The stock market abruptly changed course after the Federal Reserve increased its inflation forecast and brought forward its timetable for raising interest rates. A flattening yield curve and falling commodity prices weighed heavily on value stocks, the leaders of the rally this year. Investors rotated into growth stocks buoyed by a decline in long-term bond yields.

The Federal Reserve surprised investors after the interest rate policymaking Federal Open Market Committee met on June 15 and 16. Fed officials indicated interest rates could go up as soon as 2023, more than a year earlier than their March forecast.

The Fed acknowledged the rapid economic recovery from the pandemic and raised its 2021 GDP growth forecast by 0.5% to 7.0%. The Fed also raised its 2021 inflation forecast by 1.0% to 3.4%. The FOMC left its benchmark short-term borrowing rate anchored near zero. The FOMC discussed tapering bond purchases; it, however, stopped short of providing a timetable.

St. Louis Federal Reserve President Bullard further unnerved investors two days after the FOMC meeting. Bullard said he thinks the Fed should lift its benchmark interest rate as early as late 2022. He also voiced his support for ending purchases of mortgage-backed securities.

Stocks swooned, and the dollar surged on Bullard’s comments. Value stocks such as financials and materials bore the brunt of the decline.

Financial stocks came under pressure as the yield curve flattened. Yields on longer duration 10- and 30-year bonds fell while yields on shorter duration 2- and 5-year notes rose.

The rise in the U.S. dollar and data from China weighed on commodities and materials stocks. Copper and gold declined 9% and 6%, respectively. China’s credit impulse, which measures the growth in new financing as a share of GDP, contracted sharply in May. Adding to pressure on commodities, Reuters reported China plans to release metal reserves to nip commodity price inflation.

Before the FOMC meeting, economic data pointed to rising inflation and moderating growth. Producer prices rose 6.6% for the 12 months ending in May, a record high for this data set. Retail sales fell by a larger-than-expected 1.3% in May while initial unemployment claims unexpectedly rose.

For the week ending June 18, the S&P 500 (SPY) fell 2.2%. Only one of the 11 sectors gained.

Leaders and laggards for the week ending June 18, 2021.

Information technology (XLK) bucked the broad decline with a 0.1% gain. Consumer discretionary (XLY), health care (XLV), and communication services (XLC) held up better than the S&P 500.

Materials (XLB), financials (XLF), and energy (XLE) lagged the benchmark losing more than 5.0% each.

Market breadth was negative. The number of advancing stocks in the S&P 500 lagged the number of decliners by a 2-to-11 ratio.

Health care and information technology companies collectively accounted for seven of the S&P 500’s top 10 winners. The winner list also included one member each from the industrials, consumer discretionary and financial sectors.

1. Information Technology

Enphase Energy (ENPH) +13% – The renewable energy technology company features here for a second straight week. Enphase shares rallied as part of the growth stock universe as long-term interest rates fell. They were the top performer in the S&P 500 for the week.
ServiceNow (NOW) +7% – The enterprise software company extended its rally from the week of June 7.
NVIDIA Corp. (NVDA) +5% – Bank of America and Jefferies raised their share price targets for the semiconductor chipmaker.
Adobe (ADBE) + 5% – The software company’s earnings report and outlook enthused traders building positions ahead of the event. Adobe raised its current quarter sales and EPS forecasts after beating analysts’ estimates for the second quarter by 3% and 8%, respectively.

2. Industrials

Generac Holdings (GNRC) +11% – The momentum in the power generation equipment maker continued from the week of June 7. California utility PG&E warned customers to expect more power outages this summer. Electricity grids in CA and TX felt the strain of the brutal heatwave.

3. Health Care

ResMed (RMD) +9% – The medical equipment maker bucked a downgrade from Bank of America after Dutch competitor Koninklijke Philips recalled ventilation devices, allowing ResMed to gain market share.
Abiomed (ABMD) +6% – Deutsche Bank initiated coverage of the medical device maker with a $360 a share price target, implying a 15% upside.
(DXCM) +5% – Piper Sandler retained DexCom as a top pick in diabetes Medicare’s qualification rule to cover continuous glucose monitoring devices eases after July 18.

