May 29, 2024

S&P 500 poised for new record with Powell back in spotlight

US stocks rose on Thursday, staying upbeat ahead of a second day of closely tracked testimony from Federal Reserve Chair Jerome Powell.

Techs took the lead again with the Nasdaq Composite (^IXIC) gaining as much as 1.4%, while the S&P 500 (^GSPC) added almost 1% to touch record highs during the session. The Dow Jones Industrial Average (^DJI) gained 0.5%.

Stocks have risen the past two sessions as the market assessed Powell’s questioning by lawmakers on the economy and monetary policy, which has brought no bad news or surprises. The Fed chief stuck to repeating the message that the central bank is in no hurry to ease policy, though he said rate cuts are likely to come this year.

On Thursday, this time before the Senate Banking Committee, the Fed Chair reiterated the central bank’s intentions on rate cuts, provided inflation data continues to show continued cooling.

On the economic data front Thursday, jobless claims released came in unchanged at 217,000 for the week ending March 2. Continuing claims registered just above 1.9 million, about 8,000 higher from its prior print. The crucial non-farms payroll report is due for release Friday morning.

Meanwhile, gold (GC=F) rose for the fifth day, hitting a fresh high above $2,160 as the prospect of a rate cut gave fresh impetus to the record-setting rally.

Among corporates, shares of Victoria’s Secret (VSCO) plunged over 25% after the lingerie maker’s sales guidance fell short of expectations.

Live10 updates

  • Communication Services and Technology lead market rally

    Stocks were higher on Thursday, techs took the lead again with the Nasdaq Composite (^IXIC) gaining as much as 1.4%, while the S&P 500 (^GSPC) added almost 1% to touch record highs during the session. The Dow Jones Industrial Average (^DJI) gained 0.5%.

    On a sector bass, the Communications Services (XLC), Technology (XLK) and Materials (XLB) sectors led the charge all rising over 1%.

    Source: Yahoo FinanceSource: Yahoo Finance

    Source: Yahoo Finance

  • Trending tickers on Thursday

    New York Community Bankcorp (NYCB)

    The stock gained 7% on Thursday after the regional lender cut its dividend to one penny per share as part of its overhaul plan. New York Community Bancorp said it lost 7% of its deposits over the last month. The disclosure came one day after the lender announced a new CEO and a capital raise from a group led by Steven Mnuchin, the former US Treasury Secretary and Goldman Sachs partner.

    Victoria’s Secret (VSCO)

    Shares of the lingerie maker sank as much as 30% during the session after the company’s sales guidance came in short of analyst expectations. Victoria’s Secret is forecasting net sales to be about $6 billion this year, or down low-single digits compared to last year.

    Meta (META)

    Shares of the social media giant was among the top 5 trending tickers on Yahoo Finance on Thursday. The stock touched new highs. Meta shares are up about 44% year-to-date. The stock is the second highest performer this year among the “Magnificent 7” group, behind Nvidia (NVDA), which is up 85% during the same period.

  • More homes are up for sale this spring, but rising rates could keep buyers on sidelines

    Yahoo Finance’s Dani Romero reports the housing market’s spring selling season could be more robust this year as inventory picks up steam. However rising rates cut keep buyers on the sidelines.

    New research from shows that the number of homes actively for sale in February jumped 14.8% compared to the same month last year. That’s the fourth consecutive month of increases for homes listed for sale on the market.

    “The fact that we’re starting the year with more homes for sale than we’ve seen on the market since 2020 is a really good step,” Danielle Hale, chief economist of, told Yahoo Finance in an interview.

    Inventory is still down nearly 40% compared to pre-pandemic levels. Meanwhile borrowing costs are ticking back up. The average for a 30-year fixed loan was 6.94% as of last Thursday, up from 6.9% the prior week, according to Freddie Mac data.

    Read more here.

  • Gold extends rally as Powell reiterates likely rate this year

    Gold (GC=F) extended its rally hovering near its all time high as Fed Chair Jerome Powell reiterated policymaker’s intention to cut rates this year, provided inflation data comes in as expected.

    The precious metal rose for the fifth day, touching a record past $2,170 per ounce before pairing gains. Futures were trading just around $1,162 by 11:00 AM Eastern.

    The precious metal tends to rise when interest rates head south and the US dollar eases. On Thursday morning Fed Chair Jerome Powell reiterated to lawmakers the central bank’s intention to lower rates later this year, provided inflation data comes in as expected.

    The greenback edged lower on Thursday, supporting a higher price for the commodity invoiced in US dollars.

  • Nvidia stock touches new record, surpasses $900 level

    Nvidia (NVDA) stock gained more than 2% on Thursday, touching new all-time highs. Shares of the AI darling surpassed the $900 level to hit a peak of $909.92 each during the morning session.

    Nvidia is up 88% year-to-date. The semiconductor giant has been the best performer among the “Magnificent 7” stocks this year.

    Social media giant Meta (META) also hit new highs on Thursday. The stock is up 46% year-to-date.

  • Stocks open higher ahead of Fed Chair’s second day of testimony

    The major averages gained on Thursday ahead of Fed Chair Jerome Powell’s second day of testimony before congress.

