Stocks mixed as focus turns to inflation data

Live9 updates

• Tue, May 28, 2024 at 12:00 PM EDT

  Stocks on pace for best monthly performance of 2024

  Stocks traded mixed on Tuesday to kick off a shortened holiday trading week.

  The tech-heavy Nasdaq Composite (^IXIC) led the day, up about 0.5%. The benchmark S&P 500 (^GSPC) hugged the flatline after its fifth straight week of gains while the Dow Jones Industrial Average (^DJI) fell about 0.4%. Stocks are currently on pace to secure their best month of the year.

  Meanwhile, treasury yields moved higher after a rebound in consumer confidence. The 10-year treasury yield (^TNX) nudged about 3 basis points higher to trade near 4.%.

  The latest index reading from the Conference Board came in at 102, above 97.5 in April and higher than the 96 economists surveyed by Bloomberg had expected.

  The index was buoyed by a strong labor market and marked the first increase of consumer confidence in four months. Still, “for the fourth consecutive month, the Expectations Index was below 80, the threshold which usually signals a recession ahead,” The Conference Board warned.

• 

  Tue, May 28, 2024 at 11:45 AM EDT

  Nvidia shares climb above $1,100 for first time ever

  Nvidia (NVDA) shares traded above $1,100 for the first time ever on Tuesday.

  The milestone moment comes as the stock gained about 5% after Elon Musk’s artificial intelligence startup xAI raised $6 billion in a Series B funding round, the company announced in a blog post. The funding brings the valuation of xAI to $24 billion.

  The increase of AI competition has continued to boost Nvidia’s growth rate as the chip maker continues its record-setting rally.

  Last week, Nvidia reported first quarter results that impressed Wall Street. The company also announced a 10-for-1 stock split and an increased dividend.

• 

  Tue, May 28, 2024 at 11:15 AM EDT

  GameStop shares surge on completion of nearly $1 billion stock sale

  GameStop (GME) stock surged as much as 22% on Tuesday with shares opening at around $23. The moves come after the video game retailer said it raised almost $1 billion from its latest equity offering.

  Although shares are still well below the near $65 level reached earlier this month during a short-lived meme rally, the stock action reflects investor exuberance over the meme trade.

  Yahoo Finance’s Ines Ferré reports:

  “If this were a normal market, people would be a little freaked out,” Steve Sosnick, Interactive Brokers chief strategist told Yahoo Finance.

  He added, “You don’t sell stock into the market if you think your stock is undervalued. You do it when you think your stock is overvalued.”

  GameStop is a heavily shorted stock, with short interest just above 21% of the float.

  The company took advantage of mid-May’s unexpected meme rally, selling 45 million shares to bring in about $933 million, according to a Friday statement.

  GameStop said it intends to use the net proceeds for general corporate purposes, which may include acquisitions and investments.

  The offering was first announced on May 17 along with the company’s preliminary financial results, sending shares tanking as much as 30% that day.

  The offering was seen as a smart move by some Wall Street analysts amid the video-game retailer’s struggling financials. GameStop’s quarterly sales fell sharply from the year earlier period, according to its most recent earnings report.

• 

  Tue, May 28, 2024 at 10:38 AM EDT

  San Diego sees highest gains in home prices

  As home prices notched a new all-time high in March, certain cities remained more susceptible to rising costs.

  Regionally, San Diego continued to report the highest year-over-year gain among the 20 major cities, rising 11.1% in March. New York and Cleveland also increased 9.2% and 8.8%, respectively.

  Elevated mortgage rates, high home prices, and limited housing stock have challenged homebuyers. In March, mortgage rates hovered around the mid-6% range. Last week, they fell below 7% for the first time since early April.

  Despite pent-up demand for homes, low inventory remains a problem, which hasn’t allowed home prices to ease. But that dynamic is expected to change.

  “Although we expect mortgage rates to drift lower in the next few years, we also expect inventory to gradually normalise which should help cool the market,” Thomas Ryan, North American economist at Capital Economics, wrote in a note to clients after the release. Ryan and his team expect home prices to climb by 3% in 2025 and 2.5% in 2026.