4. Consumer Discretionary

Lennar (LEN) +6% – J. P. Morgan raised its share price target for Lennar by 23% to $141 a share after the homebuilder beat analysts’ quarterly sales and EPS forecasts and the dollar value of its backlog surged 56%.

4. Financial

MSCI Inc. (MSC) +5% – Oppenheimer upped its share price target for the global securities index publisher by $10 to $543 a share. Reuters reported MSCI is looking to launch indexes for cryptocurrency assets.

Top ETFs for the week

The following ETFs themes worked well: volatility, cloud computing, long-term treasuries, solar energy, and fintech. The top ETFs for the week include:

• iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) +13%
• WisdomTree Cloud Computing Fund (WCLD) +5%
• Vanguard Extended Duration Treasury Index Fund ETF Shares (EDV) +4%
• Invesco Solar ETF (TAN) +3%
• ARK Fintech Innovation ETF (ARKF) +3%

Top Fidelity Fund for the week

• Fidelity Select Disruptive Technology (FTEKX) +2.5%

Looking ahead to the week of June 21

Comments from the Fed on inflation and interest rates will dominate the market this week after the gyrations last week. Data on inflation and the housing market will also be in focus. Investors will look to gauge the economy from three high-profile earnings reports.

* The markets will receive plenty of inputs from Federal Reserve officials this week. On Tuesday, Chairman Powell speaks to the House Select Subcommittee about the coronavirus crisis policy response and the economy. This communication allows Powell to calm investors. Presidents of several Federal Reserve Districts will speak this week as well.

* The Commerce Department’s Bureau of Economic Analysis reports the personal consumption expenditures (PCE) inflation index for May on Friday. The PCE is the Fed’s preferred inflation measure.

* Housing data will also be of interest to investors. Last week, comments from the Federal Reserve caused the 30-year fixed mortgage rate to jump 0.23% to 3.26%, according to data from the Mortgage News Daily. Data on existing home sales and new home sales are due this week.

* In earnings news, investors will focus on reports from three bellwethers Accenture, FedEx, and Nike, to assess the health of IT services, manufacturing, and the consumer worldwide.
 

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The Labor Department reported consumer prices rose in May at their fastest rate in 13 years. Both stock and bond investors, however, shrugged off worries of rising inflation becoming a secular issue. They reasoned the rise in consumer prices resulting from the easing in COVID restrictions will prove transitory.

The major stock indexes were range-bound last week ahead of the much-anticipated consumer price index (CPI) data on Thursday. The Labor Department reported consumer prices rose in May at their fastest pace since 2008. The total CPI rose 5.0% from a year ago, up from 4.2% in April. The increase in the CPI exceeded the 4.7% forecasted by economists.

Economists attributed most of the increase in the consumer price index to the surge in commodity, airfare, and used car prices. Jitters of inflation starting a secular uptrend eased as investors believed that the impact of the pandemic on the above prices is likely to be temporary. They concluded the Federal Reserve could prove correct in expecting the rise in inflation to be transitory.

The Treasury bond market appeared to agree with the assessment of stock investors that the rise in inflation will be temporary. The yield on the 10-year Treasury bond slid below 1.43% to a three-month low.

Meanwhile, the size of the proposed infrastructure spending plan was shrinking in Washington. A bipartisan group of senators consisting of five Democrats and five Republicans pushed a $579 billion infrastructure plan forward to negotiate a deal. This bipartisan plan is substantially smaller than President Biden’s $2 trillion infrastructure spending proposal.

For the week ending June 11, the S&P 500 (SPY) rose 0.4%. Six of the 11 sectors gained.

Leaders and laggards for the week ending June 11, 2021.

Health care (XLV), real estate (XLRE), and information technology (XLK) gained over 1.4% to lead the S&P 500.

Financials (XLF), materials (XLB), and industrials (XLI) lagged the benchmark.

The number of advancing stocks in the S&P 500 roughly equaled the number of declining stocks.

