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Carvana stock price has soared after plunging to a low of $148 last month as concerns about Donald Trump’s tariffs jumped. CVNA has jumped to $257 on Friday, its highest level since February 18, and 75% above its lowest level this year, and 7,820% above the lowest point in 2023. Will the stock keep rising after earnings?

Carvana earnings ahead

Carvana has done well in the past few weeks as Donald Trump’s tariffs continue. Analysts believe that the company will be one of the top beneficiaries of the trade war as it boosts demand for second-hand vehicles. That’s because the new tariffs are expected to make new vehicles more expensive by between $1,000 and $10,000.

Cavana’s business has been doing well in the past few years as demand for its vehicles jumped and as the company continued to prioritize profitability over growth. It also sorted its debt issue that wanted to kill it. 

The annual revenues have jumped from $5.5 billion in 2020 to over $13.6 billion last year. It also managed to make a small profit of about $210 million.

The most recent results showed that Carvana’s business continued doing well in the fourth quarter. It sold 114,379 vehicles in the fourth quarter, a 50% increase from those it sold a year earlier. 

Its quarterly revenue jumped by 46% to $3.55 billion, while its operating income jumped to a record $260 million. 

Wall Street analysts expect the upcoming numbers to show that Carvana’s sales growth surged by 30.7% to $4 billion. The most optimistic analyst predicts that the company’s revenue will hit a record $4.2 billion. 

Carvana’s profitability is expected to keep growing as well. The average estimate is that its earnings per share rose from 23 cents to 75 cents last quarter. 

In the last earnings release, the management hinted that the company’s growth will continue accelerating this year if conditions allow.

Carvana valuation concerns

The main concern about Carvana is that its business is highly overvalued as it has a market cap of over $55 billion.

SeekingAlpha data shows that it has a forward price-to-earnings ratio of 81, much higher than the sector median of 15. Its non-GAAP PE ratio of 73 is also higher than the sector median of 14.

The best way to look at this is to compare it with other vehicle retailers in the US. CarMax, the largest used-car retailer in the US has a market cap of over $10 billion, while CarGurus has $3.5 billion and AutoNation has $6 billion. Lithia Motors is valued at over $8 billion.

These numbers mean that Carvana is bigger than the biggest firms in the vehicle retail industry. Analysts justify the valuation to the fact that Carvana is the fastest-growing companies in the sector. 

Carvana stock price technical analysis

CVNA stock price chart | Source: TradingView

The weekly chart shows that the CVNA share price has bounced back ahead of its earnings. It has risen in the last two straight weeks, as it remains above all moving averages, a sign that bulls are in control.

Carvana stock price has formed patterns that send mixed signals to its performance after earnings. On the negative side, it has formed a head and shoulders pattern, a popular bearish reversal signal.

It has also formed a cup and handle pattern, which often leads to a continuation over time. Therefore, the stock will likely retreat after the earnings. However, a move above the head section of $291 will point to more gains, potentially to the psychological point at $300. A drop below the support at $225 will point to more downside towards $200.

Read more: JPM raises Carvana stock target: how high could CVNA go in 2025?

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AppLovin stock price rose for two consecutive weeks, reaching its highest level since March 24 as investors bought the dip. This recovery will either accelerate this week or reverse when the company publishes its financial results. APP stock was trading at $307 on Monday, up by 52% above the lowest level in April.

AppLovin earnings ahead

The main catalyst for the AppLovin stock price is its upcoming earnings, which will provide more information about its business.

These earnings will especially be notable because of its performance in the past year, when it became one of the top performers in Wall Street. At its highest level this year, it was up by almost 6,000% from its lowest level in 2023.

This surge helped to transition a mid-cap technology company worth less than $2 billion into a juggernaut worth $230 billion. 

The results will also be notable as AppLovin’s market cap has dropped to about $112 billion today. This decline happened as investors sold off companies pitching their artificial intelligence credentials and after a short-seller warned that the company was exaggerating its sales.

Therefore, the upcoming results will provide more information about how the company performed in the first quarter. 

Wall Street analysts anticipate the results to show that the company’s sales rose by 30% YoY in Q1 to $1.38 billion. The highest estimate is for its revenue to come in at $1.43 billion, while the lowest forecast will be at $1.27 billion. 

We believe the company’s revenue will be either $1.39 billion or $1.40 billion since the firm has a long history of beating analysts’ estimates.

The average estimate is that its earnings per share (EPS) will be $1.96, higher than the 92 cents it made last year. 

Analysts see AppLovin’s annual revenue and earnings to be $5.62 billion and $7.6 billion, respectively. 

Read more: AppLovin stock price crashes as we predicted: what next for APP?

Valuation concerns remain

The biggest concern about AppLovin stock is that its valuation is still stretched even after the stock plunged. 

It still has a market cap of over $112 billion, making it one of the top players in the advertising industry. AppLovin’s revenue is expected to reach $8.42 billion in 2030.

It has a net income margin of 33%, meaning that the company’s annual profit will be about $2.7 billion or $3 billion at most. That means that AppLovin trades at a forward 2030 earnings per share (EPS) metric of about 38, which is a bit pricey.

