To The Moon

On last day of May (31 May 2024), we saw major indices ended the session near highs, this is because of a surge of buying activity in the last 20 minutes of trading, likely driven by short-covering and month-end positioning.

Some mega cap names that recovered from losses had a significant impact on index performance, though many stocks participated in the late climb. There is significant recoveries included Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOG), all of which rebounded from earlier losses.

Sector Performance Eight Sector Log Gains With More Than 1%

The session continue to maintain an underlying positive bias, which intensified in the final moments of trading. The Invesco S&P 500 Equal Weight ETF (RSP) gained 1.3%, and ten of the 11 S&P 500 sectors closed higher, with eight sectors logging gains greater than 1.0%.

Upside Bias Continue. Treasury Yield Declined With Growth Stocks Struggle

The upside bias followed the release of the April Personal Income and Spending Report, which was better than feared but did not show any improvement in inflation. Treasury yields moved lower in response, supporting the stock market.

The 10-year note yield dropped four basis points today, and 18 basis points in May, to 4.51%. The 2-year note yield settled four basis points lower today, and 16 basis points in May, at 4.89%. Growth stocks struggled today after Dell's (DELL) disappointing earnings report.

Year-over-year PCE inflation rates did not worsen or improve

April Personal Income came in at 0.3% with consensus of 0.3%, the prior was 0.5%. April Personal Spending recorded at 0.2% with consensus of 0.3%, the prior revised to 0.7% from 0.8%.

April PCE Prices reported to be at 0.3% and consensus was 0.3%, the prior 0.3%. April PCE Prices was Core was 0.2% with consensus at 0.3% and prior was 0.3%.

The key takeaway is that year-over-year PCE inflation rates did not worsen or improve, making it unlikely that the Fed would find new confidence that inflation is moving toward its 2% target.

The Chicago PMI for May came in at 35.4 with consensus at 41.0 and the prior figure was 37.9.

What To Look Out This Week

Activist investor Carl Icahn (Trades, Portfolio) has taken a significant stake in $Caesars Entertainment(CZR)$ . While the exact size of the stake and Icahn's intentions remain unclear, the news sent Caesars' shares soaring by 12%. Icahn, known for his aggressive investment strategies, stated that he likes Caesars and owns some stock but would not engage in activism with the company. This development has also positively impacted other casino stocks such as Las Vegas Sands (LVS), MGM Resorts (MGM), and Wynn Resorts (WYNN).

Even with a 12% surge we saw on 31 May 2024, CZR is still trading below 50-day MA period, so this actually present a good buying opportunities, and the next focus would be whether other institutional investors would follow suit.

From the KDJ chart, it is forming an upward trend and there is a BUY signal on 30 May 2024, but I would think the current price is still a potential BUY.

Google has laid off an estimated 100 employees from its cloud computing unit, primarily affecting the "Go To Market" group in the Asia-Pacific region. The layoffs also impacted other units, including consulting, partner engineering, and sustainability. This move follows multiple rounds of layoffs by Google this year as the company continues to evolve its business to meet customer priorities and long-term success.

President Joe Biden announced that Israel has proposed a three-part plan to achieve a cease-fire in Gaza and release all hostages. The plan, communicated to Hamas via Qatar, includes a six-week cease-fire and the release of women and children hostages, followed by negotiations for a permanent cease-fire and Israeli withdrawal. The final phase involves initiating a reconstruction program in Gaza. No immediate response from Israel has been reported.

U.S. crude oil refiners, including $Marathon Petroleum(MPC)$, expect to operate above 90% of their combined processing capacity for the rest of Q2 after completing planned overhauls. This follows an average of 86% capacity utilization in January and February. Analysts predict a profitable summer for refiners, with Marathon aiming for 94% capacity utilization in Q2.

$Vistra Energy Corp.(VST)$ outlined plans to increase its natural gas capacity in Texas by 2 GW, leading to a 5.6% drop in its stock price. Despite investor concerns about potential oversupply, Vistra's shares have performed exceptionally well, hitting an all-time high earlier in the week and quadrupling over the past year. The company's mix of gas and nuclear power plants makes it a unique player in the market.

$CME Bitcoin - main 2406(BTCmain)$ is set to close May in the green for the first time since 2020, despite a weekly decline of 1.8%. The cryptocurrency has traded within a narrow range around the $68K mark, briefly touching $70K earlier in the week. The April Core PCE Price Index data, which matched consensus estimates, also influenced Bitcoin's performance.

$MongoDB Inc.(MDB)$ experienced a 25% drop following its Q1 results, which showed a macro-induced consumption slowdown and slower growth on newer workloads. Despite these challenges, investment firms recommend buying the dip, citing MongoDB's potential for sustained 20%+ revenue growth driven by core and emerging AI growth drivers.

Summary

I would expect market to still trade with positive bias, and we could expect some buying increase this week, and the focus could be in Energy stocks. There might be some movement expected from the crypto stocks if Bitcoin continue into the green from May 2024.

Appreciate if you could share your thoughts in the comment section whether you think market would continue to present positive bias into first week of June 2024?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.