US indexes finish May on a high note: Market Domination Overtime

The Dow Jones Industrial Average (^DJI) ended the last trading day of May by closing 575 points intraday. In the shortened trading week, the S&P 500 (^GSPC) fell by 0.51%, while the Nasdaq Composite (^IXIC) fell 1.10% in the last four days. Donald Trump's guilty verdict has spurred debate about its impact on the upcoming presidential election and the broader market. With April's PCE (Personal Consumption Expenditures) inflation data landing within expectations, conversations returns to higher-for-longer interest rates.

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Video transcript

There is the closing bell on Wall Street and now it's market domination over time.

We are joined by Jared.

Great to get you up to speed on the action from today's session.

Let's start with where the major averages ended up and up being the operative word because we got a big old up draft here at the end of the session for the dow in particular, finishing higher by 583 points.

That's good for game of about 1.4%.

And I know Jared's going to go through the monthly numbers.

But if you look at the week here, still down on week by about a percent for the dow, the S and P 500 also a little bit of a pop up here at the end of the day.

It actually was negative for much of the session, finishing higher by 8/10 of 1%.

And actually, I should be looking at the four day, not the five day shouldn't I?

Because this is a short week still the S and P 500 down about a half percent on the week, the NASDAQ on the week down more about a percent on the day.

It too had a surge at the end, but not enough, very, very close, but enough to bring it into the green on the day.

Jared, as I noted earlier we had, well, the 10 years on there somewhere, the 10 year yield.

Oh, my aim was good.

4.5%.

4.51% on the day here, Jared.

Yeah, it was really interesting.

We saw this late day Hockey Stick rally and let's go back to the Wi Fi Interactive and I'll chart some of that for us.

There's today, I'm going to pull up the month to date and it wasn't the greatest month for the Dow.

And in fact, the Dow peaked mid month sold off pretty heavily over the last 10 sessions or so.

Uh but you take a look at the NASDAQ very different story for the month of May 6.88%.

So this is the best May for the NASDAQ composite since the year 2003.

So uh pretty impressive to see that uh kind of rabbit got pulled out of the hat at the very end of the day there because we're about to miss that S and P 500 somewhere in the middle up about 5%.

Um And when you take a look inside the price action, what went on within the indices and within the sector is really fascinating to see how things changed over the month.

So here we have, this is just today energy in the forefront of 2.5%.

Let me show you month today, we had 22 days in this month and utilities was the number one sector we've seen that becoming the new A I trade.

And guess what tech not to be left out is number two at 7.1%.

Then you have communication services.

So that's meta and alphabet and then you have real estate, all of those outperforming.

But it happened over the last seven sessions at the S and P 500 peaked and then sold off a bit.

Uh only communication services in the green.

And we saw tech take a massive hit, led to the downside by software.

So let me show you what happened in software over the last seven days and that looks pretty bad.

But when you take a look at the month overall, uh not bad at all.

In fact, you can see uh a little more red than green, but you do have some big winners there.

If I show you the same thing in semiconductors, you have overwhelming green here and that's led by NVIDIA.

NVIDIA couldn't save the, couldn't save the S and P 500 from a red close that one day.

But it's definitely been doing a lot of the leg work here when you take a look at unprofitable tech for the month.

That was, that took quite a bat there.

Some exceptions.

You have exchanges doing well.

So Robin Hood, excuse me, United Exchanges, brokers doing well.

So Robin Hood up there and then Coinbase, which is both an exchange and a broker did well as well.

You see beam therapeutics kind of in the middle up 12%.

Uh We also saw meme stocks take off at the beginning to the middle of the month and let's just see what they did, how they rounded out looks like gamestop ended up May up 100% cost right there with it up over 100%.

And let's see if I can find a MC, not seeing a MC.

Here we go 48.5% for the month of May and then still down 28% for the year.

All right.

Thank you, Jared Stocks closing the day mix following the conviction of former president Donald Trump.

And while it may take some time to see the reactions in the polls and the markets, the chart shows the S and P 500 has been rising right alongside Trump's chances of winning for more on this.

Let's welcome in Adam Turnquist LP L Financial Chief Technical strategist, Adam.

It is good to see you.

So you brought us a chart today, Adam, we appreciate it.

We like charts and basically we're looking at the relationship between the market and Biden and Trump.