Health care and information technology companies collectively accounted for eight of the S&P 500’s top 10 winners. The winner list also included one member each from the industrials and utility sectors.

1. Health Care

Biogen (BIIB) +39% – The biotechnology firm was the top performer in the S&P 500 for the week. The shares surged after the Food & Drug Administration (FDA) approved Biogen’s Alzheimer’s treatment, Aduhelm. The approval has, however, been controversial. Three members of the FDA’s expert panel resigned saying, the decision threatens the integrity of the review process.

Eli Lilly (LLY) +11% – The drug company’s shares rose on speculation that FDA’s decision to approve Aduhelm could improve approval prospects for Lilly’s donanemab to treat Alzheimer’s.

Illumina (ILMN) + 8% – The genomic tools provider gained after providing optimistic comments at a Goldman Sachs healthcare conference.

Catalent (CTLT) + 8% – The drug delivery company rose on the continuing possibility of AstraZeneca shifting its COVID vaccine production to Catalent.

2. Utilities

NRG Energy (NRG) +10% – The independent power producer rallied after announcing it would host an Investor Day this week on Thursday, June 17.

3. Information Technology

Enphase Energy (ENPH) +9% – The renewable energy technology company rose after Refinitiv/Verus upgraded from Sell to Hold.
ServiceNow (NOW) +8% – Goldman Sachs added the enterprise software company to its Conviction Buy list, citing the potential to accelerate growth in subscription revenue in 2022.
Adobe (ADBE) + 7% – Traders likely built positions in the software giant ahead of the company reporting earnings this week on Thursday, June 17.
Tyler Technologies (TYL) +7% – The IT service provider rose after boosting its fiscal 2021 sales and EPS guidance.

4. Industrials

Generac Holdings (GNRC) +7% – KeyBank upgraded the power generation equipment maker and affirmed its $400 a share price target, citing bright prospects for Generac’s Home Standby business.

Top ETFs for the week

The following ETFs themes worked well: biotech & genomics, energy MLPs, Chinese clean tech, and cloud computing. The top ETFs for the week include:

• ARK Genomic Revolution ETF (ARKG) +8.3%
• First Trust NYSE Arca Biotechnology Index Fund (FBT) +7.7%
• InfraCap MLP ETF (AMZA) +7.3%
• KraneShares MSCI China Clean Technology ETF (KGRN) +6.7%
• WisdomTree Cloud Computing Fund (WCLD) +6.5%

Top Fidelity Fund for the week

• Fidelity Select Biotechnology (FBIOX) +7.2%

Looking ahead to the week of June 14

The Federal Open Market Committee’s June monetary policy meeting is the big event for markets this week. Economists expect the FOMC to leave interest rates changed. Market participants are watching for clues on the central bank’s timetable for tapering bond purchases.

* The Federal Open Market Committee meets on June 15-16 to determine interest rate policy. Stocks are likely to be range-bound before the completion of this event. Economists see the FOMC leaving monthly bond purchase amounts and interest rates unchanged. Wall Street’s attention is on the FOMC’s statement after the meeting. Market participants will look for changes the central bank makes to its interest rate and inflation forecasts. They will also focus on details policymakers share on the thought process and timetable for tapering monthly bond purchases.

* Although the earnings calendar is relatively light, the companies reporting will garner attention. The reporting companies include Adobe and Oracle from the software group, home builder Lennar, and contract manufacturer Jabil.

* In economic data, May retail sales and producer prices are due. According to Briefing.com, economists expect retail sales to fall 0.6% in May from April. They expect producer prices to increase 0.5% in May from April.

* Investors will also be watching the news from President Biden’s meetings with NATO allies at the G-7 summit. Biden also meets Russian President Putin one-on-one on Wednesday in Geneva, after which Biden will hold a solo press conference.
 

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U. S. economic data comforted investors. The ISM’s factory and services activity measures showed the economy gaining traction. Job creation in May was neither too strong nor too weak. Investors believed the May jobs support would support the Fed in prolonging the near-zero interest rate policy.

