NEWS
Market Makes All-Time Highs

The U.S. stock market indexes climbed the wall of worry to new all-time highs as investors and traders took advantage of the growing number of breakouts across various sectors. Notably, Stocktwits community sentiment for the major indexes has shifted into bearish territory. Let’s see what else you missed. 👀

Today's issue covers a mid-May market recap, a U.S. inflation and economy update, and a key crypto stock breaking out alongside Bitcoin. 📰

Here's today's heat map:

11 of 11 sectors closed green. Technology (+2.25%) led, & consumer staples (+0.06%) lagged. 💚

Meme stocks GameStop, AMC Entertainment, SunPower, and more came back down to earth despite the broader market continuing its journey to new all-time highs. Roaring Kitty continues to tweet regularly, but it wasn’t enough to boost meme stock prices today. 🪫

Petco Health & Wellness is on meme stock watch. It surged 28% after the pet products retailer appointed a new executive chairman of the board, who purchased about $2.50 million worth of shares as part of the process. 🐶

Dell Technologies soared to new all-time highs after Morgan Stanley raised its price target on the stock, citing increasing momentum with enterprise clients and AI server demand. 💻

Insurer Chubb popped 7% after hours to new all-time highs after it was revealed as the confidential stock Warren Buffett’s Berkshire Hathway has been buying. It now has a $6.70 billion stake, accumulating 26 million shares. 💰

Palo Alto Networks popped on the news that it’s buying security assets from IBM to expand its customer base. Traders flagged it as one of several cybersecurity stocks showing strength as the sector breaks out. 🛡️

Petrobras shares fell 7% after the state-run oil firm’s CEO and CFO were unexpectedly swapped out by Brazilian President Luiz Inacio Lula da Silva. 🛢️

And AST SpaceMobile shares soared 41% after announcing a commercial agreement with AT&T to bring its space-based broadband network direct to everyday cell phones. It also showed a narrower-than-expected loss. 🛰️

Other active symbols: $GME (-18.87%), $AMC (-20.00%), $GNS (+10.92%), $SPWR (-29.16%), $BIG (-16.56%), & $MARA (+11.79%). 🔥

Here are the closing prices: 

ECONOMY
Shelter And Gas Keep Inflation Elevated

Yesterday’s producer price index showed an uptick in wholesale prices, putting all eyes on today’s consumer price index (CPI) report.

The headline consumer price index (CPI) rose 0.30% MoM and 3.40% YoY, slightly less than anticipated. Meanwhile, core CPI rose 0.30% MoM and 3.60% YoY, its slowest annual increase since April 2021. 🔻

Notably, more than two-thirds of the headline increase was driven by gas prices and shelter, which rose 2.60% and 5.50% YoY, respectively. For shelter, many continue to expect a decline shortly because of the lagging effect of how it’s measured in the CPI calculation. But we haven’t seen that just yet.

CNBC’s chart below shows the overall progress of disinflation, with headline numbers flat and core continuing to move lower (albeit slowly). 📊 

In addition, retail sales in April were flat MoM and up 3% YoY, as evidence continues to build of a consumer slowdown. March’s ratio of business inventories to sales also rose to 1.39 from 1.37 as demand tapered off. 🛍️

This consumer update, plus inflation’s progress and the softening of the labor market, has Fed officials reiterating that a hike is off the table but that rates will stay higher for longer.

Other economic data was also released today, showing homebuilder confidence falling back into pessimistic territory in May as mortgage rates remained elevated. Empire State Manufacturing survey showed a continued decline in May, as this sector’s monthly activity measures remain volatile.

STOCKS
A Mid-May Market Check-In

With the S&P 500 and Nasdaq 100 continuing to lead the way higher with double-digit YTD returns, it’s worth pointing out that the top sector in the market is not what many would expect. 🤔

The chart below shows that utility stocks are actually outperforming everything else, followed closely by communication services and energy. Technology is certainly still up there, but the chart below shows a broadening out of participation in the market that stock bulls have been looking for. 🐂

As for asset class returns, stocks continue to perform well, specifically international stocks that have lagged for much of the last decade. Indexes like the Nikkei 225 and Euro Stoxx 50 have less tech exposure and more cyclical stocks, which makes sense why they’re outperforming U.S. indexes. 🌏

Outside of that, bonds continue to struggle, while certain commodities like cocoa and orange juice deliver outsized returns due to supply issues. Notably, base and precious metals are also performing well and remain the recent standouts in the commodity space. ⚒️

Clearly, the current market environment is similar but different from last year’s. More stocks, sectors, and assets are participating in the current rally, which is why many believe the current push to new all-time highs has legs.

Time will tell if they’re right, but we’ll revisit these charts in a few weeks as we examine the seasonal phenomenon of “sell in May and go away.” 🗓️

STOCKTWITS “CHART ART”
MicroStrategy Soars Amid Bitcoin’s Fresh Breakout 🤑

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Bullets From The Day

📊 Sony-backed chip startup heads for an initial public offering (IPO). The startup making tiny single-board computers, Raspberry Pi, is considering going public on the London Stock Exchange (LSE). This would represent a major win for the exchange, which has been losing out on high-profile listings to U.S. markets for years. The IPO would allow majority shareholder, Raspberry Pi Foundation, to continue promoting the study of computer science globally. CNBC has more.

📺 Netflix will challenge Google and Amazon by building its own ad network. Just a year and a half after entering the ads business, the streaming giant is taking its next major step to boost its margins by bringing its ad tech in-house. The move will allow the company to fully control its advertising future and, if done successfully, juice its profits. It also touted the success of its ad-supported tier, reporting more than 40 million global monthly active users. More from TechCrunch.

🚑 Walgreens rolls out a generic version of Narcan to shelves. The struggling pharmacy retailer will sell its own generic version of the lifesaving opioid overdose reversal drug that it first rolled out to drugstore shelves last fall. Naloxone will cost $10 less than the brand-name version sold at Walgreens and other retailers. While the company says its decision is meant to increase access to the medication, investors say generics are an important part of Walgreens’ plan to “revive” its struggling business and stock price. NBC News has more.

Links That Don’t Suck

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🚌 Uber announces shuttle rides, features for caregivers and Costco perks

🚫 Incoming Vanguard CEO won't reverse decision not to launch Bitcoin ETF

🤖 OpenAI co-founder and Chief Scientist Ilya Sutskever is leaving the company

⚡ Tesla’s Chinese rival Nio launches a new brand and car that undercuts the Model Y by $4,000

📱 TikTok’s new suitor is former Dodgers owner Frank McCourt, as another lawsuit pushes back against ban

*3rd Party Ad. Not an offer or recommendation by Stocktwits. See disclosure here.

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