Stock Market Weekend update - 5/19/24

THANKS to all my friends who have been providing their positive feedbacks to my updates! You are the force to encourages me to provide more updates. 


Market Update

The stack market saw some upside and it was a reasonable good week for the stocks. There were many critical economic data PPI, CPI, Retail Sales. The 

During the week, the S&P 500 popped to the top-side of its multi-year high and closed above 5300. Nasdaq had a new all-time high and  Dow Jones cruised above 40,000 for the first time in history. As a matter of fact Relative Strength Index (RSI) pushed above 70 but now it's around 69.3. What it means is the stock market seems to be getting little overbought. So, it won't be surprising to see little pullbacks.

Economy Reports

On Tuesday the producer Price Index  PPI) came at 0.5% vs. 0.3% expected. So it was not good great report but market did not go down because investors waited patiently for CPI data which was released on Wednesday, 5/15. For April CPI came at 0.3% vs. O.4% expected. On YOY basis, the headline inflation dropped from 3.5% to 3.4% and  Core inflation (- Food & Energy) dropped from 3.8% - 3.6%. This was a great news for the market. Nasdaq roared 1.4% hitting new all-time high and S&P 500 was up 1.2%, first time went above 5300. Retail sales were up 0.2% in line with estimates but up 3% YOY.

The biggest earnings of the quarter

The AI giant Nvidia (NVDA) reports earnings on Wednesday, 5/22, after the bell. This is the most awaited and impactful earnings report that we can expect in the current market. So, I can expect a highly volatile week. I  believe NVDA may come with another great quarter and we may still seller earnings. Analysts expect Nvidia earnings to skyrocket 412% to $5.58 a share with sales up 245% to $24.51 billion. Its guidance would have a huge impact not only on its stock but also on other artificial intelligence stock and overall stock market.

However, we are aware that Wall Street plays its own game.Just a few weeks ago NVDA stock was smacked from $976 to $762, meaning the stock was hammered 22% in a span of 2-3 weeks. Hence, it's worth keeping a close eye and act accordingly. In my view, it's always better to have some cash to utilize in case such things happens. I am very positive that NVDA should continue to deliver another fantastic quarter. But how the stock will react is controlled by the big fishes, so I can't predict anything with surety.  We will see how it goes, let's wait and watch..On another note, watch for SMCI - it would go the similar direction the way NVDA stock reacts to earnings. One more thing, if NVDA results comes well, it's highly likely that it may announce stock split. Satay tuned!!

The another key earnings will be Palo Alto Network (PANW), which I have included in my blog portfolio recently. Last quarter stock was smacked $100+ after the earnings. I am anticipating that company should do well this quarter. It will report earning tomorrow, Monday, after the close of business. 

Microsoft’s Build developer conference kick-off on this Tuesday where the company is expected to announce how Windows will enable the AI PC. AI PC is expected to have the key hardware called a neural processing unit (NPU) which are designed to specifically handle artificial intelligence (AI) tasks.

Stocks to watch this week

NVDA, SMCI, PANW, AVGO, MSFT, SOXL

Key Economic report this week

  • WED, 5/22: Minutes of Fed's May FOMC meeting, Existing home sales.
  • THU, 5/23: U.S. manufacturing PMI, New home sales.
  • In addition, some FED speakers will speak - the usual stock that economy is strong and they want to wait for further data to decide future rate cuts!

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