35%
Albemarle (ALB): The lithium producer issued strong quarterly results and guidance. Management said robust demand supported prices and volumes. The company proceeded to raise its forecasts later in the month.
Big Movers in May 2022
29%
Devon Energy (DVN): The oil and gas producer beat earnings and revenue estimates as hydrocarbon prices soared. Management also increased its dividend and stock buyback program.
28%
NRG Energy (NRG): The Houston-based utility company’s earnings beat estimates as electricity and natural-gas prices rose. It also rebounded from severe weather conditions a year prior.
32%
Under Armour (UA): Supply-chain problems caused earnings and revenue to miss estimates. CEO Patrick Frisk subsequently announced plans to resign. Morgan Stanley downgraded the athletic-clothing company, saying a turnaround is less likely.
29%
Target (TGT): The big-box retailer lagged profit forecasts by a wide margin as costs swelled. The stock plunged 25 percent on 18 May. That was its biggest one-day drop since “Black Monday,” 19 October, 1987.
26%
Expedia (EXPE): The online-travel company tanked after hotel giant Hilton (HLT) issued weak guidance. It also struggled with a hawkish Federal Reserve and steep declines in the broader consumer-discretionary sector.
Key Economic Events Last Month
 | Hawkish Fed Plans More Rate Hikes | The Federal Reserve raised interest rates by 50 basis points and suggested similar moves are likely in June and July. Chairman Jerome Powell ruled out larger increases for now but said policymakers will get more aggressive if needed to curb inflation. (4/5) |
|---|---|---|
 | Housing at a crossroads? | U.S. employers added 428,000 jobs in April, beating forecasts by 37,000. Businesses that shrank during the pandemic, like hospitality and manufacturing, had the biggest gains. Wage growth slowed from 5.62% in March to 5.46% in April (6/5). |
| Potential signs of inflation easing? | April’s consumer price index was higher than expected (11/5). However, the core personal consumption expenditures index, favored by the Fed, slowed (27/5). Spending also shifted away from goods and toward services, which have been less susceptible to price increases. |
| Retail Sales Beat Forecasts, Revised Up | Retail sales rose prices rose 0.9% in April, beating the 0.7% estimate. The Commerce Department also revised the March increase sharply higher from +0.5% to +1.4%. Miscellaneous items and restaurants led the growth. (17/5) |
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESM22(June) | 17 Jun 22 | ESU22(Sep) | +0.2% |
| *S&P 500 E-Mini Micro (@MES) | MESM22 (June) | 17 Jun 22 | MESU22 (Sep) | +0.2% |
| Nasdaq-100 E-Mini (@NQ) | NQM22 (June) | 17 Jun 22 | NQU22 (Sep) | +0.3% |
| *Nasdaq-100 E-Mini Micro (@MNQ) | MNQM22 (June) | 17 Jun 22 | MNQU22 (Sep) | +0.3% |
| Dow Jones E-Mini (@YM) | YMM22 (June) | 17 Jun 22 | YMU22 (Sep) | +0.3% |
| *Dow Jones E-Mini Micro (@MYM) | MYMM22 (June) | 17 Jun 22 | MYMU22 (Sep) | +0.3% |
* Micro contracts are one-tenth the size of standard e-minis.
Events to Watch This Month
| Date | Event | What to watch |
|---|---|---|
| Fri, 3-Jun | Employment Report | Non-farm payroll changes and revisions, unemployment, wage inflation. |
| Fri, 10-Jun | Inflation reports for May | Consumer prices are due 10 June, followed by producer prices on 14 June. |
| Tue, 14-Jun | Retail sales for May, Federal Reserve Meeting | Will retail sales remain strong? Will Fed signal 75bp rate hikes? |
| Thu, 16-Jun | Housing starts, building permits for May | Will higher mortgage rates slow homebuilding? |
| Mon, 27-Jun | Consumer news | Nike (NKE) reports earnings after the closing bell of 27-June. Consumer confidence is due the morning of 28-June. |
Sector Watch
Energy16%- Utilities4%
- Financials3%
- Communications2%
- Health Care2%
- Materials1%
- S&P 5000%
- Industrials0%
- Technology1%
- Consumer Staples4%
- Real Estate5%
- Consumer Discretionary5%
Energy
Utilities
Financials
Communications
Health Care
Materials
S&P 500
Industrials
Technology
Consumer Staples
Real Estate
Consumer DiscretionaryEnergy stocks continued to outperform as demand grew and inventories tightened to their lowest level since 2008.
Utility stocks gained as buyers returned following a breakout earlier in the year.
Technology stocks declined as Apple and Microsoft broke support. Semiconductors bucked the weakness, gaining 6%.
Consumer Discretionary fell as supply-chain issues hurt results at companies like Target and Under Armour. The sector pared losses later in the month as Amazon.com bounced at a two-year low.
Noteworthy Calls & Predictions
03-May
Paul Tudor Jones: Current market is one of the worst since the 1970s for stocks and bonds. The billionaire hedge fund manager said the market was in “unchartered territory” because of inflation and volatility. He added that investors should focus on capital preservation and trend following.
S&P 500
10-May
Bespoke Investment Group: Semiconductor stocks are trading at an atypical discount to the S&P 500. Improving relative strength in the industry is a potential positive for the broader market. Chipmakers may be more attractive than other technology stocks, Bespoke founder Paul Hickey said in an interview on CNBC.
Semiconductors
13-May
Mark Hulbert: Widespread bearishness among market-timing newsletters is giving a potential contrary bullish signal. A “wall of worry” is emerging that could result in “a meaningful rally,” he wrote.
S&P 500
17-May
Bank of America: Investor cash levels reach their highest since September 2001 amid stagflation worries. Strategist Michael Hartnett said gloomy sentiment could produce a bear-market rally, but Fed rate hikes make lower prices likely.
S&P 500
24-May
Evercore Strategist Julian Emanuel: S&P 500 could rally back to 4,800 because earnings continue to grow. Retail investors are likely to start buying again when they appreciate the strong job market and believe inflation is easing.
S&P 500
Disclosure
Monthly Market Roundup brings you ideas about potential trading opportunities, key economic events and education that is designed to help you become a better self-directed investor. No offer or solicitation to buy or sell securities, securities derivatives or futures products of any kind, or any type of trading or investment advice, recommendation or strategy, is made, given or in any manner endorsed by any TradeStation affiliate. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. Investments and trading involve risks, including possible loss of principal. You should, therefore, carefully consider whether such trading is suitable for your financial condition.
The material is provided by TradeStation International Ltd, authorised and regulated by the FCA (554431) in the UK and acting as an introducing broker to affiliated and non-affiliated brokers such as TradeStation Securities, Inc., and Interactive Brokers (U.K.) Ltd. The firm does not provide investment advice or trading recommendations.