Monday, May 22, 2023

🚷Don’t Rush Into Rising Markets

Good morning. Rumors of a debt ceiling solution remained just rumors last week. But optimistic...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. Rumors of a debt ceiling solution remained just rumors last week. But optimistic traders pushed markets higher. Stocks are now back to their early-March peak. That's about where they traded before the banking sector came under pressure.

Meanwhile, the Fed's Bank Term Funding Program hit a record high usage last week. That suggests that the sector hasn't fully pulled through yet. While some banks have positive data to report on deposits, others don't. Chances are we could see more turmoil there in the coming weeks.

Following this recent rally, it's clear that investors and traders alike should look to hedge, or even come up with some short positions.

Now here's the rest of the news:

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MARKETS
DOW 33,426.63 -0.33%
S&P 4,191.98 -0.14%
NASDAQ 12,657.90 -0.24%
*As of market close
Stocks closed lower on Friday, but closed higher for the week.
Oil dipped 0.3 percent, closing at $71.67 per barrel.
Gold rallied 1.0 percent, ending the day at $1,980 per ounce.
Cryptocurrencies traded mixed, with Bitcoin at $26,858 at the stock market close.

Today's TOP TIPS
Consumers Remain Sluggish – Focus on Low Cost Leaders Now
The economic data in the past week shows a slowdown in consumer spending. As a major part of the economy, that's a big deal. Yet retailers are reporting better-than-expected numbers. That suggests there may have been too much pessimism in the short term.

It also suggests retailers with a cost advantage can likely fare well in today's environment. That bodes well for most big box players. But one is king of them all.

» FULL STORY

Insider Trading Report: Vornado Realty Trust (VNO)
Russell Wight, a director at Vornado Realty Trust (VNO), recently added 14,000 shares. The buy increased his holdings by 280 percent, and came to a total cost just under $150,000.

The buy came a week after a previous purchase. Another director was a sizeable seller of shares last month. Otherwise, company insiders have generally been inactive at the company over the past two years as either buyers or sellers.

» FULL STORY

Unusual Options Activity: Microsoft (MSFT)
Tech conglomerate Microsoft (MSFT) has been trending higher in recent sessions, and just broke through to a new 52-week high. One trader is betting that the uptrend will continue in the short term.

That's based on the June 30 $330 calls. With 38 days until expiration, 7,806 contracts traded compared to a prior open interest of 175, for a 45-fold rise in volume on the trade. The buyer of the calls paid $4.10 to make the bullish bet.

» FULL STORY

IN OTHER NEWS
Home Prices Post Largest Annual Drop in 11 Years

Sales of previously owned homes dropped 3.4 percent in April, another sign of a slowing housing market. And prices continued to fall, now marking the largest annual decline in 11 years. With interest rates creeping up again, the housing market will likely continue to see prices trend lower.
Retailers Report Rising Violent Incidents

While last week's earnings reports from retailers were largely better-than-expected, several companies reported that violent incidents are on the rise. That includes a rise in shoplifting, both small and organized, which has hit the sector for over $500 million in losses over the past few years.
Disney Pulls Plug on Florida Campus

The Walt Disney Company (DIS) is halting plans to build a $1 billion office complex in Florida, about 20 miles from the Disney World parks. The complex would have held about 2,000 white collar jobs, largely coming from existing positions by employees in California.
Meta Unveils Its AI Chips

Meta Platforms (META) has announced the computer chips that it's using for its AI infrastructure. The announcement and development of the AI program comes as the company has laid off 21,00 employees and is looking for greater cost efficiencies, and as the company's virtual reality system hasn't attracted much consumer interest.
OpenAI Expands ChatGPT to iOS

Artificial intelligence software company OpenAI has announced the launch of an iOS app, which will expand the popular ChatGPT AI software to Apple (AAPL) users. The new release may lead users away from Apple's Siri, a voice assistant with some AI programming.

S&P 500 MOVERS
TOP
CTLT  15.401%
EPAM  3.507%
DXC 2.538%
ADBE 2.453%
PXD 2.29%
BOTTOM
VFC 8.089%
ESTY 4.427%
ULTA 4.229%
NKE 3.643%
DLR 3.461%

Quote of the Day
There is some uncertainty about when the government will be unable to meet its obligations in terms of running out of money, so that does create some uncertainty. And so, it's still a risky environment, but one which we believe will ultimately see an outcome that is not too damaging to the markets – on a long-term basis, at least.
- Yung-Yu Ma, chief investment strategist at BMO Wealth Management, on the potential for a debt default to cause a hiccup in the market, but one that will likely be short-lived.

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