Nvidia stole the earnings spotlight last week. This week, it’s all about the debt ceiling

By Dustin Moskovitz On May 30, 2023

As has been the case for most of the year, last week’s equities story centered around the tech-heavy Nasdaq Composite , which rallied Thursday and Friday on the back of Club holding Nvidia ‘s (NVDA) stand-out earnings report. In addition to beating on revenue and profit, the chipmaker unveiled a jaw-dropping forecast for its current quarter, while hinting at an even stronger second half of the year for its data-center business. The stock surged roughly 25% on Thursday. The Nasdaq posted its fifth-straight weekly gain, rising 2.5%. The S & P 500 also managed to eke out a weekly gain, advancing 0.3%. The Dow Jones Industrial Average , meanwhile, lost 1% for the week. Looking ahead, investors this week will be laser-focused on Washington, as Congress prepares to vote on a bill to raise the U.S. debt ceiling . President Joe Biden and House Speaker Kevin McCarthy reached an “agreement in principle” late Saturday to increase the government’s borrowing limit and avoid a potentially catastrophic default at the start of next month. Elsewhere, corporate earnings season is now largely in the rearview mirror. Ninety-seven-percent of the S & P 500 has now reported quarterly results, 76% of which have beat on revenue and 78% of which have beat on earnings-per-share. Macroeconomic data will take center stage again this week, particularly on the jobs front. The ADP employment report is set to be released on Wednesday, followed by the government’s monthly non-farm payroll report. If the news shows unemployment ticked up last month it could allow the Federal Reserve to pause interest-rate hikes when it convenes in early June, which would be welcome news for equities markets. The markets are closed Monday for the Memorial Day holiday. But the shortened trading week ahead still features some key earnings and economic data. Salesforce (CRM) is the final Club name to report results for this season, on Wednesday after the closing bell. Here’s a run-down of the key economic events to watch this week. Monday, May 29 Markets closed for Memorial Day Tuesday, May 30 9 a.m. ET: S & P/Case Shiller home price index (March) 10 a.m. ET: Consumer confidence (May) Before the bell: Carlyle Group (CG) After the bell: HP Inc. (HP), Hewlett Packard Enterprise (HPE) Wednesday, May 31 10 a.m. ET: April JOLTS (Job Openings and Labor Turnover Survey) Before the bell: Advance Auto Parts (AAP), Capri Holdings (CPRI) After the bell: Salesforce , Nordstrom (JWN), Chewy (CHWY), CrowdStrike (CRWD), Okta (OKTA) Thursday, June 1 8:15 a.m. ET: ADP’s private-sector May employment report 8:30 a.m. ET: Weekly jobless claims and unit labor costs and productivity (Q1) 10 a.m. ET: Construction spending (April) Before the bell: Dollar General (DG), Macy’s (M), Hormel Foods (HRL) After the bell: Dell (DELL), Broadcom (AVGO), lululemon athletica (LULU), Five Below (FIVE), Zscaler (ZS), MongoDB (MDB) Friday, June 2 8:30 a.m. ET: Employment report: Non-farm payrolls and jobless rate (May) Looking back Last week, three Club holdings reported earnings. Nvidia’s blowout quarter and guidance raise late Wednesday and Thursday’s subsequent stock surge got the most attention. Cybersecurity leader Palo Alto Networks (PANW) released stellar numbers late Tuesday, balancing profits with growth and protecting margins. Costco (COST) late Thursday saw strong margins in its latest quarter. New homes sales rose 4.1% in April, according to a joint report from the U.S. Department of Housing and Urban Development and the Census Bureau, benefiting in part from limited supply. The U.S. government revised first-quarter gross domestic product higher, to an annualized rate of 1.3%, up from an initial 1.1% estimate On Friday, consumer spending and durable goods orders came in stronger than expected. The Federal Reserve’s favorite inflation gauge — core personal consumption expenditures price index — was also hot , bumping the market odds for another interest-rate hike in June to around 64%, according to the CME FedWatch Tool. The central bank holds its next policy meeting on June 13-14. As of Friday’s settle, the U.S. dollar index rose to just above the 104 level. Gold is trading at around $1,943 per ounce. West Texas Intermediate crude prices are hovering in the low-$70s-per-barrel region. The yield on the 10-year Treasury advanced to around 3.8%. Club trades Last Monday , we booked some profits in Eli Lilly (LLY), as the stock broke out to another all-time high. It was a small 50-share trim. We still love Lilly and own 150 shares for a 2.38% weighting in the Club portfolio. On Thursday , we bought the recent dip in beer, wine and spirits giant Constellation Brands (STZ). It was a small 20-share add on the belief that some shifting beer-industry trends will benefit STZ. We own 430 shares for a 3.74% weighting in the portfolio. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Speaker of the House Kevin McCarthy talks to reporters about the debt ceiling after the departure of White House negotiators, at the U.S. Capitol in Washington, U.S., May 23, 2023.

Kevin Lamarque | Reuters

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