5-20-24-NVDA

Chart: NVDA 1-year daily

Nvidia (NVDA) is on everyone’s mind this week, as they are scheduled to report earnings on Wednesday. The stock has sold off just a bit, which could be a good thing if they blow past expectations. (NVDA) is hitting resistance, but a breakout could be very strong. Nvidia has had an amazing run, but there is no reason it can’t double again.

5-20-24-SPX

Chart: SPX 1-year daily

The S&P 500 has broken out above its 5/1 high and should pull back just a bit, but again, all pullbacks should be considered buyable at this point. We see the market moving higher throughout the year and we think it could surprise everyone with just how much strength it has – possibly even pushing up to the 5600-5700 level. The old trader’s saying is “sell in May and go away”, but that does not look like the case this year. Maybe we will have to update the saying to “buy in May and stay”.

5-20-24-TLT

Chart: TLT 1-month daily

The bond market has moved up as TLT, the 20-year treasury ETF, is moving higher and interest rates are moving lower organically.

The Conference Board’s Leading Economic Index (LEI) fell 0.6% in April, the most in six months, and double the consensus estimate of -0.3%. Half of the LEI’s ten components made negative contributions, led by worsening consumer expectations of business conditions, falling manufacturing new orders, and declining building permits.

The six-month annualized rate of change of the LEI, however, improved last month to -3.9%, the slowest pace of decline since May 2022. Although still negative, this rate of change has moved closer to the zone that historically has meant sustained economic growth.