Pre-Markets in the Green; Next Week Heats Up for Data

Friday, May 10th, 2024

Pre-market futures are up again this morning, though with something of a downward drift from earlier pre-market highs. Currently, the Dow is +100 points from yesterday’s close, the S&P 500 is +12 points and the continual market leader, the Nasdaq, is +52 points at this hour. The Dow is currently riding a 7-day rally, while the S&P and Nasdaq have gathered +3% of near-term lows since Thursday of last week. The Russell 2000 is up more than +2% in the past month of trading.

We’ll have had over 2000 earnings reports this week alone. From here, Q1 earnings season moves to a lower flame, and we’re already a week removed from all of the marquee names putting out quarterly data, save NVIDIA (NVDA Quick QuoteNVDA - Free Report) . AI and value-based offerings tended to do better in this quarter, although even homebuilders demonstrate heavy demand levels. Energy stocks may have seemed like a smarter play — when Mideast tensions were threatening to boil over — than they might today.

We’ve also taken a breather from most big economic news. Last week was not only peak Q1 earnings but also Jobs Week. Next week might be dubbed “Inflation Week,” with April Producer Price Index (PPI) and Consumer Price Index (CPI) in the offing. We look for core year-over-year prints to come down from +2.8% and +3.8% reported a month ago, respectively. The Inflation Rate — headline year-over-year CPI — reached +3.48% in March, which has actually ticked up from the +3.08% reported back in January of this year. We haven’t seen a sub-3% Inflation Rate since June of 2023.

We have seen a pullback among many Consumer Discretionary companies in calendar Q1 earnings season so far (although we’re still a week or so away from major retail earnings reports), with evidence of a shyer consumer at particular price points for particular goods and services. Starbucks (SBUX Quick QuoteSBUX - Free Report) , Uber (UBER Quick QuoteUBER - Free Report) and Spotify (SPOT Quick QuoteSPOT - Free Report) , to name but a few, have demonstrated this. On the other hand, Chipotle (CMG Quick QuoteCMG - Free Report) and Wingstop (WING Quick QuoteWING - Free Report) posted big growth numbers for the quarter, American Airlines (AAL Quick QuoteAAL - Free Report) reported all-time high quarterly revenues in its Q1, and home prices, while growing at a slower rate, continue to move up.

The Housing sector will have its share of reportage next week, as well. Not only the Homebuilders Confidence survey but Housing Starts and Building Permits for last month are expected to hit the tape. We’ll also see the next monthly Retail Sales report as well as Imports and Exports. For the most part, we’re seeing those rapidly reducing numbers from historical highs on inflation levels really slow down — even notch back up slightly, in certain metrics. Overall, trajectories still appear on a downward path, but just how slowly down are we moving these days? Next week will tell us.

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