The Labor Department reported the U. S. economy created 559,000 jobs in May. The tally fell short of the Wall Street consensus estimate for a gain of 671,000, based on a poll of economists by Dow Jones and The Wall Street Journal. The unemployment rate declined to 5.8% from 6.1% in April.

Perceiving job creation to be neither too weak nor too hot, investors surmised the report would encourage the Federal Reserve to keep its near-zero interest rate policy longer.

In other economic data, the Institute for Supply Management (ISM) reported that its services activity index rose to an all-time high of 64.0 in May. The ISM’s manufacturing activity index increased to 61.2.

Pent-up demand in a reopening economy boosted the backlog of orders measure in both the services and manufacturing activity indexes. Bottlenecks in the supply chain compelled both manufacturers and service providers to pay more for inputs.

President Biden signaled his willingness to make concessions to Republicans on corporate taxes to forge a deal on infrastructure spending. Giving a boost to reopening plays, the Centers for Disease Control and Prevention said more than half of the adults in the U. S. have received both COVID vaccine doses.

For the week ending June 04, the S&P 500 (SPY) rose 0.8%. Nine of the 11 sectors gained.

Leaders and laggards for the week ending June 04, 2021.

Energy (XLE), real estate (XLRE), and information technology (XLK) gained over 1.5% to lead the S&P 500.

Consumer discretionary (XLY), health care (XLV), and communication services (XLC) lagged the benchmark.

Market breadth was positive. The number of advancing stocks in the S&P 500 beat the number of decliners by a 16-to-9 ratio.

Eight of the S&P 500’s top 10 winners were energy sector members. The winner list also included one member each from the information technology and consumer discretionary sectors.

1. Energy

The Organization of the Petroleum Exporting Countries and their allies (a group known as OPEC+) raised its oil demand forecast. The group also agreed to increase output by 450,000 barrels a day, starting July, as previously planned. Saudi Arabia planned to roll back part of the 1 million barrels per day production it voluntarily cut. Oil gained 5% for the week on the restraint shown by OPEC+ in increasing production in the face of surging demand. Shares of oil & gas producers and energy services companies took their cue from oil.

Devon Energy (DVN) +19% – The oil & gas producer was the top performer in the S&P 500 for the week. Its shares surged after Raymond James upgraded them to ‘Strong Buy’ and raised the price target by 17% to $40 a share. Raymond James based the upgrade on opportunities for productivity gains in Devon Energy’s Delaware wells.

Oil & gas producers Marathon Oil (MRO), APA Corp. (APA), Pioneer Natural Resources (PXD), and Occidental Petroleum (OXY) also featured among the top 10 winners list after gaining 12-14% each.

Schlumberger (SLB) +16% and Halliburton (HAL) +10% – Schlumberger’s provided an upbeat assessment of the future of the energy services industry. Schlumberger also raised its full-year revenue and operating margin forecasts.

2. Information Technology

NVIDIA Corp. (NVDA) +8% – The semiconductor chip maker features in this column for a second straight week. NVIDIA unveiled its latest gaming processors and initiatives to broaden the availability of its artificial intelligence technology. NVIDIA’s CEO said he is confident regulators will approve his company’s $40 billion acquisition of ARM Ltd. from SoftBank Group.

3. Consumer Discretionary

eBay Inc. (EBAY) +10% – The peer-to-peer marketplace operator gained after the regulator in the U. K. approved eBay sale of its classified advertisements business to Norway-based Adevinta for $9 billion. The approval keeps the transaction on track to close in the second quarter.

Top ETFs for the week

The following ETFs themes worked well: energy groups such as energy services, natural gas, and oil & gas producers, reopening plays, and Brazil. The top ETFs for the week include:

• VanEck Vectors Oil Services ETF (OIH) +14.9%
• Invesco Dynamic Leisure and Entertainment ETF (PEJ) +11.6%
• First Trust Natural Gas ETF (FCG) +9.5%
• SPDR S&P Oil & Gas Exploration & Production ETF (XOP) +8.3%
• iShares MSCI Brazil ETF (EWZ) +7.1%

Top Fidelity Fund for the week

• Fidelity Select Energy Service (FSESX) +14.1%

Looking ahead to the week of June 7

With the earnings reporting season relatively quiet, investors will focus on economic data ahead of the upcoming Fed meeting on June 15-16. Consumer price data will be in the spotlight this week.