Election odds.

Tell us what, what the charts tells us.

Adam what does it suggest?

Happy Friday.

Thanks for having me.

And it's been an interesting chart to watch because when you look at the predicted.org odds between President Trump and or former President Trump and President Biden, they've been shifting over the last few months and what we've noticed in terms of how the market has correlated to those, it's become increasingly correlated to president, former President Trump's election odds as the markets moved higher, his odds have also moved higher.

So that correlation has strengthened in con in contrast to that, you've seen President Biden's odds remain pretty much negatively correlated to the market over the last few months.

And where that shift really took place is when former President Trump's odds actually started to eclipse President Biden's odds.

And again, this is based on predict it.org um odds that we looked at and ran that correlation analysis.

So pretty interesting story.

I think the one liner is that the market is warming up to the idea of uh of the Trump victory this fall.

Is it or I feel like it's almost a chicken and egg situation, Adam, is it that the market is warming up to it or that when these things happen in the market that then causes changes in the election odds?

It's a good question.

And I think you have to caveat all of this with correlation does not imply causation.

So the chicken and the egg argument is very valid.

Perhaps there's just an overlap.

One thing we know the market doesn't like uncertainty.

We saw that in the beginning of the session today with what happened with the conviction.

Um, with President Trump, there's going to be a lot of uncertainty, I think until we get through the sentencing in July 11th, perhaps acting as a little bit of an overhang.

But for today, you can see the market shrugging that off and it looks like another, um pretty solid close into the weekend here for the S and P 500.

You know, Adam le let's set aside politics, put back on your, your technicians hat.

Um You know, I'm just interested to get your take on the SPX and, and where we do head from here, Adam and kind of the near intermediate term because you point out, um you know, may kind of um unseasonably strong.

So what do you think June is bringing us?

It was a great May for the S and P. It's not a seasonably strong month.

We're closing up here.

I didn't check the last stats but call it around 4%.

That's a really good May for the S and P 500.

However, those seasonal trends don't tend to carry into.

June.

June is on average up 10.1% for the S and P 500.

Even with a strong May, you don't tend to get a, a positive or a, a much of a positive.

June could be some of those summer doldrums that we talk about.

But if you look at just overall, those Memorial Day to Labor Day type of returns on average, going back over the last 50 years, average for the S AND P that is, you're up 1.8% more recently.

I think the last 10 years are up about 3.8%.

So maybe a little bit better returns more recently as we go into the fall.

Um Adam, I've been noticing over the past last couple of weeks and really over the past week specifically, we've seen uh large cap tech sort of lagging here.

We've seen breath sort of breaking down.

That's something we've been talking a lot about.

What does that imply about the sustainability of a rally as well.

I do you think that we'll continue to see sort of lagging performance from large cap tech?

And then what does that do to the rest of the market's performance tech has actually had a pretty good comeback in terms of relative performance.

But to your point that that leadership has been very narrow, I think NVIDIA contributed to around a third of the S and P five hundred's gains this year and this month.

So what we've witnessed in the context of this bull market is the generals lead and the soldiers follow meaning narrow leadership at these important inflection points and, and the rest of the, the market tends to catch up as the rotational pressures move into more cyclical sectors that's gonna be key for the market this summer.

Are we gonna see a broad new this market?

Are we gonna see new 52 week high beyond just the tech space, Adam, I'm glad you mentioned NVIDIA because we have a rule on the show.

You have to say it at least once.

Um I thought just to get your take there on what the charges are saying because I thought I read recently Adam that you were making the case that you know, NVIDIA, uh the kind of the the recent breakout suggest maybe our performance could continue.

Yeah, we don't cover the stock.

So it's not a formal recommendation.

But if you just look at the technical observations of NVIDIA and the breakout from what we call a bullish flag formation, not to get too technical on a Friday afternoon.

But you measure that out.

You can get an upside price objective around 1350 video.

Of course, that's not our recommendation or a call, but that's what the technicals are telling us and look for further out performance even on a valuation basis.

When you look at it versus semiconductors, it's actually trading cheap on a longer term basis and even to the market, it's pretty much in line just looking at for pe multiples.

Adam.

Thanks a lot for your analysis.

Helpful stuff.

Appreciate it.

Have a great weekend.

You too, thanks.

