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Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research

Stocks Down, But Yesterday's Late Day Earnings Could Support Stocks Today

Stocks closed lower yesterday as debt ceiling worries continue.

At the moment, all of the major indexes are down for the week with two more trading days left to go.

While both sides remain far apart, they insist the U.S. will not default.

In other news, investor favorite Nvidia reported earnings after the close and posted a positive EPS surprise of 18.48%, and a positive sales surprise of 10.5%. Moreover, they are forecasting Q2 revenue to soar to $11 billion (+/-2%), which is well above the consensus going into their report of $7.2 billion. NVDA is capitalizing on the huge demand for chips and servers as generative AI technology is set to transform how companies do business. NVDA was up more than 27% in after-hours trade.

Another investor favorite, Splunk, also reported after the close and posted a positive EPS surprise of 205%, and a positive sales surprise of 4.52%. They too raised guidance for the current quarter by 6%. They were up by roughly 10% in after-hours trade.

We'll get more earnings today with another 179 companies on deck, including marquee names like RH (Restoration Hardware), Costco, Best Buy, Ulta Beauty, and Dollar Tree.

On the economic report front yesterday, MBA Mortgage Applications were down -4.6% w/w, with purchases down -4.3%, and refi's down -5.4%.

And the Survey of Business Uncertainty showed business leaders expecting sales growth to increase by 4.70% over the next 12 months, up from last month's estimate of 4.58%. They see employment growth at 4.54%, up from last month's snapshot of 4.44%.

The FOMC minutes were released yesterday afternoon. In short it showed uncertainty about what to do at the next meeting with 'some' favoring more tightening, and 'several' favoring less. The desire to 'retain optionality' going forward was noted. Nonetheless, it appeared to tilt towards a pause, which was communicated earlier this month in their FOMC announcement.

Interestingly, the minutes also referred to the debt ceiling, saying, 'many participants mentioned that it is essential that the debt limit be raised in a timely manner to avoid the risk of severely adverse dislocations in the financial system and the broader economy.'

On the economic report docket today we'll get the second estimate for Q1 GDP, Weekly Jobless Claims, the Chicago Fed National Activity Index, the Kansas City Fed Manufacturing Index, Pending Home Sales, and Corporate Profits.

Stocks should get a boost today given yesterday's after-market beats. Let's hope there are no pre-market misses to undo it.

Given the uncertainty surrounding the debt ceiling, we could see some added volatility going into the 3-day Memorial Day weekend.

But don't let the volatility get to you.

I know volatility can be tough. And I know many are ready to sell when the market goes down, and afraid to buy when it bounces back up. Especially when fear-based headlines can be found at every turn.

Sadly, too many let their emotions get the best of them. And we all know the damage that can do to a portfolio. Just think of all the people that sold at the lows last year, and all of the gains they left on the table since then.

But mastering your emotions is easier than you think. And there are simple things one can do to learn how to invest with confidence. To learn what they are and how you can apply them to your own trading, be sure to read our latest commentary...

Every Investor Should Do This Now


Kevin Matras

Executive Vice President, Zacks Investment Research


Is Graphite the New Lithium?


Did you know that graphite (NOT lithium) is the largest component of lithium batteries used for EV's? Unfortunately, there are no graphite-producing mines in North America today. This leaves the U.S. at the mercy of China for our vital graphite supply.

See how investors could benefit from the domestic graphite crisis

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