* Bureau of Labor Statistics reports the consumer price index for May on Thursday. Economists surveyed by Dow Jones expect core inflation to rise 0.4% for the month and 3.4% year-over-year. The headline CPI is forecasted to show a year-over-year increase of 4.7%, up from 4.2% in April.

* The U. S. financial markets will have their first opportunity to react to the seven developed countries agreeing to a 15% minimum global tax rate. The finance ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States (G-7) met in England last Saturday. They agreed to enact a floor on the taxes paid by corporations worldwide. This international tax agreement strengthens the White House’s position on lifting domestic corporate tax rates without pushing multinationals abroad. President Biden will attend the G-7 leaders meeting in England on Friday.

* Consumer staples companies Brown-Forman and Campbell Soup are among the S&P 500 member reporting earnings this week. Popular meme name GameStop reports as well.
 

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The S&P 500 broke its string of back-to-back weekly losses as cryptocurrencies stabilized and pressure from the pandemic eased further. Investors were unfazed by the larger-than-expected increase in inflation after many Fed officials assured the uptick would be transitory. Re-opening trades and growth stocks fared well during the past week.

Pressure on stock prices from crashing cryptocurrencies eased last week as cryptos stabilized. Bitcoin closed the week at $34,300 after trading below $32,000 early last week.

The pressure from the pandemic continued to ease in the U. S., giving re-opening trades a boost. The success of immunization programs pushed the seven-day average of daily new COVID cases below 25,000.

The core personal consumption expenditures (PCE) index rose 3.1% year-over-year in April. The increase in inflation topped the Federal Reserve’s 2.0% target and exceeded economists’ forecast. It also marked the fastest rise in the core PCE since 1992. Yet, the inflation data did not bother investors.

Many Federal Reserve officials consistently assured investors that the central bank views the rise in inflation as transitory. They assured investors the central bank has the tools to clamp down if inflation begins to run too hot. They also edged closer to starting the discussion on scaling back bond purchases.

Senate Republicans unveiled a $928 billion infrastructure proposal to counter President Biden’s $1.7 trillion plan. Investors saw the Senate proposal as a precursor to a smaller infrastructure bill.

The assurances from Fed officials and the likelihood of a smaller infrastructure bill helped the yield on the 10-year Treasury bond trend lower last week, boosting growth stocks.

For the week ending May 28, the S&P 500 (SPY) rose 1.2%. Eight of the 11 sectors gained.
 

Leaders and laggards for the week ending May 28, 2021.

Consumer discretionary (XLY), communication services (XLC), and real estate (XLRE) gained over 2.0% to lead the S&P 500.

Utilities (XLU), health care (XLV), and consumer staples (XLP) lagged the benchmark.

Market breadth was strong. The number of advancing stocks in the S&P 500 beat the number of decliners by a 7-to-3 ratio.

Seven of the S&P 500’s top 10 winners were consumer discretionary sector members. The winner list also included companies from the healthcare, industrial, and information technology sectors.

1. Consumer Discretionary

Cruise and casino operators battered by the pandemic surged as the average daily number of new COVID cases declined and the percentage of U. S. adults receiving at least one dose of the vaccine approached 50%.

Royal Caribbean (RCL) +13% – The cruise operator was the top performer in the S&P 500 for the week. The company received approval to begin test cruises with volunteer passengers. Competitors Norwegian (NCLH) and Carnival (CCL) rose 11% and 9%, respectively. Casino operator MGM Resorts International (MGM) gained 8%.

Ulta Beauty (ULTA) +9% – The beauty products retailer rallied after posting first-quarter sales and EPS above analysts’ forecasts. Ulta also raised its fiscal 2021 sales guidance.

