Equities finished generally higher on Friday with the Tech-heavy Nasdaq leading large cap. stocks up +1.10% while the S&P 500 added +70bps and the Dow finished just shy of even at -.01%. Tech shares led the market higher with Comm. Services the only other sector outpacing the broad market. Cyclical and Defensive sectors were lower as investors chased NVDA higher after another blockbuster quarter.
Interest rates firmed with the 10yr yield bouncing off its 200-day moving average. Overhead resistance there remains at 4.75% though another test of that level is likely with the Fed jaw-boning the “higher for longer” narrative in an attempt to further cool prices.
As of this writing Tuesday’s futures for the S&P 500 the Nasdaq and the Russell 2000 are all positive, with big Tech. solidifying its leadership position.
Eco Data Releases | Friday May 28th, 2024
| Date Time | Event | Period | Survey | Actual | Prior | Revised |
| 05/28/2024 09:00 | House Price Purchase Index QoQ | 1Q | — | — | 1.50% | — |
| 05/28/2024 09:00 | FHFA House Price Index MoM | Mar | 0.50% | — | 1.20% | — |
| 05/28/2024 09:00 | S&P CoreLogic CS 20-City MoM SA | Mar | 0.30% | — | 0.61% | — |
| 05/28/2024 09:00 | S&P CoreLogic CS US HPI YoY NSA | Mar | — | — | 6.38% | — |
| 05/28/2024 09:00 | S&P CoreLogic CS 20-City YoY NSA | Mar | 7.30% | — | 7.29% | — |
| 05/28/2024 10:00 | Conf. Board Consumer Confidence | May | 96 | — | 97 | — |
| 05/28/2024 10:00 | Conf. Board Present Situation | May | — | — | 142.9 | — |
| 05/28/2024 10:00 | Conf. Board Expectations | May | — | — | 66.4 | — |
| 05/28/2024 10:30 | Dallas Fed Manf. Activity | May | -12.5 | — | -14.5 | — |
S&P 500 Constituent Earnings Announcements by GICS Sector | Friday May 28th, 2024
No S&P 500 Constituents Reporting Today
No S&P 500 companies report on Tuesday while the earnings season eventually winds down with some big software names reporting into June.
Tactical Tuesday: Something has to give!
Now that NVDA has re-confirmed the profitability of the AI trade, the big question is whether the bull market in equities that started in early 2023 can broaden out the prosperity. A narrow market is usually a market that eventually falters, so while we aren’t demanding new leadership must muscle Tech and Growth aside, we do need to see some ability for the average stock to move higher on price in order to sustain the advance. Currently XLI, XLF, XLB and XLE are near-term oversold. Unlike XLY which we highlighted in our weekly market letter, these sectors had been improving throughout the spring and we expect there is trade to be made here as commodities and Crude oil are also near-term oversold. Given the chart of the 10yr yield we are likely to recommend some of these as long exposures for June. XLI, still looks the bet to us as a tactical entry point.
- XLI (200-day m.a.| Relative to S&P 500)
- XLI has moved sideways over the intermediate-term in a constructive pattern, but nears relative lows for the year despite the bull trend for equities. Crude and Commodities prices offer a setup for outperformance in the near-term as all three are oversold to varying degrees.
Source: Bloomberg
