The three major indexes closed the week higher despite Friday’s better-than-expected employment report. The Dow Jones Industrial Average rose 0.7%, the S&P 500 rose 1.5%, and the Nasdaq Composite rose 2.5%. The Labor Department reported that nonfarm payrolls rose 272,000 in May, beating the 190,000 expected by the Dow and the 175,000 gain in April. Wall Street had been hoping for a lower figure on hopes that the Federal Reserve might start cutting interest rates this year. Wages also remain weak, with average hourly earnings up 0.4% from the previous month. Outside the labor market, the ISM Manufacturing Index for May, released on Monday, was weaker than expected (48.7 vs. 49.5 expected), while April factory orders were slightly better than expected (0.7% vs. 0.65% expected). The ISM Services Index for May on Wednesday was very positive (53.8 vs. 51). Technology led the gains across all sectors, followed by Healthcare and Communication Services. Utilities led the declines, followed by Energy and Materials. Earnings season is almost over, with 99% of S&P 500 companies reporting earnings. 79% reported positive earnings surprises and 61% reported positive sales surprises, according to data compiled by FactSet. No portfolio stocks reported this week, but one final stock will be announced next week. Other stocks to watch include: 1. Consumer Prices: On the economic side, next week will be focused on inflation and the Federal Reserve’s continued efforts to tame it. The Consumer Price Index for May will be released on Wednesday, providing another look at the inflation rate. One key data point is the housing index. As we’ve noted before, housing costs account for about a third of the headline, and even more so at the core level. It’s an unavoidable cost for most Americans, and it remains high. As of Friday, economists are expecting a 3.4% year-over-year increase at the headline level and a 3.5% year-over-year increase at the core level, according to FactSet. 2. Federal Reserve Interest Rate Decision: The June FOMC meeting will also be held on Wednesday, with the central bank announcing its decision on interest rates at 2 p.m. As per usual, Fed Chairman Jerome Powell will hold a press conference shortly thereafter. As of Friday, the market is pricing in the possibility that the FOMC will keep interest rates unchanged, rising to 99.5% from 97.7% after Friday morning’s employment report, according to the CME FedWatch tool. 3. Producer Prices: The producer price update will be released the day after the CPI report. The PPI report will not have much impact on the Fed’s strategy. The Fed is more interested in what consumers pay than what companies pay. These input costs are ultimately reflected in prices. Any significant price increases may force companies to raise prices in the future to protect their profit margins.As of Friday, economists were expecting a 2.5% annual increase in both headline and core, according to FactSet. 4. Latest Quarter Club Stock Report: Broadcom reports after the close on Wednesday. Expect continued momentum in AI networking and signs of change in the legacy semiconductor part of the business. In software, expect management to show progress on its integration with VMWare and in conversations with customers. Wall Street has praised the chipmaker this week. 5. Apple’s Worldwide Developers Conference: The biggest expectation from this closely watched annual event, and what Apple needs at least to maintain its recent gains, is an update that brings more generative AI capabilities to the iPhone. This would include an enhanced version of Siri and more features for first-party apps. If Apple impresses with its implementation of generative AI, the stock could rise over time on the view that the company is giving users a bigger reason than ever to upgrade their devices. Monday, June 10th – No Event Tuesday, June 11th – Before the Bell: Academy Sports and Outdoors (ASO) After the Bell: GameStop (GME), Oracle (ORCL), Casey’s General Stores (CASY) Wednesday, June 12th – 8:30 AM ET: Consumer Price Index 2:00 PM ET: FOMC Meeting After the Bell: Broadcom (AVGO), Dave & Buster’s Entertainment (PLAY), Oxford Industries (OXM) Thursday, June 13th – 8:30 AM ET: Initial Jobless Claims 8:30 AM ET: Producer Price Index Before the Bell: Signet Jewelers (SIG), Korn Ferry International (KFY) After the Bell: Adobe (ADBE), RH (RH), Amo (POWW) Friday, June 14 No Events (For a complete list of Jim Cramer Charitable Trust stocks, click here.) As a subscriber to Jim Cramer’s CNBC Investment Club, you understand that Jim will receive trade alerts before making any trades. Jim will wait 45 minutes after sending a trade alert before buying or selling shares in the Charitable Trust’s portfolio. If Jim talks about a stock on CNBC TV, he will wait 72 hours after issuing a trade alert before executing the trade. The above Investment Club information is subject to our Terms of Use and Privacy Policy, as well as Disclaimer. Receipt of any information provided in connection with the Investment Club does not create any fiduciary duty or liability. No specific results or benefits are guaranteed.
Apple CEO Tim Cook attended the Apple Worldwide Developers Conference in Cupertino, California on June 5, 2023.
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