L Brands (L) +8% – The retailer moved one step closer to spinning off its Victoria’s Secret business in August. It appointed Chief Financial Officers for its standalone Bath & Body Works and Victoria’s Secret businesses.

Ford Motor (F) +9% – The automaker features in this column for a second straight week after unveiling its ambition is to lead the electric car revolution. Ford’s goal is to make 40% of its global volume “all-electric” by 2030.

2. Information Technology

NVIDIA Corp. (NVDA) +8% – The semiconductor chip maker surged in a delayed reaction to its beat-and-raise quarter as investors took a more optimistic view of its expansion potential after bullish comments from analysts.

3. Health Care

DexCom (DXCM) +8% – Positive comments from Barclays and Wells Fargo boosted shares of the glucose monitoring products manufacturer.

4. Industrials

TransDigm Group (TDG) +8% – Aircraft maker Airbus disclosed robust production plans that sparked a broad rally in aerospace stocks and lifted shares of this aerospace component maker.

Top ETFs for the week

The following ETFs themes worked well: cannabis, leisure, blockchain, rare earths, and lithium. The top ETFs for the week include:

• Global X Cannabis ETF (POTX) +15.5%
• Invesco Dynamic Leisure and Entertainment ETF (PEJ) +7.6%
• Amplify Transformational Data Sharing ETF (BLOK) +7.5%
• VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) +7.1%
• Global X Lithium & Battery Tech ETF (LIT) +6.7%

Top Fidelity Fund for the week

• Fidelity Select Semiconductors (FSELX) +5.2%

Looking ahead to the week of May 31

U. S. financial markets are closed on Monday in observance of the Memorial Day holiday. Investors will focus on economic data and the Fed during this shortened trading week.

* The week kicks off on Tuesday with the Institute of Supply Management’s reading on U. S. manufacturing activity in May. The ISM also reports its services sector index on Thursday.

* The May employment report is the big event of the week. Economists surveyed by Dow Jones, on average, expect the Labor Department to report the creation of about 674,000 jobs in May on Friday. In April, the economy added just 266,000 jobs, just one-quarter of what economists forecasted.

* The May jobs report is likely to be important from two perspectives. First, the data should help investors ascertain if the disappointing April jobs report was an aberration. Second, it is likely to strongly influence the Federal Reserve in shaping monetary policy in light of the surge in core personal consumption expenditures seen last Friday.

* Fed Chairman Powell speaks on Friday about central banks and climate change at the Green Swan 2021 global virtual conference.
 

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The S&P 500 dropped for a second straight week. Stocks were pressured by crashing bitcoin prices after China and the U. S. clamped down on cryptocurrency trading. The Fed’s minutes from its April meeting hinted at reconsidering asset purchases in the future. Economic data showed business activity picked up in the U. S. in May. Retailers lost ground after reporting stellar earnings.

A sharp drop in cryptocurrency prices impacted prices of risk assets, including stocks. Bitcoin plunged over 28% in the past week after China clamped down on bitcoin mining and trading. China moved to ban financial institutions from providing cryptocurrency services. The Treasury Department said it would require cryptocurrency transactions worth $10,000 or more to be reported to the Internal Revenue Service.

Minutes from the interest rate-setting Federal Open Market Committee meeting in April showed participants agreed the U. S. economy remained far from the Fed’s employment and inflation goals. Several participants suggested it may be appropriate to begin discussing a plan for adjusting the pace of asset purchases at some point.

In economic data, IHS Markit’s readings showed U. S. business activity picked up in May amid robust domestic demand. The flash U. S. composite index rose to a record 68.1 in May as both the services and manufacturing indexes set records. The number of Americans filing new unemployment benefits claims fell to 444,000, their lowest since March 14, 2020.

In earnings news, top retailers Home Depot and Walmart exceeded analysts’ EPS expectations by 25% and 40%, respectively. Quarterly same-store sales at Home Depot topped analysts’ estimates. Walmart raised its full-year earnings forecast. Yet, the Dow Jones U.S. Retail Index ended 1.0% lower for the week.

