inflation is paramount, we see downward swings in both of these trade numbers for last month.
After today’s open, we look for preliminary Consumer Sentiment in June. Estimates of 71.5 is a nice bump higher than the 69.1 posted a month ago. Of course, shrinking consumer sentiment would also be a sign of shrinking inflation, but we find it difficult to get mad at a happy American consumer. Outgoing Cleveland Fed President Loretta Mester will engage the public on monetary outlook today, as will Chicago Fed President Austan Goolsbee and Fed Governor Lisa Cook.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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Adobe Inc. (ADBE) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
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