Top Story
Market Closes Out May on Another Down Note
• US stocks fell Tuesday in yet another volatile session. It was befitting the month as a whole, during which equities whipsawed back and forth.
• The Conference Board’s consumer confidence index fell slightly in May, hitting a three-month low. Americans say inflation is weighing on their prospects, both at present and over the longer term. Specifically, consumers’ plans to buy homes, appliances, and cars all declined.
• Home prices rose 20.6% year-over-year in March according to S&P Case-Shiller’s index. This is despite higher interest rates, which translate to increased borrowing costs. Meanwhile, the March FHFA house price index showed prices rising 19% from last year. The FHFA also notes new home sales dropped significantly during April.
What to Be on the Lookout for Today
• April’s Job Openings and Labor Turnover Survey or JOLTS is due. In March a record number of people quit their jobs, while job openings rose to an all-time high of roughly 11.6 million. Economists have described this as the “Great Resignation.”
• April’s construction spending will be published. The number rose in March, but less than expected.
• S&P Global will release this month’s manufacturing PMI while ISM will publish its manufacturing index for May. Both figures track activity within the sector.
• Information technology firm Hewlett Packard Enterprise (HPE) will hand in its latest report card. Earlier this month the company renewed its commitment to projects in Europe, where a new factory will develop artificial intelligence and high-performance computing systems aimed at improving the region’s supply chain.
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A Few Headlines That Should Be on Your Radar
America is on the move this summer and the competition is heating up among companies that provide lodging. According to Airbnb (ABNB), urban bookings are rebounding after cratering during the pandemic. That trend could mean good news for an “old school” aspect of the travel sector. Read more >> The supply of electric vehicles is expected to explode in the coming years, but the ability to charge up is not keeping pace. Billions of dollars will be spent to address the issue, but success will likely hinge on fixing previous missteps. There are signs that mistakes involving poor coordination, uneven distribution of dollars, and red tape are being resolved so that projects may move forward. Read more >> A National Bureau of Economic Research paper indicated that a key reason home prices escalated during the pandemic was due to relocating remote workers. Warm cities with lower population density saw their popularity explode, as newly untethered employees sought out an upgraded lifestyle. Read more >> The number of US properties with foreclosure filings in April was 30,674. This is up close to 160% from a year ago and makes April the 12th consecutive month showing year-over-year US foreclosure activity increases. Read more >>Not-So-Breaking News
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Oil prices moved higher following an agreement by EU leaders to cut 90% of Russian oil imports by year end. The ban would headline the European Council’s sixth sanctions package against Russia since its invasion of Ukraine, and is expected to immediately affect 75% of Russian oil imports.
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Paramount’s (PGRE) Top Gun: Maverick took off with a strong showing at the box office during its opening weekend. The estimated $124 million made in the US exceeded by a large margin the $80 million expected.
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Boeing (BA) has settled a contract dispute with long-time customer Norwegian Air. The Nordic company has proceeded with plans to buy 50 Boeing 737 MAX 8 aircraft and agreed to acquire 30 more in the future. Norwegian had threatened to switch to Boeing competitor Airbus (EADSF) while the conflict was ongoing.
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Foxconn expects supply chain disruptions to ease in the coming months as Shanghai’s COVID-19 lockdowns lift. The Taiwanese firm is the world's biggest electronics contract manufacturer and is a player in the global electric vehicle market.
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Kirkland’s (KIRK) missed Wall Street expectations on the top and bottom lines. The home décor and furnishings company’s CEO Steve Woodword blamed weak consumer demand which he attributed to rising interest rates and inflation.
Financial Planner Tip of the Day
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Brian Walsh, CFP® at SoFi