All three major averages closed higher for the week, driven by softer retail sales and consumer price data for April. It was another bad news is good news week for Wall Street, with both weaker-than-expected reports pointing to further disinflation — which is key to any hopes of the Federal Reserve cutting interest rates in 2024. Two more reports supported the idea that the central bank’s fight against inflation is working: U.S. single-family homebuilding and permits fell in April after a surprise rise the previous month, while industrial production came in below expectations. Not everything signaled a slowing down. The producer price index , a measure of wholesale prices, increased 0.5% for the month of April, exceeding the 0.3% Dow Jones estimate. Still, there was enough “bad” news to push stocks higher. The S & P 500 on Wednesday closed above 5,300 for the first time ever. One day later, the Dow made history by topping 40,000 and then closing above that milestone on Friday to end the week. The Dow finished up 1.2% for its fifth consecutive weekly gain. The S & P 500 rose 1.5% and the Nasdaq climbed 2.1%. Within the broad-based S & P 500, technology led to the upside, followed by real estate and health care. Industrials and consumer discretionary were the only two sectors to close lower. The second-quarter earnings season is winding down. Roughly 93% of S & P 500 companies have now reported, according to data compiled by FactSet. And the data has been mostly good, with 78% reporting a positive earnings surprise and 60% delivering a positive sales surprise. The week ahead is slower for economic data, except for two housing reports. But we will get earnings from three portfolio companies, including one of our two “own, don’t trade” stocks. In the week ahead, three portfolio companies will report results, while it will be fairly slow for economic data, except for a couple of housing reports. The state of housing: The April existing home sales report on Wednesday and the April new home sales report on Thursday are both important for one reason: The housing market has been a thorn in the Fed’s side, staying hot despite higher interest rates. Indeed, shelter costs have been the stickiest of inflation sources. This past week’s weaker housing report was a continuation of the disinflation that started in March 2023, but is still way above the Fed’s 2% target. And since housing accounts for roughly one-third of CPI — and even more at the core level — is a key cost pressuring consumers and preventing the Fed from cutting rates. Earnings : After a week without earnings from any Club stocks, we’ll get three this coming week. Palo Alto Networks looks to escape the penalty box, following a disappointing January quarter as management undertook a new strategy to accelerate the pace of “platformization,” or the bundling of its services and products for clients. The move does put some near-term pressure on financials, but is expected to result in improved growth over the longer term as more customers are pulled deeper into the Palo Alto security ecosystem. We provided a more thorough preview of the quarter this week. Off-price retailer TJX Companies stands to benefit from the pressure consumers are feeling from prolonged inflation. Consumers are becoming cautious but are still buying — they just want better deals, which is where TJX comes in. We want management to discuss foot traffic, basket size and spending trends. Chipmaker and AI leader Nvidia is expected beat and raise again this quarter. Lead times for the company’s AI chips will be a focus area as demand continues to outpace supply. Additionally, we want to hear about demand for the new Blackwell chip that launches later this year. We are also looking for updates on software, which we see as a key piece to the long-term growth story, to the stock maintaining a premium valuation, and to ensuring less cyclicality in earnings. Monday, May 20 Before the bell: Li Auto (LI), Wix.com (WIX), Global-e Online (GLBE), Nexxen International (NEXN) After the bell: Palo Alto Networks (PANW) , Zoom Video Communications (ZM), Trip.com Group Limited (TCOM), James Hardie Industries N.V. (JHX), Nordson Corp. (NDSN), Keysight Technologies (KEYS) Tuesday, May 21 Before the bell: ZIM Integrated Shipping Services (ZIM), Macy’s (M), Lowe’s Companies (LOW), AutoZone (AZO), Eagle Materials (EXP), BiomX (PHGE) After the bell: Modine Manufacturing Co. (MOD), Toll Brothers (TOL), ViaSat (VSAT), Alvotech (ALVO), Urban Outfitters (URBN) Wednesday, May 22 10:00 a.m. ET: Existing Home Sales 2:00 p.m. ET: FOMC Minutes Before the bell: TJX Companies (TJX) , Target Corp. (TGT), Analog Devices (ADI), Dorian LPG Ltd (LPG), Dycom Industries (DY), Golden Ocean Group Limited (GOGL), WalkMe (WKME), Petco Health and Wellness Company (WOOF), Williams-Sonoma (WSM) After the bell: Nvidia (NVDA) , Snowflake (SNOW), e.l.f. Beauty (ELF), VF Corp. (VFC), Synopsys (SNPS), Star Bulk Carriers Corp (SBLK), LiveRamp Holdings (RAMP), Chemical & Mining Co. of Chile (SQM), Grupo Supervielle S.A. (SUPV) Thursday, May 23 8:30 a.m. ET: Initial Jobless Claims 10:00 a.m. ET: New Home Sales Before the bell: Ralph Lauren Corporation (RL), BJ’s Wholesale Club (BJ), Maxeon Solar Technologies, Ltd (MAXN), TD Bank Group (TD), Endava (DAVA), Polestar (PSNY), Medtronic (MDT), NetEase (NTES) After the bell: Deckers Brands (DECK), Intuit (INTU), Ross Stores (ROST), Workday (WDAY) Friday, May 24 8:30 a.m. ET: Durable Orders Before the bell: Booz Allen Hamilton Holding Corporation (BAH), Mesa Laboratories (MLAB) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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Nvidia CEO Jensen Huang delivers a keynote address during the Nvidia GTC Artificial Intelligence Conference at SAP Center on March 18, 2024 in San Jose, California.
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All three major averages closed higher for the week, driven by softer retail sales and consumer price data for April. It was another bad news is good news week for Wall Street, with both weaker-than-expected reports pointing to further disinflation — which is key to any hopes of the Federal Reserve cutting interest rates in 2024.