/ May 29
-
Thursday:
Initial Jobless Claims (230K exp.)
---
Friday:
Core PCE Price Index MoM (0.1% exp.)Personal Income MoM (0.3% exp.)
Personal Spending MoM (0.2% exp.)
-
Thursday:
Foot Locker
Li Auto
Costco Wholesale
Dell Technologies
Elastic
---
Friday:
N/A
Daily Briefing
*There was no follow through in yesterday’s session after Tuesday’s big gains; major indices trudged their way through the session, weighed down by a lack of concerted leadership and a pervasive sense of wait-and-see in front of NVIDIA's (NVDA, -0.5%) earnings report after the close;
*In effect, it was a consolidation trade influenced by rising Treasury yields, an FT report that the Trump administration told semiconductor software design companies to stop selling to customers in China, and some festering valuation concerns; all of those got blown out later by NVDA’s positive earnings surprise and news that a federal court blocked Trump’s sweeping “Liberation Day” tariffs;
*SPY now has a clear path to all time highs, with very little in terms of technical resistance to surpass; if tariffs are now off the table, what exactly is stopping equity investors from pumping the market to new records, especially since institutions badly need to catch up in terms of risk exposure?; it seems the squeeze is on! to the upside, resistance stands at $620 (M-Trend), while a confluence of support levels is at $570 (S1, 200-DMA, 20-DMA);
*The MACD signal has technically generated a SELL crossover, which will most likely get reversed by the end of today’s session;
*Dark Pool traders have had mostly the same stance as before, only marginally interested in buying a consolidation tape; high-beta names like TSLA and NVDA were well bid, signaling confidence in the mega cap tech space; other big names fared worse, with UNH and XOM attracting large sellers;
*Gamma Exposure remains broadly positive however, with all key stocks except LLY and XOM benefiting from dip-buying support;
*This is a trend we are seeing on the sectors side as well, with only Utilities (XLU), Healthcare (XLV) and Energy (XLE) coming up with negative GEX values; notably, both SPY and QQQ ETFs have had consistent positive GEX values since at least April 28;
*On the day, all 12 S&P 500 sectors ended the day in negative territory or unchanged at best; the biggest losers were the utilities (XLU ,-1.4%), energy (XLE, -1.3%), and materials (XLB, -1.3%) sectors;
*Small-cap stocks and the value factor also underperformed in a move that could be attributed in part to growth concerns, but to be fair, trading volume was relatively light on a day that saw the market cap-weighted S&P 500 break below 5,900 in late trading and close near its lows for the session;
*After hours, NVDA reported adjusted earnings of $0.81 per share, ($0.08 better than expected); revenues rose 69.2% year/year to $44.06 bln vs the $43.34 bln expectations;
*Non-GAAP gross margin came in at 71.3%, excluding H20 charge, vs 70.5-71.5% prior guidance
*Company issued guidance for Q2 (Jul), sees Q2 revs of $44.10-45.90 bln, which may not compare to previous $45.92 analyst estimations; notably, this outlook reflects a loss in H20 revenue of approximately $8 bln due to the recent export control limitations, so it may not be comparable;
"Our breakthrough Blackwell NVL72 AI supercomputer — a ‘thinking machine' designed for reasoning— is now in full-scale production across system makers and cloud service providers," said Jensen Huang, founder and CEO of NVIDIA. "Global demand for NVIDIA's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and NVIDIA stands at the center of this profound transformation."
*The stock jumped +5% in response, receiving a slate of analyst upgrades following the call; NVDA has lately been trailing its Mag 6 “peer group”, with 1 year performance sitting below the group average;
*The other big development after hours was the International Trade Court which blocked President Trump from imposing tariffs under emergency authority;
*This order blocks President Trump from using the International Emergency Economic Powers Act to impose tariffs and therefore the following tariffs are blocked: 10% global tariff, 25% tariffs on Canada/Mexico and 30% China tariffs; the reciprocal tariffs on various nations that were put on hold are also blocked by this court order;
*The court did not block the tariffs imposed under Section 232 authority, which include autos, steel, and aluminum; the Trump administration has appealed the decision;
*While this news will undoubtedly rally the bulls later today, decliners led advancers by a 3-to-1 margin at the NYSE and by a 2-to-1 margin at the Nasdaq;
*There was no U.S. economic data of note, but it was reported before the open that the Mortgage Bankers Association's Mortgage Applications Index declined 1.2% week-over-week, with purchase applications up 2% and refinance applications down 7%;
*Treasuries drew some buying interest after the report, but they eventually reversed course, with the 10-yr note yield scraping 4.50% and the 30-yr bond yield kissing 5.01% at their highs before backing down; the 10-yr note yield settled at 4.48%, while the 30-yr bond yield settled at 4.98%;
*TLT declined -0.43% and possibly got rejected from the $85.6 pivot level; in theory, if tariffs are put on hold, inflation expectations should go down, which would boost the appeals of bonds and the US Dollar;