The Nasdaq Composite inched higher Friday to say its fifth straight record close, as recent data this past week showed a continued cooling of inflation and Treasury yields retreated. For the week: The tech-heavy Nasdaq gained 3.2%, while the S & P 500 rose 1.6% and the Dow Jones Industrial Average fell 0.5%. Economic updates helped drive the gains. First, the May consumer price index (CPI) on Wednesday got here in weaker than expected, holding flat from April’s reading. Economists had expected a 0.1% gain. At some point later, the producer price index (PPI) declined 0.2% for the month against expectations for a rise of 0.1%. (The CPI measures the costs for a basket of products and services across the U.S. economy, while the PPI is a gauge of costs that producers get for his or her goods and services out there.) Each releases were welcomed by investors. They showed the Federal Reserve’s two-year plan of raising and holding rates of interest at elevated levels to bring down inflation continues to work. The hope is that as prices come down, the central bank will begin to chop rates again. Fed Chairman Jerome Powell noted that progress to reporters after the FOMC decision on Wednesday to go away rates unchanged. Nonetheless, he said more data was needed before cutting. He did indicate that one cut would prone to be appropriate before the tip of the yr. The market appears to disagree. As of Friday, the CME FedWatch Tool was putting the best odds on two cuts this yr — the primary in September and one other in December. Among the many S & P 500 sectors, information technology was the massive winner of the week, advancing nearly 6% on the back of huge moves from Club names Apple and Broadcom in addition to Oracle and Adobe . Also helping was the 8.5% rally in portfolio heavyweight Nvidia following its 10-for-1 stock split on Monday. However, the energy sector was the largest loser, followed by financials and industrials . Inside the Club this week, we heard from Broadcom , which reported strong quarterly results and announced its own 10-for-1 stock split. No portfolio corporations report earnings within the week ahead. For the primary quarter, technology was the massive winner as 89% of the sector’s corporations reported earnings that were ahead of expectations. That is followed by health care with 88% and consumer staples with 84%, in keeping with FactSet. On the revenue side, real estate was tops, with 74% of corporations reporting positive revenue surprises, followed by technology at 71% and health care at 69%. Here’s what’s on our radar for the week ahead — noting that the U.S. markets are closed Wednesday in observance of Juneteenth. Retail sales. Results for May hit Tuesday and may shed some light on the resilient consumer. Where are people spending? What are they pulling back on? Investors are on the lookout for a 0.3% overall monthly gain, in keeping with FactSet. Industrial production and capability utilization. It will show how well manufacturing, mining and the electrical and gas utilities are doing. Per FactSet, economists expect industrial production to extend 0.3% month-over-month with capability utilization at 78.6%, up barely versus the prior month. Housing. May housing starts and existing home sales dominate the tip of the week. The associated fee of shelter has been a significant source of upward pressure on inflation, so any signs of relief might be very welcome by Wall Street. Earnings . While no portfolio corporations are reporting, two to control are Lennar on Monday and Darden Restaurants on Thursday. Lennar is one among the most important homebuilders within the U.S., so we will use this release to not directly provide further clues to the forward path of inflation. Ideally, we would like to see that more supply is on the best way as that might be key to easing price inflation — key to Fed rate cuts later this yr. Darden Restaurants, the operator behind Olive Garden, Longhorn Steakhouse, Yard House and more, will give us one other view of consumer spending. Monday, June 17 After the bell: Lennar (LEN), La-Z-Boy (LZB) Tuesday, June 18 8:30 a.m. ET: Retail Sales 9:15 a.m. ET: Industrial Production & Capability Utilization Before the bell: Americas CarMart (CRMT) After the bell: KB Home (KBH) Wednesday, June 19 The U.S. stock markets are closed in observance of Juneteenth. Thursday, June 20 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Housing Starts Before the bell: Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), Jabil (JBL) After the bell: Smith & Wesson (SWBI) Friday, June 21 10:00 a.m. ET: Existing Home Sales Before the bell: CarMax (KMX), FactSet (FDS) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the ground of the Recent York Stock Exchange (NYSE) in Recent York City, U.S., January 31, 2024.Â
Brendan McDermid | Reuters
The Nasdaq Composite inched higher Friday to say its fifth straight record close, as recent data this past week showed a continued cooling of inflation and Treasury yields retreated.
