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We look to open the final trading day for the week higher, after a Thursday session in the green that brought the blue-chip Dow to all-time closing highs. Promises of an end to the war in Iran joins anticipation over the pending SpaceX IPO, which is expected to blow away all other market launches with a reported $2 TRILLION market cap. The Dow is up another +340 points, the S&P 500 is +28, the Nasdaq +106 and the small-cap Russell 2000 is +17 points currently.
It was a quieter week of earnings reports, even with NVIDIANVDA and Walmart WMT having put out quarterly numbers Wednesday and Thursday, respectively. We also saw economic reports that, while less “important” than the CPI Inflation Rate we saw a week ago or the Jobs Week coming a couple weeks from now, helped illustrate where we are on the housing front and in consumer outlook.
Economic Report Rundown: Housing and Consumer Trends
Homebuilder confidence improved slightly for May, but off dismal levels from the prior month — when the realities of the Iran war had begun to cumulatively take hold. Pending Home Sales for April came in higher than estimates, but still down a tad month over month. Housing Starts and Building Permits only saw growth on Multi-family; Single-family homebuilding remained recessed for the month.
May S&P Services and Manufacturing reports yesterday moved in opposing directions, but likely not what you’d think: Services dipped 10 basis points (bps) to 50.9 — still holding onto that above-50 threshold for now — while Manufacturing saw a boost up to 55.3, nicely higher than the projected 53.7 and up 80 bps month over month.
After today’s opening bell, we’ll get the final print on U.S. Consumer Sentiment for May from the University of Michigan household survey. Initially, we saw an all-time low 48.2 — only the second straight sub-50 level in this index’s 74-year history. Consumer Sentiment is -3.21% month over month and -7.66% year over year, as ever-increasing gasoline prices have put a dent into the middle-class (and working class) economies, without yet seeing actual light at the end of this tunnel.
In honor of Memorial Day on Monday, stock markets will be closed. Thus, Zacks’ Ahead of Wall Street will take a breather that day, as well. The final trading days of the month await us; May has been decent but flattish compared to April’s impressive surge. We’ll also have a new Fed Chair, Kevin Warsh, who gets sworn in at the White House today. Outgoing Fed Chair Jerome Powell plans to stay on the FOMC as a Fed governor, at least for now.
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GTX stands to benefit from diversification into higher-margin adjacencies, continued turbo share gains, margin expansion and increasing zero-emission optionality.
Burlington Stores' ability to consistently grow its footprint and capitalize on high-performing new locations positions it well for sustained future growth.
Scale, pricing gains, rising total loss rates, Purple Wave growth, and technology investment support durable, steady global fee-based revenue expansion.
Aerospace and industrial demand trends support growth, while automation, portfolio actions and capital returns reinforce longer-term earnings resilience through cycles.
Product differentiation, data center interconnect ramps, LoRa platform expansion and improving cash generation support a steady growth outlook overall.
AI adoption, enterprise wins, strategic partnerships, and expanding usage model support growth, while improving financial profile enhances long-term operating leverage potential.
AI-driven data center buildouts, expanding capacity and services, disciplined pricing and productivity, and stronger finances support Vertiv’s long-term growth at scale.
Presence across diverse end markets, compelling product portfolio, strong foothold in the automotive and industrial sectors, benefits from CHIPS Act funding, robust cash flow and impressive shareholder return policy are positives.
Elevated expenses, mainly due to ICICI Bank’s initiatives to digitize banking operations, are expected to adversely impact bottom-line growth. Weak credit quality is another near-term concern.
BioPharma’s softness, macroeconomic conditions in China, competitive pressures and adverse currency impacts pose a threat to Bio-Rad’s business performance.
Alibaba's business structure involves certain risks due to the strict laws in China, which along with rising infrastructure costs, increasing competition and integration risks are concerns.
Bath & Body Works, Inc. (BBWI)Downgraded: 05/20/26
Bath & Body Works faces broad demand weakness, margin pressure, and reduced guidance as promotions, tariffs, and soft consumer trends weigh on performance.
Persistently mounting expenses due to higher commission fees are likely to limit KKR & Co.’s bottom-line growth. Its unfavorable ROE compared with the industry’s average is a concern.
Soft housing turnover, energy-driven inflation and intense competition restrain volumes and pricing, while currency and restructuring costs add risk ahead.
Regulatory scrutiny, premium valuation compared with peers, ongoing SBC and investment spending and execution complexity are likely to materially cap upside for Robinhood and increase volatility.
The company faces headwinds in the form of a high inflationary environment, competitive pressures and significant reliance on a limited number of customers.
Apple Intelligence integration, record Services, expanding enterprise tools, and payments reach support Apple’s recurring revenue, backed by ongoing shareholder capital returns.
Innovative Medicine unit is showing a growth trend, driven by existing products like Darzalex, Tremfya and Erleada and continued uptake of new launches, including Spravato, Carvykti and Tecvayli.
AI factory demand, fast product cadence, broader customers, software attach and substantial capital returns support NVIDIA’s upside despite ongoing execution risks.
Advertising scale, broader entertainment formats, and technology-led product upgrades support revenue growth while disciplined margins and buybacks add cash durability.
Broadcom is a leading player in the semiconductor market based on its expanding product portfolio, multiple target markets, accretive acquisitions and strong cash flow.
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