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Market Indexes Up Monday: New Trend Emerging?

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Monday, May 24, 2021

We begin a new week of trading rather slowly, with no major economic releases ahead of the opening bell — or anytime Monday, at all — but indexes starting solidly in positive territory for the first time in three weeks: the Dow is +130 points at this hour, the S&P 500 +20 and the Nasdaq +100. Are we about to see a new narrative play out this week?

The tech-heavy Nasdaq finished last week in positive territory for the first time in a month; the other major indexes were in the red, but not by much. Clearly there is resistance to the downside — especially today, with no economic catalysts to put pressure on still-high relative valuations.

We will get plenty of economic grist for the mill by the end of the week: Case-Shiller home prices, Consumer Confidence, New and Pending Home Sales, Durable Goods Orders, Personal Income and Consumer Spending, a Q1 GDP revision and, of course, Jobless Claims. Keep an eye on Friday’s Personal Income numbers, particularly the Personal Consumption Expenditure (PCE), which the Fed pays much attention to in calculating economic growth.

Bitcoin owners may be breathing a sigh of relief this morning, as the biggest and most conspicuous cryptocurrency is up 16% after having ridden a wild rollercoaster over the weekend: -12% on Friday, +8% Saturday and -11.5% Sunday. The crypto had traded down to 32K at one point, but is now back over 38K. Even with this morning’s boost, however, Bitcoin is still down 32% year-to-date.

And, though we are well past the “marquee name” stage in Q1 earnings season -- excepting NVIDIA (NVDA - Free Report) and salesforce (CRM - Free Report) , which borth report later this week -- we still have another week of new reports filing in. America’s CarMart (CRMT - Free Report) , for instance, posts its results after the closing bell today. The Zacks Rank #3 (Hold)-rated company with a Value-Growth-Momentum score of D, is expected to fetch $2.69 per share — a 99.2% increase from year-ago earnings.

Revenues have a Zacks consensus estimate of $227.60 million, up 16.3% year over year. The company has 151 dealerships in 12 states, and the company has only missed bottom-line estimates once in the past five years, with a trailing four-quarter average beat of 36.56%. It ought to be a good quarter for auto sales after a year of pent-up demand and a quarter featuring government stimulus checks.  

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