    The Nasdaq Composite (^IXIC) rose 0.7%, while the S&P 500 (^GSPC) gained 0.6%. The Dow Jones Industrial Average (^DJI) also ticked up 0.5%.

    The rise comes a day after Jerome Powell was questioned by lawmakers on the economy and monetary policy. Powell reiterated that policymakers are in no rush to ease policy, but rate cuts are likely to come this year. Friday’s jobs report will provide investors with clues on the timeline for when rate cut could come.

    Meanwhile bitcoin (BTC-USD) hovered above $67,000 on Thursday after hitting fresh highs earlier this week.

  • NYCB lost 7% of deposits in one month, highlighting challenges of new rescue

    New York Community Bancorp (NYCB) lost 7% of its deposits over the span of a month, underscoring the challenges facing a new investor group led by Steve Mnuchin as it outlined its turnaround strategy Thursday.

    Yahoo Finance’s David Hollerith reports the bank’s disclosure in an investor presentation shows total deposits had dropped to $77.2 billion as of March 5, compared with $83 billion that it had on Feb. 5.

    Roughly 80% of its deposits are currently backstopped by insurance from the Federal Deposit Insurance Corporation, while 20% are uninsured. It lost a $7.8 billion in uninsured deposits over the last month.

    The disclosure came one day after NYCB made a dramatic attempt to regain investor confidence by announcing a new CEO and a $1 billion infusion from a group led by Mnuchin, a former US Treasury Secretary and Goldman Sachs partner.

    NYCB shares were relatively flat in pre-market on Thursday after popping more than 7% in the prior session.

    Read more here.

  • In the penalty box for a long time: Victoria’s Secret

    The Amazon (AMZN) bra-buying trade.

    Victoria’s Secret (VSCO) truly had a disastrous earnings day last night, not unlike what happened at fellow mall dweller Foot Locker (FL) just a few hours earlier. Shares of the intimate apparel player are crashing almost 30% in the pre-market, and it’s the right move.

    Management cited no improvement in sales trends in February from the fourth quarter’s 6% decline.

    JP Morgan analyst Matt Boss — who downgraded VSCO today — added the below section into his research note to clients that caught my attention. It appears VSCO is losing further market share to Amazon, a battle the company is unlikely to win. The problem is structural, in my view.

    “Worth noting on the intimates industry data, management cited the Sports Bra category outpacing Non-Sport (i.e. Structured Bras), with the broader Intimates total addressable market split 30% Sports Bras vs. 70% Non-Sport (relative to VSCO over-indexing to Non-Sport bras currently). To that end, management noted the overall intimates market down mid-single-digits in 4Q reflected a shift towards Value/Amazon as a result of a challenged consumer, in addition to sportswear players such as Lululemon (LULU) taking share in the Sports Bra category.”

    Despite the terrible quarters from VSCO/FL, there are retailers in the mall that are winning.

    Take a look below at what Abercrombie & Fitch (ANF) CEO Fran Horowitz told me after another quarter of double-digit sales gains on Wednesday.

  • Today’s eye-popping analysis of the day…

    Maybe it’s time to revisit the Microsoft (MSFT) sell-off.

    Over the last 25 trading days, Microsoft shares are off by 0.4% compared to a 4% advance for the S&P 500. The broader Mag 7 has been trading on the shaky side of late, and Microsoft hasn’t been immune.

    Some new projections from EvercoreISI analyst Kirk Materne on Microsoft’s AI opportunity could reawaken the bull case.

    Here’s what he said in a new note to clients today:

    “When aggregating our bottoms up Gen AI analysis and taking a five year view, we now estimate Gen AI could drive ~$82.5 billion in incremental revenue in CY28 for Microsoft based on our ‘base case’ scenario, which represents a 24% uplift to our CY28 revenue estimate (assuming a 9% revenue CAGR from ’23-’28 for ‘core’ Microsoft). This would also represent $5.10 in incremental EPS assuming a 45% incremental net margin – just below incremental margins in prior years. Our ‘bull case’ scenario indicates an incremental revenue opportunity of $142.8 billion and $12.07 in incremental EPS. Our updated CY27 incremental AI revenue estimate of $54.6 billion is $4.2 billion higher than our prior ‘base case’ forecast from June 2023. Bottom line: The AI monetization opportunity is off to a good start but we are still in the very earnings and based on our analysis, we expect Gen AI will keep an upward bias on Microsoft’s revenue and EPS estimates for the foreseeable future.”

    Materne rates Microsoft at out-perform with a $475 price target, 17% above current levels.

  • Deutsche Bank gets on board the bitcoin rocket ship

    All aboard.

    The Deutsche Bank team is out with a note today looking at five reasons why bitcoin prices have a lot more room to run. It’s too early in the day to put you back to sleep by detailing all five reasons, so let me zero in on one: April’s potential bitcoin halving event.

    The investment bank is calling attention to the bullish action in bitcoin around prior halving events:

    “In the 30 days prior to the November 2012 halving, prices rose by 5%. A more substantial 13% gain was seen ahead of the July 2016 event. Most recently, there was a sizable 27% price increase in the month before the May 2020 halving.”

    A helpful timeline chart to see how this has historically played out:

    The bitcoin bulls await another halving in April. The bitcoin bulls await another halving in April.

    The bitcoin bulls await another halving in April. (Deutsche Bank)

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