Stocks are on track to open higher on Friday, aiming to close higher for the third straight week. The S&P 500 and Nasdaq Composite both saw gains on Thursday, with the Dow Jones Industrial Average extending its win streak to seven days. Utility stocks have been performing well recently, with all three indices up by at least 3.5% for the month.
Some notable stories in the market this week include reports of private equity companies potentially purchasing Peloton and T-Mobile and Verizon exploring a purchase of U.S. Cellular. Earnings have been stronger than expected this quarter, leading forecasters to increase expectations for the second quarter. Stock buybacks have also been on the rise, with companies repurchasing a significant amount of their own stock.
Stock buybacks serve as a company-specific “put” in the market, providing a theoretical floor for stock prices. Investors are hopeful that the Fed will cut interest rates this year, though expectations have tempered slightly. The Bank of England indicated that rate cuts are likely coming, adding to the overall sentiment regarding interest rates and their impact on the market.
Sweetgreen shares are expected to rise by 22% following strong earnings, while Roblox experienced a 14% drop after missing earnings expectations. Chinese EV maker Zeeker will begin trading under the ticker symbol “ZK” following its IPO pricing at $21. With recent weakness in Tesla and the EV sector overall, it will be interesting to see how Zeeker performs in the market.
The VIX trading just over 12.5 indicates a market that is steady but challenging for traders, while favorable for long-term investors. Despite a relatively uneventful week, next week’s activity is expected to pick up with retailers like Walmart reporting earnings and the release of inflation reports. Investors are advised to stick with their investing plan and long-term objectives amidst the market fluctuations.
This content from tastytrade, Inc. is intended for educational purposes only and does not constitute trading or investment advice. It highlights the current trends in the market, including stock performance, earnings reports, stock buybacks, interest rates, and notable individual stock movements such as Sweetgreen and Zeeker. The overall sentiment remains cautiously optimistic with an eye on upcoming economic reports and earnings releases.