• 

  Tue, May 28, 2024 at 10:28 AM EDT

  Home prices hit new records, data shows

  The seasonally adjusted S&P CoreLogic Case-Shiller national home price index (HPI) rose 0.3% month over month in March and jumped 6.5% on a year-over-year basis — the second strongest annual gain since late 2022, Oxford Economics said in a note to clients following the data’s release.

  “We expect home price growth to remain positive in the quarters ahead, with risks skewed to the upside,” Oxford Economics lead economist Bernard Yaros wrote. “Scarce supply in the resale market, a sturdy labor market, and pent-up demand from Millennials aging into their prime household-formation years argue for potentially firmer house price gains than in our baseline forecast.”

  According to the data, prices in the 20 biggest US metro areas hit another all-time high in March.

  

  Yaros added that although he expects “declines in mortgage rates as the first rate cut by the Federal Reserve comes into view” prices should continue to remain elevated amid a “historically tight” supply of homes for sale.

  Meanwhile, the seasonally adjusted Federal Housing Finance Agency (FHFA) House Price Index also rose during the month of March but at a slower pace compared to previous months. The index climbed just 0.1% after rising 1.2% month over month in February.

  “Though base effects have started to become less favorable for the FHFA index, it is still rising on an annual basis faster than it did for most of 2023,” Yaros said.

• 

  Tue, May 28, 2024 at 10:08 AM EDT

  Consumer confidence rebounds for first time in 3 months

  Consumer confidence unexpectedly rose in May.

  The latest index reading from the Conference Board was 102, above 97.5 in April and higher than the 96 economists surveyed by Bloomberg had expected. The May reading ended three months of declines for the index.

  “Consumers’ assessment of current business conditions was slightly less positive than last month,” the Conference Board chief economist Dana Peterson said in the release. “However, the strong labor market continued to bolster consumers’ overall assessment of the present situation. Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get.'”

  Peterson added: “Fewer consumers expected deterioration in future business conditions, job availability, and income, resulting in an increase in the Expectation Index.”

• 

  Tue, May 28, 2024 at 9:32 AM EDT

  Dow falls, Nasdaq gains at open

  US stocks opened mixed on Tuesday, with tech serving as a bright spot ahead of a critical inflation report due later this week.

  The benchmark S&P 500 (^GSPC) climbed about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) added roughly 0.4% after solid closing gains on Friday. The Dow Jones Industrial Average (^DJI) was the biggest laggard of the morning, slipping 0.3%.

• 

  Tue, May 28, 2024 at 6:53 AM EDT

  Foot Locker isn’t out of the woods

  Foot Locker (FL) has had a horrendous 12 months.

  Poor financial performances have led to surprisingly poor outlooks, sending shares down 16% in the past year.

  The Street is bracing for another dreadful quarter from the sneaker and sportswear retailer when it reports Thursday morning.

  Evercore ISI analyst Michael Binetti said investors should expect a “very tough quarter.” The company could warn again for the full year.

  He pointed to several reasons why:

  “In addition to pressured low-income consumers, we think key product launches like Air Max DN underperformed, and the recent Jordan 4 Industrial Blue is selling below MSRP in the resale channel ($185 vs $215 MSRP).”

• 

  Tue, May 28, 2024 at 6:47 AM EDT

  Evercore ISI’s take on Trump 2.0 tariffs

  We have started to see Wall Street crunch the numbers on the economic impact of the new tariffs that former President Trump would be keen on implementing if he were to win a second term.

  Today Evercore ISI weighs in with its take:

  “Presidents rarely enact or implement the full entirety of any campaign idea and Trump in particular likes to use bold ideas as a launching off. Nevertheless, it is critical to understand what a dramatic starting point Trump has put forward as that has implications for where we could ultimately land. Taken at face value, the combination of the proposed 10% across-the-board tariff and the 60% China tariff would lead to an overall U.S. weighted average tariff rate of nearly 17%, the highest since the 1930s Smoot-Hawley era. On a static basis (i.e., not assuming any dynamic economic effects), tariffs would rise from 0.3% of GDP to 1.9% of GDP – an increase of more than $400 billion annually. Such a dramatic move would almost certainly lead to major retaliation by trading partners.”