Last week, as the indexes began to show weakness, all eyes were on the March highs. Bullish traders hoped those levels would provide strong support, and while things were initially looking dicey from the one-two punch of lower-than-expected GDP numbers on Thursday and PCE numbers on Friday, the week ended with a face-ripper rally and key levels being held. In other news:
- Trump found guilty on 34 felony counts
- COP (ConocoPhillips) acquires MRO (Marathon Oil)
- T+2 becomes T+1
While the indexes were certainly showing weakness initially, there were some signs that this pullback was beginning to get a little long in the tooth. Perhaps the lows are in? Let’s dig into the charts and see how the month closed!
Weekly Analysis
SPY (SPDR S&P 500)
After failing below the March highs, the SPY ETF looked to be weakening into the month’s end but a late-day rally on Friday allowed this index to find support at the 21-day EMA and close at $527.37 (–0.40%). Additionally, the new 14-day lows list recently flashed a hot reading above 50%, which has led to sharp bounces higher over the past year.
QQQ (Invesco QQQ Trust)
Much like the SPY, the QQQ ETF struggled throughout the week, briefly trading below the March highs and the 21-day EMA. Despite that, the rally on Friday pushed this index to close the month at $450.71 (-1.58%), above both of those key levels. As has been the case throughout the last year, the percentage of names making new 14-day lows increases sharply, it has acted as a precursor to important bottoms.
IWM (iShares Russell 2000)
After multiple weeks of underperformance, the small caps faired the best this week, going inside on the month and closing at $205.77 (+0.16%). Much like its peers, the price managed to find support at the 21 EMA despite 42% of names making new 14-day lows this week.
Earnings
Notable Results
ULTA (Ulta Beauty)
- EPS: $6.47 vs $6.22 est
- SALES: $2.73B vs $2.72B est
COST (Costco)
- EPS: $3.78 vs $3.70 est
- SALES: $58.52B vs $58.07B est
MRVL (Marvel Technology)
- EPS: $0.24 vs $0.25 est
- SALES: $1.16B vs $1.18B est
DELL (Dell)
- EPS: $1.27 vs $1.26 est
- SALES: $22.24B vs $21.67B est
BBY (Best Buy)
- EPS: $1.20 vs $1.08 est
- SALES: $8.85B vs $8.96B est
CRM (Salesforce)
- EPS: $2.44 vs $2.38 est
- SALES: $9.13B vs $9.15B est
ANF (Abercrombie & Fitch)
- EPS: $2.14 vs $1.73 est
- SALES: $1.02B vs $963.26M est
CHWY (Chewy)
- EPS: $0.31 vs $0.07 est
- SALES: $2.88B vs $2.85B est
DKS (Dicks Sporting)
- EPS: $3.30 vs $2.95 est
- SALES: $3.02B vs $2.94B est
BMO (Bank of Montreal)
- EPS: C$2.59 vs C$2.77 est
- SALES: C$7.99B vs C$8.05B est
CAVA (Cava)
- EPS: $0.12 vs $0.05 est
- SALES: $256.30M vs $245.94M est
RY (Royal Bank of Canada)
- EPS: $2.17 vs $2.02 est
- SALES: $10.50B vs $9.90B est
What’s Happening Now
SPY (S&P 500)
Tech stocks dominated the month of May, returning an impressive 7.84%, with the SPY buoyed by robust returns from Solar, Utility, and Semiconductor stocks. NVDA also continued its historic run, ballooning over 30% after reporting blowout results from Q1.
TSLA (Tesla)
Tesla is the only MAG 7 stock in negative territory year-to-date, down over 29%. However, June has historically been Tesla’s strongest month since its IPO, with an average gain of 10.2% and the highest likelihood of positive returns over its 14-year history.
LMT (Lockheed Martin)
Despite a $160 billion backlog and rising geopolitical tensions, Lockheed Martin shares have stagnated for the past two years. The pain may continue as we enter June, its historically weakest time of the year and the only month presenting a long-term negative outlook.
Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official TrendSpider Newsletter.
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