My Weekly Stock Debrief (May 31 - June 3)
Dear subscribers,
Welcome to My Weekly Stock’s debrief for week #22 of 2022 (May 31 - June 3), our weekly newsletter reviewing the stock market performance.
Subscribe to receive this newsletter directly into your mailbox every week:
1. Market Performance
The equity markets were down for the week, with the SP500 losing 1.2%, the Dow Jones 0.9%, and the NASDAQ 1.0%. The index started the short-trading week well but did not manage to hold its gains and finished with a sell-off on Friday. A better-than-expected job report has upped the expectations of a faster-tightening cycle by the FED. The 10-Year rate increased significantly and closed at 2.94%, almost 20-basis points higher than the previous week.
The SP500 faces significant resistance ahead, notably the 50-day moving average. We have another critical inflation data coming next Friday, with the CPI report for May. Investors will look for confirmation that inflation has finally peaked, and this would definitively be a positive catalyst for the market.
2. SP500 Sector Performance
2 out of 11 SP500 sectors closed the week higher. Energy and Industrials led this week, with the former up 1.1%. Real Estate and Health Care lagged and declined 3.1% and 2.2%, respectively.
Only 2 sectors are positive year-to-date. Energy remains the indisputable winner of 2022 with a 61% gain. Communication Services and Consumer Cyclical are the worst performers in 2022, and down more than 20%.
3. SP500 Top / Bottom Stock Performers
Salesforce (CRM) was the best performer of the SP500 this week. The stock rallied 14% after releasing better-than-expected quarterly results and providing upbeat guidance.
Meanwhile, healthcare stocks continued to underperform for the 2nd week in a row.
4. SP500 Breadth
Momentum and breadth remain poor for the SP500. Only one-third of the index components are trading above their respective 200 and 50-day moving averages.
5. SP500 Daily Chart
Technical indicators are mixed, with the SP500 trading above its 20-day moving average but below the 50 and 200-day. RSI has a neutral reading at 50.
The index seems to have found support around the 4,000 mark but is likely to face resistance short-term at the 50-day moving average, around 4,250.
6. Market Sentiment
Fear & Greed Index
CNN's Fear & Greed Index tracks seven sentiment indicators and is published daily.
On Friday, the indicator closed at the “Fear” level (27), a 6-point improvement vs. the previous week. The VIX closed at 25, which implies a high level of uncertainty in the markets.
AAII Investor Sentiment Survey
The American Association of Individual Investors surveys each week its members on the direction of the stock market for the next six months. The results are published weekly on Wednesdays.
The last AAII survey reported that 37% of the respondents had a bearish market outlook, significantly improving from the previous week and getting closer to the historical average.
7. Our Earnings Chart of the Week
Five Below (FIVE) is reporting earnings next week. The 1-day stock performance post-earnings were positive in 7 of the past 12 quarters, for a daily return of 1.5% and an average move of +/- 6% on the day of earnings.
8. Our Favorite Analysis of the Week
Ryan Detrick has often reminded us that mid-term years usually mean poor returns for stocks, and actually, June is the worst month in those years.
9. The Week Ahead
Next week, earnings releases are expected from more Tech and consumer stocks, with DocuSign (DOCU), Campbells (CPB) and Five Below (FIVE) reporting quarterly results.
https://www.financegreater.com/earnings-calendar
Key economic reports for the week ahead will give us more insights into inflation. Notably, the Consumer Price Index report for May is released on Friday.
10. My Weekly Stock Pick
This week, our stock pick was Merck (MRK), and the stock closed down 1.3% (Monday open to Friday close). In 2022, My Weekly Stock’s picks are up 25% cumulatively (no leverage, buy and hold five days), and our options trading is up 157%.
Access our performance tracking here.
We will trade a stock in the Technology sector for the week ahead. Our stock pick will be released later on Sunday, and in the meantime, you can learn more about our trading approach in the article below:
Read more about our trading approach here.
And remember to subscribe to My Weekly Stock to receive our stock picks, trading plan, and buy/sell alerts directly in your mailbox.
That’s all for My Weekly Stock’s debrief for week #22 of 2022 (May 31 -June 3).
If you enjoy reading our newsletter, please share it via the link below:
You can also follow us on Twitter where we post many more charts during the week.
Have a lovely trading week,
My Weekly Stock
Disclaimer
My Weekly Stock shares information and content on our websites, social networks, or newsletters only for educational purposes. The information contained in our publications has been prepared based on publicly available information and proprietary research. The author does not guarantee the correctness, accuracy, or completeness of the information provided.
All information provided by My Weekly Stock or its affiliates is impersonal and not tailored to your needs, your investment objectives, or your financial situation. Nothing contained in the report shall constitute financial advice or an investment recommendation.
You are solely responsible for your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, or financial advisor. If you choose to invest, with or without seeking advice, then any consequences resulting from your investments are your sole responsibility. We are neither liable nor responsible for any profits or losses arising from any investment decision you have taken or made based on information we provide on our websites, social networks, or newsletters.
By using this site, newsletter, or any information provided herein, you indicate your consent and agreement to the terms of this disclaimer.