After a five-week winning streak, the S&P 500 (SP500) posted its first weekly decline on Friday, capping a holiday-shortened week and marking the end of an eventful month of May. Highlights of the week include the latest financial data from Salesforce (CRM), which sent shares of the enterprise software giant falling sharply on weaker-than-expected results and guidance. On Friday, the Fed’s preferred measure of inflation, the Core Personal Consumption Expenditures Price Index, met consensus for April despite a larger-than-expected decline in consumer spending growth. However, major indexes posted sharp gains in May, with the Dow Jones Industrial Average (DJI) surpassing the 40,000-point mark for the first time. Over the course of the week, the S&P 500 fell. -0.5%The Nasdaq (COMP:IND) index fell. -1.1%The blue-chip Dow Jones Index (DJI) lost -1.0%. Read a preview of next week’s big events in Seeking Alpha’s Catalyst Watch.
It is now almost certain that the European Central Bank will cut interest rates before the Fed, bucking the trend of the US central bank leading the way in terms of monetary policy. ECB officials on Monday largely confirmed that the first cut would happen next week, as inflation moved closer to its 2% target. This contrasts with Fed officials’ lack of confidence in easing monetary policy any time soon. Nick Binnenbrock, an economist at Wells Fargo Bank, said markets are betting on the ECB cutting interest rates by 25 basis points, then “holding interest rates steady in July, before cutting rates by another 25 basis points in September.” (1 comment)
Nvidia (NVDA) stock. jumped 7% on Tuesday, taking the AI darling’s market capitalization to $2.81 trillion, just $100 billion away from surpassing Apple (AAPL) – the second-largest listed company by value. The stock also topped Interactive Brokers’ (IBKR) weekly list of most active symbols and helped push the tech-heavy Nasdaq Composite Index (COMP:IND) past 17,000 points for the first time. Nvidia shares have more than doubled in value this year, posting four monthly gains, as investors continue to bet on the company’s prospects following its stellar earnings. In contrast, Apple’s performance was lower than that of other major technology companies, in terms of its shares Slippage about 1% YTD. (26 comments)
The wave of consolidation in the oil and gas sector continues, with ConocoPhillips (COP) agreeing to acquire Marathon Oil (MRO) in an all-stock deal valued at $22.5 billion. The latter was already climbing on reports, but confirmation of the deal sent shares MRO up to 6% Pre-market on Wednesday. Energy-hungry companies have been snapping up significant resources despite growing threats of antitrust scrutiny, with recent deals including Hess (HES)’s $53 billion sale to Chevron (CVX) and Exxon’s (XOM) all-stock transaction to Pioneer Natural Resources , worth $53 billion. $60 billion, among others. In more energy news, the White House has thrown its support behind large-scale nuclear reactors, with the aim of accelerating their development. (67 comments)
With the 2024 campaign cycle in full swing, former President Donald Trump was found guilty Thursday of all 34 counts of falsifying business records in a slush money trial. The sentencing hearing was scheduled for July 11, just days before the Republican National Convention, but don’t expect any time behind bars. Trump Media (DJT), owner of the social media app Truth Social, fell after the jury’s decision, but cut its losses shortly afterwards. Note that DJT has become a popular meme stock that has attracted attention without paying much attention to its fundamentals. (35 comments)
Everyone on Wall Street was talking about the private credit boom, and as investors wanted more of it, warnings grew louder. The latest to speak on this was JP Morgan’s Jamie Dimon, who noted that “there could be problems here,” but said that the bank may still be considering investing up to $200 billion in private credit deals from its balance sheet. . The emerging asset class has grown from about $250 billion in 2010 to about $2 trillion today, and is set to expand by double-digit percentages in the coming years. Those in the private credit industry say their conforming financing model is safer compared to traditional banks, while also being a source of credit creation that can support the U.S. economy. (55 comments)
