Equities paused their advance on Wednesday with the Dow leading shares lower off 51bps while the S&P 500 gave up 27bps and the Nasdaq trimmed 18bps ahead of NVDA’s earnings after the Bell.
“Higher for Longer” was the general takeaway from the Fed.’s latest meeting minutes as strong earnings and economic data keep pressure on the committee to stay tight. In other economic news, Mortgage Applications rose by 1.9% while existing home sales shrank by -1.9% MoM.
After the bell NVDA posted a bullish earnings report with revenue well above best estimates. Shares were up +4% in after-hours trading.
Thursday’s economic calendar includes Initial Jobless claims, continuing claims and new home sales data among other releases.
Eco Data Releases | Thursday May 23rd, 2024
| Date Time | Event | Period | Survey | Actual | Prior | Revised |
| 05/23/2024 08:30 | Chicago Fed Nat Activity Index | Apr | 0.13 | — | 0.15 | — |
| 05/23/2024 08:30 | Initial Jobless Claims | 18-May | 220k | — | 222k | — |
| 05/23/2024 08:30 | Continuing Claims | 11-May | 1793k | — | 1794k | — |
| 05/23/2024 09:45 | S&P Global US Manufacturing PMI | May P | 49.9 | — | 50 | — |
| 05/23/2024 09:45 | S&P Global US Services PMI | May P | 51.2 | — | 51.3 | — |
| 05/23/2024 09:45 | S&P Global US Composite PMI | May P | 51.2 | — | 51.3 | — |
| 05/23/2024 10:00 | New Home Sales | Apr | 678k | — | 693k | — |
| 05/23/2024 10:00 | New Home Sales MoM | Apr | -2.20% | — | 8.80% | — |
| 05/23/2024 11:00 | Kansas City Fed Manf. Activity | May | -7 | — | -8 | — |
S&P 500 Constituent Earnings Announcements by GICS Sector | Thursday May 23rd, 2024
INTU and ROST headline earnings on Thursday. We like the former and are agnostic on the latter. INTU will be an interesting “tell” on the Software Industry as the group has now lagged over the intermediate-term.
- INTU (200-day m.a. | Relative to S&P 500 )
- A break-out to new highs would trigger a short-term and a longer-term buy signal. Bullish chart. We would recommend accumulating on near-term weakness also.
Thematic Thursday: AI
With NVDA dominating the news and the markets, let’s take a look at AI themed ETF’s. Believe it or not, many of them have been flat or lagging the large cap. benchmarks in 2024. Among those we’ve scouted are Global X Robotics & Artificial Intelligence ETF (BOTZ), iShares Robotics and Artificial Intelligence Multisector ETF (IRBO, Global X Artificial Intelligence & Technology ETF (AIQ), First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) and, WisdomTree Artificial Intelligence and Innovation Fund (WTAI).
AIQ looks the best to us based on the technical characteristics, and it has a relatively low exposure to NVDA compared to its peers. What is also noticeable in all of these ETF’s I they are heavily concentrated in the Information Technology Sector despite the benefits of AI supposedly accruing to all sorts of different businesses. From this view, that is a sign we are still in the early innings of this theme.
- AIQ (200-day m.a. | Relative to S&P 500)
