Tuesday, May 30th, 2023
We start a new week in the green, at least in pre-market activity, following a mixed week that saw the Dow and small-cap Russell 2000 close in the red while the S&P 500 and especially the tech-heavy Nasdaq, now riding a strong narrative on A.I. companies, were in the green. Right now, the Dow is +10 points, the S&P is +25 and the Nasdaq is +195 points. The Russell is also +5 at this hour.
Strength in NVIDIA’s NVDA Q1 report last week — followed by Marvell Technologies MRVL — helped assert a new market catalyst following the ebb of the regional bank crisis: Artificial Intelligence (AI). However, in sort of a mirror image of the regional banking crisis, this rally looks to only be enjoyed by those companies with a true claim of AI technology and businesses, looking forward. NVIDIA is currently trading above a $1 trillion market cap for the first time.
Case-Shiller Home Price Index numbers are out this morning, and though they represent the month of March — a full season ago already — this survey is widely considered the strongest housing data in the industry. The seasonally adjusted 20-city headline came out +0.5%, ahead of the +0.4% reported the previous month. The 10-city reached +0.6%. Composite reads year over year were -1.1% and -0.8%, respectively, further indicating overall cooling in the housing market.
A full 19 of 20 cities reported lower year-over-year home prices, with only Chicago coming out ahead by +0.4%. The formerly hot Pacific Northwest is now the coolest market in the country: Seattle -12.4% and San Francisco -11.2%, while the top cities — Miami, Tampa and Charlotte (replacing Atlanta in the Top 3) — remain in the South. Steep competition and low supply are beginning to show a slight resurgence in home prices, as mortgage rate stay relatively flat after inflating over the past year+ with higher interest rates.
After today’s open, we’ll see a new Consumer Confidence report out for May, with estimates expected to come down a bit month over month: from 101.3 posted for April to 99.0 expected this morning. After today’s close, earnings season enters the home stretch with both Hewlett-Packard HPQ and Hewlett-Packard Enterprises HPE reporting quarterly results. The Enterprises side is expected to notch modest gains on both top and bottom lines, while H-P looks to post numbers more than -20% lower year over year. Both stocks carry a Zacks Rank #3 (Hold).
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