NEWS
Bulls Eke Out A Weekly Gain

Even as Nvidia’s short-term trend unravels, stocks were able to close out the shortened holiday week in the green. Traders continue to debate whether we’ll see a meaningful correction or if this pullback in tech is the start of a much-needed rotation into other market areas. Let’s see what you missed. 👀

Today's issue covers CarMax’s profits falling 33%, AMC’s latest financing scheme, and which “boring” stocks are breaking out. 📰

Here's today's heat map:

6 of 11 sectors closed green. Consumer discretionary (+0.84%) led, & utilities (-0.59%) lagged. 💚

The median price of an existing home sale in the U.S. was $419,300 during May, up 5.8% YoY to a new all-time high. Still, low inventories and unaffordability have caused the number of homes sold to reach a 30-year low. 🏘️

The S&P Global PMI data showed U.S. business activity continued to grow, with the composite index hitting a 26-month high. Meanwhile, Europe’s composite index fell, with France’s election uncertainty weighing on activity. 🏭

Meanwhile, the Conference Board-leading economic index fell again in May, continuing its two-year downtrend after briefly turning positive in February. While the index doesn’t signal a recession ahead, it points toward slower growth over the coming six months. 🔻

Hertz Global jumped 16% after increasing its planned bond offering from $750 to $1 billion, giving it more funds to refresh its vehicle fleet. 🤑

Boeing supplier Spirit AeroSystems rose another 6% on news that the aerospace and defense giant is nearing a deal to purchase it. ✈️

Semiconductor stocks slumped despite proponents like SoftBank CEO Masayoshi Son talking up the sector. Son said artificial intelligence (AI) that is 10,000 times smarter than humans will be here in 10 years. 🤖

And Zealand Pharma shares soared by 18% after showing positive weight loss drugs from its drug contender, offering similar weight loss results and a “better patient experience” than GLP-1RA-based treatments. 💊

Other active symbols: $GME (-6.49%), $IBRX (+11.69%), $OXY (-2.43%), $CLOV (+21.36%), $CDZI (+2.03%), and $FUFU (+31.21%). 🔥

Here are the closing prices: 

EARNINGS
Affordability Challenges Squeeze CarMax Profits

As outlined in the section above, the housing market’s affordability crisis is weighing on Americans heavily. However, used car retailers like CarMax continue to signal similar issues in the automobile market. ⚠️

The used car retailer’s adjusted earnings of $0.97 per share topped the $0.95 expected, but revenues of $7.11 billion were $0.05 billion shy of analyst estimates. Retail used-unit sales fell 3.10% YoY, with average retail selling prices falling 2.70% ($700) per unit. 🔻

Used car prices continue to fall, down about 9% YoY and 25% from their late 2021 peak. However, higher financing costs and low inventory are keeping a lid on demand. Hmmm, that sounds a lot like the housing market. 🤔

CEO Bill Nash said he was encouraged by trends during the first quarter, but ongoing headwinds of widespread inflationary pressures, higher interest rates, and tightened lending standards remain.

As a result, the company remains focused on preserving profitability through operational improvements, positioning itself as a leader for the eventual turnaround in the used car market.

Speaking of turnaround, CarMax shares have been trying to carve out a bottom over the last few months. With Stocktwits sentiment pushing into “extremely bullish” territory, we’ll have to see if today’s news was enough of a catalyst to get the stock back on the right track. 🐂

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