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U.S. futures edge higher on notable inflation data

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U.S. stocks rose slightly before the bell on Monday, poised to build on a series of gains as attention turns to an upcoming inflation report that looks like it could lead to a rate cut.

S&P 500 futures (ES=F) rose about 0.2%, and the tech-heavy Nasdaq 100 (NQ=F) rose about 0.3%. Dow Jones Industrial Average futures (YM=F) remained above the flatline, capping off the best week of the year for the blue-chip index.

Stocks returned to strength in May on the back of better-than-expected earnings and renewed optimism about the Federal Reserve's monetary easing. On Friday, the Dow Jones Industrial Average recorded an eight-day winning streak, but the lack of economic announcements likely played a role.

Markets are becoming more cautious, with investors increasingly pricing in a “no-landing” in which inflation falls short of the Fed's target after recent high-profile inflation data, but the economy continues to grow. ing.

This week will feature a number of potential catalytic economic announcements, with Wednesday's Consumer Price Index update taking center stage. The April CPI update will weigh on whether inflation will persist into the second quarter, with Wall Street betting the report points to a sharper decline and sets the stage for multiple rate cuts this year. It will shed light on.

read more: How does the labor market affect inflation?

Among individual stocks, GameStop (GME) stock soared nearly 40% in premarket trading, fueling the gaming retailer's recent rally as meme stocks once again made headlines. The rise was due to Roaring Kitty, the social media star credited with kickstarting the meme stock craze of 2021, returning from a three-year hiatus.

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  • Here are some interesting facts about Netflix (NFLX) that you probably weren't aware of.

    The company's stock has risen 12% since May 1 and is currently trading at the level it was before the company's disappointing earnings report in late April.

    In a new note this morning, JPMorgan analyst Doug Anmuth said the rebound is due to “1) reported revenue guidance for 2024 and NFLX's decision to no longer report subscriber numbers starting in 2025; 2) an increased sense of security about both decisions, and 2) the knowledge that NFLX will not be seriously affected.” The intensity of AI-driven capital spending like Meta, Alphabet, and Amazon, and his 3) excitement about his Upfront presentation on May 16th.

    The annual upfront is where television networks and streaming services pitch their programming and advertising products to advertisers and agencies.

    Ammuth believes Netflix will make some bullish statements at the event, which could trigger a rise in the stock price.

    “Upfront expects to see an update with more than 23 million monthly active users (MAUs) in its ad tier, and based on our conversations, investors are excited to see more than 23 million monthly active users (MAUs) in the ad tier, including , seems to be seeking more than 35 million to 40 million MAUs in the advertising tier, as well as the latest information on future content plans and NFLX's sports strategy. Finally, the games could get a boost as NFLX has hinted it could host two NFL games on Christmas Day later this year, giving the NFL massive global distribution. Investors in the division are looking forward to the announcement of the 3P demand-side platform, which will impact NFLX's advertising tier and allow the company to aggressively promote its upcoming content.”

  • In a bullish trade, Walmart captures revenue from EvercoreISI

    Walmart (WMT) stock has lagged the S&P 500 over the last month as inflation statistics persist and cast doubt on the purchasing power of U.S. consumers.

    When Walmart announced its earnings results this Thursday morning, there was a lot of talk about the company's extremely conservative leadership.

    But Greg Merrick, a retail analyst at EvercoreISI, is putting those concerns aside and adding Walmart to his list of strategic acquisitions.

    This morning, Merihi said:

    “We believe we are performing at a high level as we pursue initiatives such as digital advertising, Walmart Plus, and automation. In addition to gaining market share among high-income consumers, the company has a fairly steady stream of positive traffic to low- to middle-income consumers. It is thought that Walmart intends to distort constructive comments throughout the year for the reason of gaining market share. Normally, Walmart does not increase EPS for the full year, but a similar sales forecast for the first quarter has been given. We're seeing positivity regarding the underlying momentum of Walmart, which could be especially noticeable in its international business, which continues to have positive double-digit sales due to positive industry commentary. Investors are likely underestimating the company's continued acquisition of shares.

  • Interesting dynamics in the market are starting to form.

    After several years of explosive EPS growth for Mag 7 stocks, the sector is headed for a slowdown this year and next (pictured on the left by RBC strategist Lori Carbasina). Similarly, EPS growth is expected to accelerate this year and next for the other 493 stocks in the S&P 500, after years of stagnation.

    Questions for the future include: Do the other 493 S&P 500 companies represent better value than the Mag 7, as their earnings growth is likely to accelerate again in 2025?

    Does it make sense to nibble on the other 493 stocks in the S&P 500?Does it make sense to nibble on the other 493 stocks in the S&P 500?

    Does it make sense to nibble on the other 493 stocks in the S&P 500? (red blood cells)

  • Save date: May 20th, JPMorgan Investor Day

    The company's stock price rose 8.7% last month on expectations for longer-term interest rates, and all eyes are on JPMorgan's (JPM) investor day on May 20th.

    Jefferies analyst Ken Usdin this morning raised his price target from $215 to $227, while maintaining a buy rating until the investor day. He expects JPM executives to “focus on market share growth, investment spending, and efficiency.”

    “While the net interest income guidance appears to be conservative given the rise in long-term interest rates, we believe JPM continues to delay updating its guide,” Usdin added.

  • Goldman doesn't expect inflation to slow significantly

    Persistent inflation is likely to continue into 2024.

    Ahead of this week's major CPI index report, Goldman notes the potential for disinflation in several key categories as the year progresses. Still, Goldman's macro team expects inflation to remain above the Fed's desired 2% target.

    Jan Hatzius, Goldman's top economist, said:

    “We see further disinflation in 2024 due to auto, home rental and labor market rebalancing, but we expect this to be offset by continued catch-up inflation in health care, auto insurance and housing. We expect year-over-year core CPI inflation to be 3.5% and core PCE inflation to be 2.7%.”



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