What happened in the market: 27 May - 31 May 2024
Aries Yuangga, Wakil Penasihat Berjangka
The week of May 27 - 31, 2024, offered a unique blend of stability and surprise in the financial markets. Investors navigated through a maze of economic indicators, corporate earnings reports, and geopolitical events, all while attempting to gauge the direction of future Federal Reserve policies. This period was marked by an intriguing interplay between the promise of technological innovation and the enduring allure of traditional sectors, leading to a diverse array of market movements and strategic shifts. This article delves into the significant events and trends that shaped the markets during this week, providing a comprehensive analysis of what happened and what to expect in the coming days.
Last Week at a Glance
Last week, the major U.S. stock indexes showed mixed results with the S&P 500 ending its five-week winning streak but maintaining a strong monthly performance. The Dow Jones Industrial Average closed at 38,686, down 1.0% for the week, yet up 2.6% year-to-date, while the S&P 500 finished at 5,278, down 0.5% for the week, with a 10.6% year-to-date increase. The NASDAQ settled at 16,735, down 1.1% for the week but up 11.5% year-to-date, and the MSCI EAFE closed at 2,340, down 0.8% for the week and up 4.6% year-to-date. The 10-year Treasury yield remained at 4.50%, and oil prices dipped to $77.19 per barrel, reflecting a 0.7% weekly decrease but a 7.7% rise year-to-date. The key economic indicators included a 0.3% rise in the PCE report for April, signaling persistent inflation concerns, and a significant drop in the ISM Chicago Business Barometer to 35.4, indicating contraction in economic activity.
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:
Gap (GPS): 🛍️
Performance: Rose 29% after reporting strong earnings that exceeded expectations.
Analysis: Gap's robust performance was attributed to successful cost-cutting measures and strategic adjustments in inventory management, which helped boost profitability despite a challenging retail environment.
Zscaler (ZS): 🔒
Performance: Increased by 8.5% following a quarterly earnings beat.
Analysis: The cloud security company's strong results were driven by heightened demand for cybersecurity solutions amid increasing digital transformation across industries.
Marvell Technologies (MRVL): 📉
Performance: Plummeted by over 10% after reporting weaker-than-expected first-quarter results.
Analysis: Marvell's disappointing earnings were primarily due to supply chain disruptions and softer-than-anticipated demand in key segments, leading to investor concerns about its near-term growth prospects.
Dell Technologies (DELL): 💻
Performance: Dropped 18% as its solid quarterly results were overshadowed by a bleak outlook for the current quarter and full year.
Analysis: Dell's guidance hinted at potential headwinds in its core PC and server businesses, driven by macroeconomic uncertainties and evolving market dynamics.
MongoDB (MDB): 📊
Performance: Fell 24% after lowering its forecasts for the second quarter and full year.
Analysis: The database platform company's revised guidance reflected challenges in customer acquisition and retention, as well as competitive pressures in the data management sector.
The Week Ahead: June 03 - 07, 2024
Key economic data releases for the week ahead include the Nonfarm Payrolls Report on June 7, 2024, with analysts expecting an addition of approximately 185,000 jobs in May, up from 175,000 in April, which will be crucial for assessing labor market health and its implications for consumer spending and economic growth. The ISM Manufacturing PMI on June 3, 2024, will provide insights into the manufacturing sector's performance, with a reading above 50 indicating expansion and below 50 signaling contraction. On June 6, 2024, weekly initial jobless claims will offer a timely snapshot of labor market conditions, with any signs of rising claims potentially indicating economic softening. Additionally, the Federal Reserve's consumer credit report on June 7, 2024, will reveal changes in consumer borrowing patterns, where rising consumer credit can indicate economic confidence and declining credit may suggest caution and reduced spending. Investors will also be closely watching for any statements or signals from Federal Reserve officials regarding future monetary policy, especially as the market anticipates no change to the federal funds rate in the upcoming June 11-12 FOMC meeting, with any comments on inflation, economic growth, or potential rate cuts being scrutinized.
Key Earnings Reports
Bath & Body Works (BBWI) - June 4, 2024:
Expectations: Analysts expect Bath & Body Works to report strong sales driven by new product launches and effective marketing campaigns. The focus will be on same-store sales growth and profit margins.
Hewlett Packard Enterprise (HPE) - June 4, 2024:
Expectations: HPE's earnings will be closely watched for insights into enterprise IT spending trends. Investors will look for updates on its cloud and edge computing segments.
Dollar Tree (DLTR) - June 5, 2024:
Expectations: Dollar Tree's performance will provide a view into the discount retail sector. Analysts will focus on comparable store sales and cost management strategies amid inflationary pressures.
Lululemon Athletica (LULU) - June 5, 2024:
Expectations: Lululemon is expected to report robust earnings driven by strong demand for athleisure apparel. Key metrics to watch include e-commerce growth and international expansion.
Campbell Soup (CPB) - June 5, 2024:
Expectations: Campbell's earnings will shed light on consumer behavior in the packaged food sector. Analysts will look for commentary on input cost inflation and pricing strategies.
Conclusion
The week of May 27 - 31, 2024, demonstrated the financial market's resilience amid a blend of economic indicators, corporate earnings reports, and shifting investor sentiments. Despite mixed performances among major indexes, the underlying trends reflected the interplay between technological innovation and traditional sector stability. Stocks like Gap and Zscaler thrived due to strategic execution and rising demand, respectively, while companies such as Marvell Technologies, Dell, and MongoDB faced significant challenges. Looking ahead, key economic data releases, including the Nonfarm Payrolls Report and ISM Manufacturing PMI, will provide critical insights into the labor market and manufacturing sector's health. Upcoming earnings reports from major companies like Bath & Body Works and Lululemon will offer further clues about consumer trends and corporate performance. As investors navigate these developments, attention will also be on the Federal Reserve's upcoming statements, which could signal future monetary policy shifts. This dynamic environment underscores the importance of staying informed and adaptable in an ever-evolving market landscape.
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.
