Good Night Team 👋
Thank you all for tuning in, very fun day today let’s go!
Up day in the markets today with all major indexes going higher into just a few % points away from hitting all time highs (SP500, QQQ). The travel and leisure industry continues to show progressive data particularly TSA passenger data for airlines and Oil demand for overall business activity. Hotels are also seeing the highest level of bookings since the start of the pandemic and closing in on 2019 “normal” levels. All these different catalysts are today sending a sign that the Summer might be gearing up to be one for the books. Rates gained 3 bps to 1.58% fueled by today’s hot economic signs. Cryptocurrency markets are holding steady following the recent decline and are building base for a possible move soon.
Headlines
👾 Meme Stocks Legacy gaming store GameStop and movie theatre AMC are back in action today in the markets after just a few months were they hit all time highs and leaving multiple Short-sellers out of business. Both raising over 20%+ and 15%+ respectively. GameStop and AMC have been at the forefront of Hedge fund relentless shorting as these business posses heavy brick n mortar presence, one that is with time supposed to disappear. Retail investors on the other hand do not feel these businesses should go away and are net buyers of both companies. Will they be able to make a turnaround, we’ll see how long this meme stock bonanza continues for. More details from (Forbes).
🛢 Oil Moves Markets On today’s economic front, both Crude Oil Inventories and Gasoline Inventories were lower then expected, representing an important economic push that is creating this demand. Oil is now marching to be one of the best investments of 2021 if not already and is said to possibly reach higher prices before electrification of the U.S. happens. Let’s see how long the market can march higher without being heavy supplied by an OPEC country. Read more from (NGI).
Full U.S Economic Calendar (Here).
Without further delay, the tale of the tape:
Tale of the Tape
As of 5/26/21 close.
U.S Markets
📈 Markets, Rates and Volatility (VIX) All major indexes were higher today with outperformance coming from a tilt in growth small/mid caps in the Comm. Services and Discretionary sectors + favorable outcomes for the energy sector which are sending markets in an optimistic rush. Nasdaq continues to see relative strength (R/S) against the broader market, setting itself up for a possible green week, possibly ending the 4 week loss rout. Rates went up by about 3bps to 1.58% as hot economic activity signs continue to pile up. Volatility (VIX) to a level of 17.5ish, marking a downtrend that is sending a calm tone to the markets.
Here’s a look on every sector in the S&P500 from SPDR.
⚠️ The Wall of Worry In this fast paced market, it is key to note the themes that seem to be impacting stock market performance so that we keep track of its progress and can inform ourselves to tactically adjust. In my opinion, these are the most important issues that are keeping volatility and market rotations in place.
Updates as of 05/26/21:
Inflation transitory vs permanent: Strong travel and business data are sending signs of inflation today. We still continue to wait for transitory vs permanent effects which are not clear yet.
Fed Tapering: Fed officials mentioned today that they are not in a rush to taper, nothing concrete.
Peak Growth & Asset Prices: Peak growth is again in the spotlight as we are seeing the consumer start to slowdown, although not enough to know if this is the peak or not yet.
Higher Taxes: No further updates from last time.
Job Market Recovery: Jobs number tomorrow, be on the lookout.
Sell in May and go away: Historically weak seasonality in the month of May is so far proving to be correct. Better seasonality 2H of May and into June.
Earnings Today
🕹 Nvidia Q1 came in beating expectations as per usual with this amazing company. Nvidia’s Data Center and Gaming Revenue both grew over 90% YoY as the company continues to see high demand for its products. Nvidia was voted one of the smartest companies in the world and has now raised guidance for Q2. If the chip shortage can be used as a tailwind for Nvidia we might see some heavy numbers next quarter! More details (Here).
🧑💻 Snowflake Data analytics software company reported very good growth numbers but losses widened for the quarter. Revenues grew 110% YoY, representing one of the fastest growing company in the SaaS space as of now. More details (Here).
Check the Full U.S Earnings Calendar (Here).
Corporate News
🎮 Nintendo released a new Switch Gaming giant announced on Wednesday that it has planned a release for its new console for 2021. The upgrade into Nintendo Switch 2 or Switch Pro is rumored to feature an OLED panel and 4k gaming. More Details (Here).
🎇 GameStop NFT Webpage Legacy gaming retailer once again in the spotlight now releasing a webpage for NFTs! The company reported on Wednesday that it will leverage the craze to capitalize on its gaming NFT moments. Check out the webpage for yourself. https://nft.gamestop.com/.
Meme Headlines
Disclaimer: I am not a financial advisor. This is not a recommendation to buy or sell any securities. When investing, always do your own research and asses your own risk.