Market flowers in May

  • S&P 500 ends week less than 1% below record close
  • Utilities lead again, tech lags, gold makes a move
  • This week: CPI and PPI, retail sales, retail earnings

Mixed earnings results and a virtually empty economic calendar failed to slow the stock market last week, as bulls pushed the major US indexes close to record levels just days before the latest inflation data is due to hit the Street.

The S&P 500 (SPX) added to what has been, so far, a very bullish May with its third-straight up week, leaving the index just a little below its late-March all-time high:

Chart 1: S&P 500 (SPX), 3/7/24–5/2/24. S&P 500 (SPX) price chart.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest in an index.)

The headline: S&P 500 challenging records with inflation on deck.

The fine print: All S&P 500 sectors gained ground last week, but the most defensive sector, utilities, led the market by a fairly wide margin.

The number: 8. Coincidence or not, Friday was the eighth trading day of May, which has sometimes marked the beginning of a period of mid-month weakness. Through Friday, the SPX was up 3.7% for the month, more than six times its median gain for the first eight trading days of May since 1957.It was also the Cboe Volatility Index’s (VIX) eighth day in a row with a lower close.

The scorecard: The Dow Jones Industrial Average (DJIA) led the market last week, getting a boost from Amazon’s (AMZN) return to record highs:

US stock index performance for week ending 5/10/24. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Sector returns: The strongest S&P 500 sectors last week were utilities (+4.2%), financials (+3.2%), and materials (+2.7%). The weakest sectors were consumer discretionary (+0.2%), information technology (+1.4%), and energy (+1.5%).

Stock movers: Perficient (PRFT) +52% to $73.26 on Monday, Novavax (NVAX) +99% to $8.88 on Friday. On the downside, Eyepoint Pharmaceuticals (EYPT) -43% to $11.20 on Monday, DoubleVerify (DV) -39% to $18.78 on Wednesday.

Futures: A Friday sell-off left June WTI crude oil (CLM4) with a slight gain for the week at $78.26. After a big Thursday-Friday rally, June gold (GCM4) closed Friday up more than $67 for the week at $2,375. Week’s biggest gainers: July cocoa (CCN4) +9.2%, June cheese (CSCM4) +7.1%. Week’s biggest decliners: May VIX (VXK4) -7.1%, May ether (ETHK4) -6.1%.

Coming this week

The focus will be on inflation—the consumer price index (CPI) and producer price index (PPI)—but this week’s stacked economic calendar also includes retail sales, housing numbers, and industrial production data:

Monday: New York Fed Consumer Inflation Expectations
Tuesday: NFIB Small Business Optimism Index, Producer Price Index (PPI)
Wednesday: Consumer Price Index (CPI), Empire State Manufacturing Index, Retail Sales, NAHB Housing Market Index, Business Inventories
Thursday: Housing Starts and Building Permits, Import and Export Prices, Philadelphia Fed survey, Industrial Production and Capacity Utilization
Friday: Leading Economic Indicators

This week kicks off the retail portion of earnings season:

Monday: Apogee Therapeutics (APGE), Disc Medicine (IRON), Inovio Pharmaceuticals (INO), Avita Medical (RCEL), StoneCo (STNE)
Tuesday: Home Depot (HD), International Game Technology (IGT), Jack In The Box (JACK), On Holding Ag (ONON), Nextracker (NXT)
Wednesday: Dynatrace (DT), Monday.Com (MNDY), Copart (CPRT), Cisco (CSCO)
Thursday: Deere (DE), Walmart (WMT), Applied Materials (AMAT), Doximity (DOCS), Ross Stores (ROST), Take-Two Interactive Software (TTWO)
Friday: RBC Bearings (RBC), H World Group (HTHT)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Lessons from the VIX

On Friday, when the Cboe Volatility Index (VIX) closed at its lowest level since January 23, it also posted its eighth-straight down day—something it’s done only 10 other times since 1990.2

While such a small number of events makes it difficult to draw solid conclusions about the market’s behavior, the following table shows the SPX’s returns two, five, and 10 trading days later:

S&P 500 average returns after eight-straight VIX down days, 1990-2023

Data source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest directly in an index.)

While the SPX was lower half the cases after two days, in all but one instance (October 2009) the SPX was higher 10 days later, with median return of 2%—well above the 0.4% average return for all 10-day periods since 1990.


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1 Reflects S&P 500 (SPX) daily closing prices, 1957-2024. Supporting document available upon request.
2 Reflects S&P 500 (SPX) and Cboe Volatility Index (VIX) daily closing prices, 1990-2024. Supporting document available upon request.

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