In a surprising turn of events, the Dow Jones Industrial Average surged on Friday as the market embraced positive inflation data. However, retail titan Nike (NKE) saw a sharp decline following its earnings report, adding a dash of controversy to an otherwise bullish session. The Dow Jones Industrial Average climbed by 0.2%, the S&P 500 edged up by 0.3%, and the Nasdaq composite showed resilience with a 0.5% gain in early trading.
Market Buzz and Economic Insights
Investor enthusiasm was palpable as the 10-year Treasury yield dipped to 4.27%, while oil prices continued their upward trajectory with West Texas Intermediate futures trading around $82.10 per barrel, reflecting robust market dynamics.
Exchange-traded funds mirrored the optimism, with the Invesco QQQ Trust (QQQ) up 0.5% and the SPDR S&P 500 ETF (SPY) gaining 0.3%.
Inflation Insights and Market Reaction
The Commerce Department’s personal income and outlays report delivered encouraging news, revealing a 0.5% increase in personal income for May, surpassing the 0.4% estimate. The personal consumption expenditures (PCE) price index held steady month-over-month, defying expectations of a 0.1% increase, with an annual rise of 2.6%, in line with forecasts. Core prices, excluding food and energy, ticked up by 0.1% in May, matching the year-over-year increase of 2.6%.
Nike’s Stumble Amid Market Optimism
Nike’s fourth-quarter fiscal report painted a mixed picture, triggering an 18% plunge in its shares. Despite reporting a robust 50% earnings increase to 99 cents per share, revenue slipped 2% to $12.6 billion, sending shockwaves through the market. Adjusted earnings came in at $1.01 per share, outperforming expectations of 84 cents per share, as tracked by FactSet.
Market Momentum and Standout Performers
Thursday’s market action saw the Dow Jones index inching up 0.1%, maintaining its position above the 50-day moving average. The S&P 500 and Nasdaq extended their winning streaks, with the latter narrowly missing a record closing high. The Russell 2000 index stole the show with a robust 1% gain, closing just above its 50-day moving average.
Investor’s Business Daily (IBD) advised maintaining a bullish stance, suggesting a portfolio exposure of 80% to 100% amidst the concentrated strength in market leaders, but cautioned about over-concentration.
Stocks on the Radar
Prominent stocks to watch included Burlington Stores (BURL), Carvana (CVNA), Domino’s Pizza (DPZ), and Meta Platforms (META), alongside Dow Jones stalwarts Amazon (AMZN), Apple (AAPL), Amgen (AMGN), and Microsoft (MSFT).
- Amgen: Attempting to break out above a cup-with-handle base at 133.10, Amgen’s stock faced modest headwinds with a 0.4% decline.
- Burlington Stores: Holding steady above a 232.69 cup-base entry, Burlington’s stock showed resilience despite a minor 0.4% dip.
- Carvana: Surpassing a 129 buy point in a cup base, Carvana’s upward trajectory continued with a 0.7% rise.
- Domino’s Pizza: Navigating a flat base with a 542.75 buy point, Domino’s shares gained 0.4%, reflecting investor confidence.
- Meta Platforms: Breaking out above a 514.01 buy point in a cup-with-handle base, Meta’s stock saw a slight pullback of 0.3%.
Among the “Magnificent Seven” stocks, Nvidia (NVDA) and Tesla (TSLA) surged by 2% and 2.5%, respectively, fueling market excitement. Nvidia maintained a strong position above its split-adjusted alternative buy point at 97.40, while Tesla rebounded sharply from its 50-day moving average.
Dow Jones Leaders: Amazon, Apple, Microsoft
- Amazon: Breaking out above a 191.70 buy point in a flat base, Amazon faced minor resistance with a 0.3% decline on Friday.
- Apple: Extending its winning streak, Apple continued its upward climb with a modest 0.2% gain, well beyond its cup base’s 199.62 buy point.
- Microsoft: Holding steady above a flat base’s 430.82 buy point, Microsoft edged lower by 0.1% early Friday, reflecting mixed sentiment.
As the market navigates through evolving economic indicators and corporate earnings reports, investors are urged to stay vigilant and capitalize on emerging opportunities amidst the backdrop of dynamic market movements and divergent sector performances.
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