Well, stocks are wrapping up the last trading day in May with the dow jumping nearly 600 points, the major indices finishing off a winning month and Yahoo Finances is Josh Shafer here with more on the market takeaway.

So we've been looking at the month as we were just talking about, the tech trade had to come back and then sort of pause when I wrote my takeaways today, I wrote them about two hours ago when I was thinking about the NASDAQ was down more than 1%.

What happened?

It was still the weak link on the day to be fair.

It was, it was, and the tech trade had cooled off a little bit to end May.

Right.

So at one point, we were pacing for the Best May in the NASDAQ since 2005, I think we might have just got it, but it had been sort of teetering over the last week.

And that was really awesome.

Different earnings releases that we saw over the past week.

You had sales force come out.

They didn't get a positive reaction to earnings.

You didn't have Dell get a positive reaction to earnings.

Mongo DB is a company that's had an A it, I'm sort of referencing a bunch of companies that have had A I ties here and investors just weren't overly satisfied with what these companies had to say.

And I thought, uh city strategist Scott Kroner had a good point on this essentially just saying in this environment that we're in right now with prices so high, your near record highs, the beaten raise environment just continues to be a trend in earnings.

If you're not beating and raising and raising by how much the street thinks you're gonna raise by.

Right?

You're just seeing stocks get pressured.

And then I think you guys were just talking about sort of one of our other points here is breath.

If these stocks come under pressure, are you gonna get more breath or no?

Because if you don't get more breath, then obviously, that's when we probably have a little bit of a pullback.

Right?

Well, talk to us more about breath because we've been talking about that a lot this week.

You've been looking at very like we've, you and I have seen a lot of charts about a lot of charts about bad breath.

Julie.

Hopefully we both have good breath, but we're looking at a chart about bad breath here, right?

A little pun on a Friday.

So this is from Bank of America strategist Michael Hartnett.

And he, he's highlighting the difference between the S and P 500 market cap weighted, which is the normal S and P 500 that we talk about all the time.

And the S and P 500 equal weight, sort of how they're moving in connection with each other.

The S and P 500 equal weight has been one of the indexes we've been following over the last year, first signs of broadening because the equal weight index doesn't move because NVIDIA goes up.

Right.

It's equal weighted.

The North S and P 500 can be driven by big stocks moving higher.

So when we have been tracking, sort of the broadening, you go back to December last year, remember the soft landing euphoria trade we talked about and that broadening, the equal weight actually started outperforming the S and P 500.

At that point, you can go back to March.

The equal weight was doing well.

Now, over the last month, the S and P 500 was up about 4% equal weight, only up about 2% sort of showing us that we have lost the, the broadening trend that we have been talking about.

And I think when you spin that forward, it kind of makes sense based on how we're talking about fed policy right now.

And the overall trajectory of the way the rest of this year looks right, the broadening trade was supposed to come with a 1.6 rate cuts.

Now we're down to less than two.

So I think is we're pricing out rate cuts.

You have yields high.

Maybe the, the case for the broadening trade isn't as strong as it once was.

What about I need to get your take, uh P CE and whether that kind of did you see any kind of shifts?

And when people think cuts are coming.

So we, we had an inflation print today that came in in mind.

Right.

And it didn't seem like the market cared all that much.

I mean, I guess we ended up rallying at the end of the day a little bit.

But largely I think if you had the P CE print showing what it did, which was the slowest monthly increase of 2024 it reversed trend a little bit.

Right.

We had three months of bad prints and then you had this month kind of your key line here to look at is the purple line.

It's the three month annualized rate.

And so that in the first quarter was looking really bad.

It was ticking up and you can see it came down a little bit.

But I think a lot of it seemed like the reaction from economists was very similar to what we've been hearing from fed officials, which is OK, good job.

Ok. We need more confidence, more good data.

We need more data as J Powell said, right?

So maybe we'll get it.

I don't know next week, the week after we'll be waiting.

Who's to say Joshua?

Thank you coming up.

We're taking a look uh to next week and tell you everything you need to know to get ahead of the game.

Stay tuned, more market domination over time coming up.

This is a defining moment historically, it's also going to be the way that that President Trump continues to play this victim card.

A victim of the system.

There is a going to be a temporary drop in support here that can easily revert back home to Trump over the next 157 days.

Trump is in a situation now where he needs to unify the Republican Party.

