The Nasdaq Composite rose slightly on Friday for its fifth consecutive record close, as new data last week showed a continued cooling of inflation and Treasury yields retreated. For the week: The tech-heavy Nasdaq gained 3.2%, while the S&P 500 rose 1.6% and the Dow Jones Industrial Average fell 0.5%. Economic updates helped boost earnings. First, Wednesday's May Consumer Price Index (CPI) came in weaker than expected, holding steady relative to April's reading. Economists had expected a 0.1% gain. A day later, the producer price index (PPI) decreased 0.2% for the month, compared to expectations for an increase of 0.1%. (The CPI measures the prices of a basket of goods and services throughout the US economy, while the PPI is an indicator of the prices that producers obtain for their goods and services in the market.) Both publications were well received by investors. They showed that the Federal Reserve's two-year plan to raise and keep interest rates at high levels to reduce inflation continues to work. The hope is that as prices fall, the central bank will begin to cut rates again. Federal Reserve Chair Jerome Powell highlighted progress to reporters after the FOMC's decision Wednesday to leave rates unchanged. However, he said more data was needed before making cuts. He indicated that a cut would probably be appropriate before the end of the year. The market seems to disagree. As of Friday, the CME FedWatch tool offered the highest odds of two cuts this year: the first in September and another in December. Among S&P 500 sectors, information technology was the week's big winner, advancing nearly 6% thanks to big moves in Club names Apple and Broadcom, as well as Oracle and Adobe. Portfolio heavyweight Nvidia's 8.5% rally following its 10-for-1 stock split on Monday also contributed. On the other hand, the energy sector was the biggest loser, followed by the financial and industrial sectors. Inside the Club, this week we heard from Broadcom, which reported strong quarterly results and announced its own 10-for-1 stock split. Neither portfolio company will report earnings in the coming week. During the first quarter, technology was the big winner, with 89% of companies in the sector reporting earnings above expectations. This is followed by healthcare at 88% and consumer staples at 84%, according to FactSet. On the revenue side, real estate led, with 74% of companies reporting positive revenue surprises, followed by technology at 71% and healthcare at 69%. Here's what we have on our radar for next week: US markets are closed on Wednesday in observance of June 16. Retail sales. May results were released on Tuesday and should shed some light on consumer resilience. Where do people spend? What are they retracting? Investors expect an overall monthly gain of 0.3%, according to FactSet. Industrial production and capacity utilization. This will show how well manufacturing, mining, and electric and gas utilities are doing. According to FactSet, economists expect industrial production to increase 0.3% month-over-month with capacity utilization at 78.6%, up slightly from the previous month. Accommodation. Home construction starts and existing home sales in May dominate the end of the week. Housing costs have been a major source of upward pressure on inflation, so any sign of relief will be welcomed by Wall Street. Profits. While no portfolio companies are reporting, two to keep an eye on are Lennar on Monday and Darden Restaurants on Thursday. Lennar is one of the largest homebuilders in the US, so we can use this release to indirectly provide more clues about the future path of inflation. Ideally, we want to see more supply on the way, as that will be key to easing price inflation, key to Federal Reserve rate cuts later this year. Darden Restaurants, the operator behind Olive Garden, Longhorn Steakhouse, Yard House and more, will give us another look at consumer spending. Monday, June 17 After the bell: Lennar (LEN), La-Z-Boy (LZB) Tuesday, June 18 8:30 am ET: Retail sales 9:15 am ET: Industrial production and capacity utilization Before the bell : Americas CarMart (CRMT) After the bell: KB Home (KBH) Wednesday, June 19 US stock markets are closed in commemoration of June 16. Thursday, June 20 8:30 a.m. ET: Initial unemployment claims 8:30 a.m. ET: Housing starts Before the bell: Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), Jabil (JBL) After of the Bell: Smith & Wesson (SWBI) Friday, June 21 10:00 am ET: Existing Home Sales Before the Bell: CarMax (KMX), FactSet (FDS) (See here for a complete list of Jim's stocks Cramer's Charitable Trust). subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. 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A trader works, as a screen shows a press conference by Federal Reserve Board Chairman Jerome Powell following the Fed's rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, USA, on January 31, 2024.
Brendan McDermid | Reuters
He Nasdaq Composite inched higher on Friday for its fifth consecutive record close, as new data last week showed a continued cooling in inflation and Treasury yields retreated.