For the week ending May 21, the S&P 500 (SPY) fell 0.4%. Five of the 11 sectors gained.
 

Leaders and laggards for the week ending May 21, 2021.

Real estate (XLRE), health care (XLV), and utilities (XLU) ended above the flat-line to lead the S&P 500.

Energy (XLE), industrials (XLI), and materials (XLB) lost more than 1.5% to lag the benchmark.

Market breadth was weak. The number of declining stocks in the S&P 500 beat the number of advancers by a 2-to-1 ratio.

Information technology, consumer discretionary, and communication services companies collectively accounted for seven of the S&P 500’s top 10 winners.

1. Information Technology

Enphase Energy (ENPH) +19% – The energy technology company was the top performer in the S&P 500 for the week. Enphase led the broad advance in solar energy stocks after holding its annual meeting and authorizing a new $500 million share repurchase program.

Analog Devices (ADI) +7% – Benefiting from robust demand from the automotive, communication, and industrial sectors, the semiconductor chipmaker topped analysts’ quarterly sales and EPS forecasts. Analog Devices guided current quarter projections towards the higher end of its previous forecast. Bernstein upgraded its rating on Analog Devices from Market Perform to Outperform.

Maxim Integrated Products (MXIM) +6% – Deutsche Bank raised its share price target on the semiconductor chipmaker to $104 a share from $100 a share.

2. Consumer Discretionary

Ford Motor (F) +13% – The vehicle maker debuted its F-150 Lightning electric truck capable of traveling up to 300 miles per battery charge and received over 44,000 reservations from retail customers in less than 48 hours. Ford also announced plans to form a battery joint venture in the U. S. with Korean battery maker SK Innovation.

Target (TGT) +7% – The retailer topped analysts’ quarterly sales and EPS forecasts by 11% and 67%, respectively, as Americans spent their stimulus checks. Same-store sales rose 18%. Target also raised its current-quarter profit margin forecast.

3. Communication Services

Take-Two Interactive Software (TTWO) +10% – The video game software maker’s quarterly net income soared 78% year-over-year after revenues rose 10% from higher sales of virtual currency and add-on content. Total net bookings grew 8% year-over-year.

ViacomCBS (VIAC) +8% – Bank of America upped the odds of the media company becoming a takeover target after AT&T announced its plan to spin off its WarnerMedia business and combine it with Discovery. Bank of America raised its ViacomCBS share price target by 40% to $53 a share.

Top ETFs for the week

The following ETFs themes worked well: clean energy and precious metals. The top ETFs for the week include:

• Defiance Next Gen H2 ETF (HDRO) +9.5%
• Invesco Solar ETF (TAN) +8.2%
• ETFMG Prime Junior Silver Miners ETF (SILJ) +5.8%
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) +5.4%
• VanEck Vectors Junior Gold Miners ETF (GDXJ) +5.4%

Top Fidelity Fund for the week

• Fidelity Select Gold (FSAGX) +4.6%

Looking ahead to the week of May 24

The S&P 500 stayed above its 50-day moving average (DMA) in the past week. Cryptocurrencies, inflation data, and earnings reports may renew the pressure on stocks this week.

* The decline in cryptocurrencies weighed on all risk assets, including stocks, during the past week. Widely followed cryptocurrency Bitcoin broke below its 50-DMA and struggled to hold its 200-DMA. Bitcoin’s decisive break below its 200-DMA can bring additional downside in the cryptocurrency and pressure stocks. Meanwhile, the S&P 500 has itself survived the 50-DMA test, bouncing off this support level in two of the past seven trading sessions.

* Investors will get another perspective on inflation. On Friday, the Bureau of Economic Analysis reports the core personal consumption expenditure (PCE) index, the Federal Reserve’s preferred inflation measure. According to data from Briefing.com, economists expect the core PCE to rise 0.6% in April, compared to 0.3% in March.

* The first-quarter earnings reporting season is ending. Yet, the week includes reports from some high-profile companies such as Best Buy, Costco, Medtronic, NVIDIA, and salesforce.com.
 

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