Wall Street Breakfast: What Moved Markets
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All three major stock market indexes booked small gains for the week, as investors await next week's inflation data and policy decisions on interest rates from the U.S. Federal Reserve and the European Central Bank. Economic data during the week gave some strength to the Fed pause narrative. The Institute for Supply Management's gauge of U.S. services activity nearly showed a stagnation for May, while factory orders for April rose less than expected. Moreover, initial jobless claims surged to their highest level since October 2021. The data pointed towards signs of cooling in the economy while also suggesting that cracks had begun to show in the highly resilient labor market. Markets currently are forecasting a 71% probability that the Fed will pause on its string of rate hikes. The S&P 500 exited bear-market territory during the week by closing 20% above last year's October lows, and gained 0.4% for its fourth consecutive positive week. The Nasdaq eked out a 0.1% advance, which was good enough for its seventh straight winning week, its longest streak since 2019, and the Dow Jones finished up 0.3%, booking back-to-back weekly gains. Market watchers were encouraged by the breadth of the recent rally, including small-cap stocks, as the Russell 2000 rose 1.9% this week.
Apple (AAPL) unveiled its mixed-reality headset at its annual Worldwide Developers Conference on Monday, ushering in a new era of what CEO Tim Cook called "spatial computing." Unlike joystick-powered rival devices like the Meta Quest (META), Apple's headset relies on hand tracking, with the user gesturing in midair to control the interface. However, the new super-premium device was priced at $3,499, and the overwhelming majority of WSB subscribers feel that the product is too niche for the market, with the stock closing down 0.8% after hitting a new all-time high. As previously mentioned, SA analyst Ash Anderson said WWDC would likely be a "sell the news" event for Apple following its biggest product launch in nearly a decade. (705 comments)
Bringing an end to a bitter split in the golf world, the PGA Tour and upstart Saudi-backed rival LIV Golf announced a merger to unify the sport and its players. Perhaps the most immediate commercial upshot of the deal is a boost to media coverage of the sport, with all its stars coming together as one. LIV Golf drew key players away from the PGA Tour, but then had serious trouble getting media organizations interested in paying it for its events: ESPN (NYSE:DIS), CBS (NASDAQ:PARA), NBC (NASDAQ:CMCSA) and Fox (FOX) all passed on covering the league, while some already had existing deals with the PGA Tour. Other broadcasters and golf-related stocks are also on watch. (174 comments)
The Securities Exchange Commission ramped up its crackdown on crypto this week, filing a lawsuit against Coinbase (NASDAQ:COIN) just a day after suing Binance. While the allegations are different - Coinbase centers around the registration of securities and market functions, while Binance includes fraud and efforts to evade - the two are similar in other ways. The cases should provide more clarity around crypto rules, as well as the scope and authority of regulators over crypto platforms. It's also becoming more apparent that the view held by proponents in the early innings of the crypto craze, that regulation would bend to innovation, is not going to happen. (39 comments)
It's official! The S&P 500's (SP500) longest bear market since the 1940s has come to an end. The benchmark index closed up 0.6% to 4,294 on Thursday, vaulting it back into bull territory with a 20% advance from its October low. The rally has been powered, in large part, because of a handful of companies posting outsized gains, like Big Tech, Tesla (TSLA) and AI darling Nvidia (NVDA). There has also been somewhat of a resurgence in economic optimism, compared to the sentiment that plagued the market in 2022. (48 comments)
Smoke from hundreds of wildfires blazing across the now Great Orange North blanketed the eastern United States with harmful air this week, as high winds took the plumes over the border. At the current pace, government officials have said that Canada is on track to experience the worst wildfire season in its recorded history, with 9.4M acres already burned (or around 15x the 10-year average). The polluted haze halted flights at LaGuardia, postponed MLB games and Broadway shows, altered school schedules, and prompted companies like Google (GOOG, GOOGL) to issue work-from-home orders. The situation may also put a spotlight on climate investing, though others say the bigger problem has to do with forest management. (22 comments)
Weekly movement
U.S. Indices
Dow -0.3% to 33,877. S&P 500 +0.4% to 4,299. Nasdaq +0.1% to 13,259. Russell 2000 +1.9% to 1,866. CBOE Volatility Index -5.3% to 13.83.
S&P 500 Sectors
Consumer Staples -0.5%. Utilities +1.9%. Financials +1.1%. Telecom -0.4%. Healthcare -0.1%. Industrials +1.4%. Information Technology -0.7%. Materials +0.6%. Energy +1.7%. Consumer Discretionary +2.4%. Real Estate +0.7%.
World Indices
London -0.6% to 7,562. France -0.8% to 7,213. Germany -0.6% to 15,950. Japan +2.4% to 32,265. China flat at 3,231. Hong Kong +2.3% to 19,390. India +0.1% to 62,626.
Commodities and Bonds
Crude Oil WTI -1.9% to $70.35/bbl. Gold +0.3% to $1,975.9/oz. Natural Gas +4.1% to 2.262. Ten-Year Bond Yield -0.2 bps to 3.743.
Forex and Cryptos
EUR/USD +0.4%. USD/JPY -0.39%. GBP/USD +1.06%. Bitcoin -2.3%. Litecoin -8%. Ethereum -2.8%. XRP +3%.
Top S&P 500 Gainers
Warner Bros. Discovery (WBD) +18%. Tesla (TSLA) +14%. Bath & Body Works (BBWI) +12%. Ford Motor (F) +11%. Norwegian Cruise Line Holdings (NCLH) +9%.
Top S&P 500 Losers
EPAM Systems (EPAM) -19%. Campbell Soup (CPB) -11%. DISH Network (DISH) -10%. C.H. Robinson Worldwide (CHRW) -8%. Dollar General (DG) -8%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section.
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