What happened in the market: 20 May - 24 May 2024

27 May

Aries Yuangga, Wakil Penasihat Berjangka

The week of May 20 to 24, 2024, was marked by notable economic data releases, significant market movements, and a mixture of investor sentiment influenced by corporate earnings reports and Federal Reserve signals. This article delves into the key events of the week, examining market performance, highlighting top-moving stocks, and providing an outlook for the upcoming week. As we navigate through these details, it becomes evident how economic indicators and corporate actions shape the broader market landscape.

Last Week at a Glance

The week leading up to the Memorial Day weekend saw major U.S. equity benchmarks end with mixed results, characterized by a pre-holiday rally. The Nasdaq Composite® ($COMP) notched its fifth consecutive weekly gain, driven by robust performances from mega-cap tech stocks, closing at 16,920.79, up 1.1% on Friday and 1.4% for the week. In contrast, the S&P 500® index (SPX) closed at 5,304.72, adding 0.7% on Friday but remaining flat for the week, while the Dow Jones Industrial Average® ($DJI) ended at 39,069.59, gaining just 4.3 points (0.0%) on Friday but down 2.3% for the week. Market sentiment was buoyed by positive economic data, including a 0.7% surge in new orders for durable goods in April and an increase in the University of Michigan Consumer Sentiment Index to 69.1, exceeding expectations. Additionally, a downward revision in one-year inflation expectations to 3.3% further fueled optimism. However, trading activity slowed in the afternoon ahead of the long weekend as investors remained cautious due to mixed signals from the Federal Reserve's minutes and ongoing uncertainties about inflation and future interest rate hikes.

Top movers & shakers🎢

Several individual stocks made headlines with significant price movements driven by a variety of factors, including quarterly earnings reports, analyst ratings, and strategic announcements. Among the notable movers were:

Nvidia (NVDA): 🎮 Continued to lead the market rally with a 2.6% gain on Friday, building on Thursday's impressive 9.3% post-earnings rally. The company's strong earnings report and positive outlook on AI-related growth significantly contributed to the Nasdaq's weekly gain.
Apple (AAPL): 🍏 Gained 1.7% on Friday, benefiting from the positive sentiment surrounding tech stocks.
Meta Platforms (META): 📱 Added 2.7% as investors remained optimistic about its growth prospects.
Tesla (TSLA): 🚗 Rose 3.2%, driven by ongoing investor enthusiasm for the electric vehicle sector.
Ross Stores (ROST): 🛍️ Rallied nearly 8% after raising its full-year profit outlook. This move was well-received by investors, showcasing the company’s strong performance and resilience in a competitive retail environment.
Workday (WDAY): 📉 Saw a significant decline, dropping more than 15% after lowering its subscription revenue forecast. This news disappointed investors, leading to a sharp sell-off.
First Solar (FSLR): ☀️ Continued its impressive performance, rising another 11% on Friday. The stock has been up 41% over the past four days after being highlighted by Barron's as a potential beneficiary of artificial intelligence advancements.
Intuit (INTU): 📉 Slumped 8.4% after issuing cautious guidance for the current quarter, leading to a negative reaction from investors.
Deckers Outdoor (DECK): 👟 Rallied 14.2% on strong quarterly sales growth, demonstrating robust demand for its products.

The Week Ahead: May 27 - 31, 2024

As we look forward to the upcoming week, several important economic data releases are expected, which could have a significant impact on market movements.

Key Economic Data Releases

Tuesday, May 28: Consumer Confidence Index: This index measures consumer sentiment regarding economic conditions and is a key indicator of consumer spending behavior.
Thursday, May 30: Gross Domestic Product (GDP) Estimate: The government's second estimate of Q1 GDP growth will be closely watched. This data provides a comprehensive look at the overall economic health and is crucial for forecasting future economic activity.
Friday, May 31: Personal Consumption Expenditures (PCE) Prices**:** This is the Fed's preferred measure of inflation and will be scrutinized for signs of inflationary pressure. Personal Spending and Personal Income Data: These reports provide insights into consumer behavior and economic momentum.

These data releases will be particularly important as investors seek to gauge the Federal Reserve's next moves regarding interest rates. The Fed's higher-for-longer narrative on interest rates, coupled with mixed signals from recent economic data, has created an environment of heightened uncertainty. Investors will be keenly watching these releases for clues on inflation trends and economic strength.

Key Earnings Reports

Salesforce (CRM): Scheduled to report on Wednesday, May 29. As a Dow member and a leader in cloud computing, Salesforce's results and outlook will be closely watched.
Best Buy (BBY), Costco Wholesale (COST), and Dollar General (DG): These retailers are scheduled to report on Thursday, May 30. Their earnings will provide insights into consumer spending trends and the health of the retail sector.

The earnings from these companies will offer valuable information on how different sectors are performing amid current economic conditions. Particularly, the retail earnings will shed light on consumer behavior and potential shifts in spending patterns.

Conclusion

The market dynamics during the week of May 20-24, 2024, highlighted a mixed but overall resilient performance, particularly in the tech sector, driven by strong showings from mega-cap stocks like Nvidia and Apple. Positive economic data, including better-than-expected durable goods orders and consumer sentiment, provided support despite caution from the Federal Reserve's mixed messages on inflation and interest rates. Upcoming key earnings reports from Salesforce, Best Buy, Costco, and Dollar General will be crucial in providing further insights into the tech and retail sectors, offering a clearer picture of consumer spending trends and broader economic health.

Source:

https://www.schwab.com/learn/story/schwab-market-update

https://www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update

*Disclaimer:

This information is provided for general information purposes only. Consider your investment objectives, financial resources and other relevant circumstances carefully before investing. This is not an invitation or an offer to invest, nor is it financial advice or a recommendation to buy or sell any investment.