/ May 28
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Wednesday:
FOMC Minutes
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Thursday:
Initial Jobless Claims (230K exp.)
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Friday:
Core PCE Price Index MoM (0.1% exp.)Personal Income MoM (0.3% exp.)
Personal Spending MoM (0.2% exp.)
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Wednesday:
Nvidia
Salesforce
Nutanix
Abercrombie & Fitch
Capri Holdings
Dick's Sporting Goods
Macy's
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Thursday:
Foot Locker
Li Auto
Costco Wholesale
Dell Technologies
Elastic
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Friday:
N/A
Daily Briefing
*There was hardly any interference from sellers yesterday, as the stock market rallied around a confluence of supportive developments; stocks began on a high note and steadily added to their gains as the session carried on, benefiting from sidelined investors getting squeezed back into the action by a fear of missing out on further gains; all major indices closed near their highs for the day;
*SPY bounced hard, but did not exactly regain the highs established last week; from a pure momentum perspective, the trend is still showing a consolidation or pullback is more likely in the near term than a continuation of further gains; there are several levels of support at $570, while resistance stands above all-time-highs, at $620;
*The MACD signal is now just about to turn negative from a very high value;
*Dark Pools traders have not been chasing the rally; the average index for yesterday among top S&P 500 companies was just 39%, one of the lowest readings on record recently; institutions have used yesterday’s surge in prices in order to liquidate positions;
*That being said, there were three primary catalysts behind the day’s advance:
President Trump announced that he will be delaying the implementation of his recommended 50% tariff rate for the EU until July 9 to allow more time to negotiate a deal. This decision followed a phone call with European Commission President von der Leyen, who is reportedly wanting to accelerate trade talks now.
Treasury yields took a welcome step back, bolstered by reports that Japan is considering reducing its issuance of ultra-long bonds. The 10-yr note yield fell eight basis points to 4.43%, cutting below the closely watched 4.50% level, and the 30-yr bond yield dropped 10 basis points to 4.94%, moving below the closely watched 5.00% level.
The Consumer Confidence Index for May showed a solid jump to 98.0 (Briefing.com consensus 87.0) from a downwardly revised 85.7 (from 86.0) for April, as average 12-month inflation expectations eased from 7.0% to 6.5%.
*These were the primary catalysts, but the consumer discretionary (XLY, +3.0%), information technology (XLK, +2.6%), and communication services (XLC, +2.1%) sectors were the main drivers of a broad-based rally effort that included the outperformance of the mega-cap stocks and small-cap stocks;
*All 11 S&P 500 sectors finished higher, but only the three sectors mentioned above had a better return than the S&P 500; the smallest gainers were the utilities (XLU, +0.8%) and energy (XLE, +0.8%) sectors;
*With the tariff temperature cooling for now, efforts to hedge for downside protection were tapered; the CBOE Volatility Index fell 13.6% to 19.25.
*Yesterday’s session was controlled by buyers, evidenced by an A-D line that favored advancers by a better than 6-to-1 margin at the NYSE and by a better than 2-to-1 margin at the Nasdaq;
*In other developments, the Treasury market digested a $69 billion 2-yr note auction in decent shape; the high yield of 3.955% stopped through the when-issued yield of 3.965% by a basis point, albeit on slightly weaker-than-average dollar demand; the U.S. Dollar Index was up 0.5% to 99.59;
*TLT strongly bounced +1.4% from its chart support level of $84 and closed slightly above the pivot level of $85.6; dealer gamma exposure (GEX) for TLT is now overwhelmingly positive, in a signal market makers will buy the dip on bonds and suppress volatility;