/ May 14
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Wednesday:
N/A
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Thursday:
PPI MoM (0.2% exp.)
Retail Sales MoM (0.1% exp.)
Initial Jobless Claims (230K exp.)
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Friday:
Building Permits Prel (1.45M exp.)Michigan Consumer Sentiment Prel
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Wednesday:
Tower Semiconductor
Cisco Systems
Jack In The Box
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Thursday:
Walmart
Deere
Take-Two Interactive Software
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Friday:
N/A
Daily Briefing
*It was another winning session for stocks. The S&P 500 (+0.7%) and the Nasdaq Composite (+1.6%) extended this week's gains, leading the S&P 500 to erase its 2025 losses; the index is fractionally higher this year, powered by a strong rally in mega caps and chipmakers;
*NVIDIA (NVDA, +5.6%) was a standout in that respect, leading the S&P 500 technology sector to close +2.3% higher; the Dow Jones Industrial Average was left out of the rally due a big loss in UnitedHealth (UNH, -17.8%); it's one of the most influential names in the price-weighted average, sinking following the news that CEO Andrew Witty is stepping down for personal reasons and that the company is suspending its 2025 outlook as it grapples with higher-than-expected medical costs;
*SPY continues to trade in a very bullish manner, with the collective panic from last month seeming like a distant memory; bulls are firmly back in the driver’s seat now, but support remains untested; it should materialize at $567 (S1, 200-DMA) or just below, at $546 - $550;
*The MACD signal continues to be as elevated as it can ever get, with both the short average and the histogram at extremely high values; in recent memory, such extensions either happened at a bear market rally top (August 2022) or within the post covid recovery (June 2020); in both cases, the market declined and consolidated first, before making any additional gains;
*It does look like institutions are continuing to fade this rally, with Dark Pools buying for names in the top 20 S&P 500 stocks showing weak metrics; daily data for most stocks is bearish;
*GEX for the same subset of stocks continues to remains positive, in a sign that we are now trading in a “buy the dip” regime;
*UNH deserves a closer look; their outlook suspension was a reminder that there is still a lot of uncertainty in the market; with the stock being a highly liquid mega cap, with high institutional ownership and a large news-based decline, it’s the perfect case study for Dark Pools effectiveness;
*In the chart below, we plot 1D, 1W, 2W and 1M buying percent for UNH; with dismal readings (sub 30%) and a downward trend, it’s clear that institutions were offloading the stock way before yesterday’s -17% drop;
Sector ETFs relative-to-SPY returns for yesterday
*The woes of the Healthcare sector did not impact the broad market otherwise; many stocks participated in upside moves, leading the equal-weighted S&P 500 to close +0.2% higher;
*The upside action was also driven by a fear of missing out on further gains, momentum after the notable de-escalation in the trade war with China, and an April Consumer Price Index that lacked any tariff inflation shock (as expected); also, investors has been enthused by the news that Saudi Arabia, in conjunction with President Trump's visit there, announced a $600 billion investment plan in the U.S.
*The 10-yr yield settled 4.50%, which is 13 basis points higher than Friday's settlement and 32 basis points higher than "Liberation Day" when President Trump announced sweeping tariffs on most nations;
*TLT lost -0.41% and is now medium term Oversold and trading near the bottom of its recent range;