NEWS
Bonds Make A Big-Time Comeback

The market was mixed today as meme stocks took a back seat to economic data and the strong move in bonds. Still, plenty of stocks are on the move as earnings trickle in and the major indexes markets churn near all-time highs. Let’s see what you missed. 👀

Today's issue covers the hubbub over today’s jobs data, why $HPE may be home-free, and two foreign stock markets rocked by election jitters. 📰

Here's today's heat map:

6 of 11 sectors closed green. Real estate (+0.95%) led, & materials (-1.11%) lagged. 💚

GameStop shares were down about 6% today as Massachusetts securities regulators began a probe into “Roaring Kitty’s” recent GameStop trades as concerns about manipulation spread. 🚨

Paramount Global shares gave back gains after its leadership team outlined a future for the company if its sale to Skydance Media doesn’t materialize. 😟

Intel fell on news that it entered into a joint venture agreement with Apollo Global Management, leading an $11 billion investment for a 49% equity stake in the chipmaker’s Fab 34 manufacturing facility. 🏭

Boston Beer shares slipped on news that cannabis producer Green Thumb Industries sent a letter expressing a strong interest in merging as the Canadian-based company looks to hop onto a U.S. exchange. 🍻

Bath & Body Works dipped 13% after topping first-quarter expectations but providing disappointing earnings guidance for its current quarter. 🫠

Cruise stocks remain in focus, with Carnival rising 6% on the news it’s folding P&O Cruises Australia into its flagship brand as it looks to expand its capacity. 🛳️

Cybersecurity firm CrowdStrike rose 7% after its quarterly results and guidance topped Wall Street’s expectations. 🛡️

Guidewire Software rose 8% after the insurance-focused software maker raised its full-year revenue guidance and beat third-quarter results. And analytics firm Verint Systems rose 9% after its earnings and revenues topped estimates. 💪

Other active symbols: $VKTX (-9.70%), $JDZG (-85.97%), $ANNX (+30.79%), $WIMI (+25.58%), $HOLO (+32.00%), & $MLGO (+670%). 🔥

Here are the closing prices: 

ECONOMY
Did Bonds Just Break Their Bearish Trend?

Interest rates have been rising since December, with many expecting them to hit their November highs again and potentially continue onward.

However, today’s action suggests we may be seeing something different happen, and it’s all because of the jobs market. 💼

If you’ve been following along, we’ve discussed the labor market’s softening at length. But one key measure we’ve focused on has been total nonfarm job openings, which fell again in April and are now just above their pre-pandemic peak.

More importantly, the ratio of jobs available per unemployed worker dipped from 1.30 to 1.24, its lowest level since June 2021. 🔻

This is great news for the Fed and its fight against inflation, given that a tight labor market keeps upward pressure on wages. And for the last few months and quarters, upward pressure on wages has abated such that they’re still growing faster than inflation but not at historically high levels.

This is likely why we saw a rebound in the bond market today, and technical analysts everywhere pointed out the noticeable change in character. 🕵️

The 20+ Year Treasury ETF ($TLT) is one of the more popular vehicles for betting on interest rate direction because its duration gives it a higher beta than its shorter-duration peers.

And right now, ETF is breaking out above two significant levels. The first is the downtrend line from its December highs, and the second is its 200-day moving average (which many market participants use to track an asset’s long-term trend). 📈

Now, does this mean that interest rates are done rising forever? Certainly not. But what it suggests is that in the near term, momentum may have shifted to the downside in rates (and to the upside in bonds).

Should this move stick, the playbook for which sectors of the market are performing best might switch up…which is why it’s worth highlighting today. 👍