He needs to get a majority of independents in order to win.

That's how he won in 2016.

It's very difficult for either campaign to speak over the impediments or the headwinds that they're facing.

This is a beginning of an unraveling of something I suspect is pretty terrible to come.

We're continuing to monitor the fallout from Donald Trump's conviction and joining us now to discuss what it all means and what comes next for the president.

Uh We wanna welcome in Jack o'donnell.

He is the former president and chief operating officer of Trump Plaza Hotel and Casino Jack.

It's good to have you on the show.

So, um, you're an interesting guy to talk to about this, Jack because he used to work for Trump.

So I'm interested just, just quickly here.

What did you make of the verdict, Jack?

What did you make of Trump's response?

Well, uh well, thanks for having me first of all off.

Um Well, I was shocked to be honest with you uh at the verdict not because um I thought that he was innocent.

It was just a matter of someone that worked for him closely I see how we operate.

I know how he operates.

Um, I was shocked that he finally caught up with him.

He begin to believe that it's never gonna, you know, be accountable for his actions.

So I, I was shocked to be honest.

Um, I, I wasn't overjoyed.

Um, you know, I, you know, I think that there's a real downside what, you know, um, but I think his reaction was Trump.

Um, you know, there was that moment in the court uh room after the verdict was read and he was leaving where said it was a human moment, so to speak when he reached out to grab his son's hand.

Um but he went right back to Donald Trump very quickly as the Donald Trump of revenge, Donald Trump of either.

Um And I think he saw that um almost immediately by the time he got, you know, back to the Trump Tower, he was, you know, he was ready to fight.

And I think even the comments that we today um indicate that he should have been on, on a crusade of revenge uh from this point forward and I don't think he'll take prisoners uh if he was elected again, Jack.

Um as we've been talking about, there is nothing that was sort of particularly revelatory about this trial and conviction, right?

Donald Trump is very much a known quantity at this point.

There are a few surprises left um when it comes to him So when we look how he's perceived in the country and what people are going to do, I mean, there was just a poll that just came out, um, a Reuters poll that found that one in 10 Republicans said they were less likely to vote for him with this verdict.

But the election is still a long way away.

So how should we be thinking about it in that context?

Well, I mean, look, I think you're right.

He, he, he really has earned the nickname Kron Don over the years for dodging, you know, legal consequence.

Um, but clearly, um, I don't believe that this, this conviction is going to have, um, a negative impact.

Uh, that, to me that the Trump supporter is not going away.

If anything, I think they're gonna become strongly supported financially and emotionally, not very emotional support that they give him.

Um, you know, as, as one of your other speakers said, you know, is he gonna be able to, um, you know, attract independent voters, undecided voters?

And that, and that's a big question and I think if you're a Biden supporter, you know, you're hoping that you can't, I think he has already unified the Republican party, but I don't see any, any weakness.

There, there's gonna be a character here and there, you know, a senator here and there that might say, you know, how can we elect to be?

Um, but I don't think the support from the Republican party is gonna waiver at all between now and November Jack.

Thank you so much for taking the time to join the show and share your thoughts.

Appreciate it.

Thank you for having me time now for two watch.

Next week, we're to start off with the economy.

The monthly jobs report for May is coming out on Friday.

The economy is forecasting non farm payrolls increased by 15,000 compared to last month.

Unemployment rate expected to hold steady while hourly wages tick up slightly from April's report on the earnings will be getting a new batch of companies reporting including crowd strike, Campbell soup and docu sign crowd strike announcing first quarter results after the close on Tuesday.

And analysts expect the cyber security companies recent partnership with Aws will be a focus on the earnings call some other earnings on deck next week, Lulu Lemon Dollar Tree and Sun Power reporting among others dollar tree announcing first quarter earnings before the bell on Wednesday.

According to analysts, consumables could be the main source of growth in the first quarter.

The company is coming after we saw Dollar General, the rival discount store chain reports strong results for its fiscal first quarter yesterday.

But the company also warned that customers to be price sensitive that'll do for today's market domination.

Be sure to come back on Monday at 3 p.m. Eastern for all of your coverage leading up to an after the closing bell.

But don't go anywhere on the other side of break.

It's our new show asking for a trend.

I got you covered for the next half hour with the latest and greatest market moving stories so you can get ahead of the themes affecting your money.

No.