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Nasdaq Pre-Market Basks in NVIDIA's Shine

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Thursday, May 23rd, 2024

Pre-market futures are up this morning. The after-effects of NVIDIA’s (NVDA - Free Report) latest earnings release yesterday — putting something of a cherry on top of yet another better-than-expected earnings season — have helped bolster the Nasdaq in the early trading hours. While NVIDIA, which reported an astonishing +595% earnings growth year over year, is up +7% in today’s pre-market, it has also bolstered related companies in the tech A.I. space, such as Super Micro Computer (SMCI - Free Report) , which is up +6% at this hour.

The Nasdaq is currently up +230 points. It is the only index not to have taken a slight step backwards in yesterday’s trading, and NVIDIA’s pending Q1 release had something to do with this, as well. Percentage-wise, the Nasdaq in the past month has gained as much as the Dow and S&P 500 combined. Ahead of the opening bell today, the Dow is +60 points and the S&P +38. It has been proving tough to rest the bullish market narrative away from the prospects of A.I. growth, which NVIDIA currently spearheads.

Initial Jobless Claims are out this morning. Again the numbers are well-behaved, coming in at 215K last week, below the 220K expected and the slightly upwardly revised 223K from the previous week. This 215K figure is the lightest we’ve seen in a month, and more notable than just a couple weeks ago, with new jobless claims climbing above 230K threatening to bring in a new median. As it happens, 215K is pretty much right in the middle of where initial claims have happily existed going back to late last summer.

Continuing Claims remained below 1.8 million for yet another week. This metric — reported a week in arrears from initial claims — reached 1.794 million in this latest print, higher than the downwardly revised 1.786 million from the previous week. Recent lows and highs both came within a couple weeks of each other in January of this year: 1.83 million and 1.73 million. For some perspective, basically any long-term jobless claims under 2 million per week is consistent with a healthy labor market.

After today’s open, new flash PMI reports hit the tape. Services for May are expected to come in slightly higher month over month — 51.6 vs. 51.3 posted a month ago — while Manufacturing is expected to hold its previous 50.0. This metric may get some extra attention today, especially if it comes in below estimates, as the 50-mark is breakeven between growth and loss. Recent consumer data indicating some reticence from paying higher prices may show up in data like flash PMI prints like these.

Finally, New Home Sales for April are expected to take a step back, to 675K from last month’s 693K (which was the highest print since September of last year). We haven’t notched above 700K since last July, and as other housing data indicates, we are experiencing some softness in this sector as well. As long as mortgage rates remain above +7%, it will keep a significant number of prospective home buyers on the sidelines. To what extent? That’s what today’s report will tell us.

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