Still, analysts are largely optimistic that the AppLovin stock price has more room to grow. The average estimate is that its stock will jump from the current $307 to $432, a 40% jump from the current level. Some of the top optimistic analysts are from companies like JPMorgan, Needham, Goldman Sachs, and Morgan Stanley.

AppLovin stock price analysis

APP stock chart | Source: TradingView

The daily chart shows that the APP share price bottomed at $200 in April and has then bounced back to the current $307. It has moved above the 50-day and 100-day Exponential Moving Average (EMA).

The stock has also formed an inverse head and shoulders pattern, a popular continuation sign in the market. Also, the two lines of the MACD have pointed upwards and are nearing their zero line. It has formed a bullish divergence pattern.

Similarly, the Relative Strength Index (RSI) has also formed a bullish divergence and moved above 50. Therefore, the stock will likely have a bullish breakout as bulls target the psychological point at $400. A drop below the psychological point at $200 will invalidate the bullish AppLovin share price forecast.

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Skechers is set to step into a new era. The global footwear giant announced on Monday that it has agreed to be acquired by private equity powerhouse 3G Capital in a deal that will take the company private.

The transaction marks a significant shift in the company’s corporate structure and reflects growing investor interest in consumer retail brands.

Under the terms of the agreement, 3G Capital will purchase Skechers for $63 per share in cash — a 30% premium over its most recent stock market valuation.

The buyout, which values Skechers at approximately $9.4 billion, underscores 3G Capital’s confidence in the brand’s long-term growth potential.

Once the acquisition is finalized, Skechers will be delisted from public markets and operate as a privately held entity.

Despite the ownership change, current CEO Robert Greenberg will retain his leadership role and continue executing the company’s strategic vision.

“With a proven track record, Skechers is entering its next chapter in partnership with global investment firm 3G Capital,” Greenberg said in a statement.

“Given their remarkable history of building iconic consumer brands, we believe this partnership will empower our team to keep delivering value to customers while driving sustained growth.”

3G Capital is known for its investments in major consumer-facing brands such as Burger King, Kraft Heinz, and Anheuser-Busch InBev.

The firm brings a hands-on operational approach that has reshaped global companies, often through aggressive cost-cutting and streamlined management structures.

The move comes at a time when legacy retail brands are exploring new strategies to maintain momentum in a rapidly evolving consumer landscape.

For Skechers, going private may offer more flexibility to innovate, expand internationally, and navigate shifts in consumer preferences without the pressure of quarterly earnings targets.

The deal still requires regulatory approvals and is expected to close later this year.

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The White House slammed the ‘radical left’ in a social media post Sunday, showing an AI-generated image of President Donald Trump wielding a lightsaber in celebration of May the Fourth, or ‘Star Wars Day.’

May 4 has long been regarded as a day to celebrate the iconic movie franchise as fans post on social media ‘May the Fourth be with you,’ an offshoot of the memorable Star Wars quote ‘May the force be with you.’

On Sunday, the White House took an opportunity to celebrate the popular day with a post on X, while also taking digs at the Trump administration’s biggest critics.

‘Happy May the 4th to all, including the Radical Left Lunatics who are fighting so hard to bring Sith Lords, Murderers, Drug Lords, Dangerous Prisoners, & well known MS-13 Gang Members, back into our Galaxy. You’re not the Rebellion—you’re the Empire,’ the White House wrote. ‘May the 4th be with you.’

The post included an AI-generated image of Trump, who not only donned a Jedi robe and set of ripped arms but also held a red lightsaber. Behind him in the image were two bald eagles and two American flags.

The post received mixed reactions.

‘Our efforts to FOIA info about a reported ‘Death Star’ have been stonewalled. And we pulled The Honorable Darth Vader as a judge when we sued so THAT will go nowhere,’ a user wrote.

Another user asked X’s AI feature Grok what the meaning of a red lightsaber is in Star Wars. Those who follow the science fiction franchise will remember Darth Vader, Kylo Ren and others associated with the dark side or Sith powers used a red lightsaber of some sort.

The Star Wars fandom website Wookieepedia explains that in the process of making a lightsaber, negative emotions like rage, hate, fear and pain would result in a red hue.

‘How do you not have one nerd on staff to tell you what color lightsaber is good and what color is bad???’ a user asked in reaction to the White House post.

But supporters of the president were quick to respond to reactions about the color of the lightsaber Trump is holding in the image.

‘People arguing Trump using a red lightsaber equates him to evil…R ed is literally one of the three colors in our nation’s flag,’ a user wrote. ‘He is the leader of the Republican Party which is often ascribed the color Red. Context matters.’

Fox News Digital has reached out to the White House for comment on the matter.

Still, the White House was not the only federal government agency to have fun with May the Fourth.

The U.S. Army Pacific posted an AI-generated image to social media of two soldiers with lightsabers – one holding red and the other holding a red, white and blue weapon – walking into combat at night, with the Milky Way Galaxy behind them.

‘Across every galaxy – known and unknown – no force rivals our discipline, strength, and precision,’ the post read. ‘We don’t just defend the world. We protect the future. Victory is forged not found. May the 4th be with you.’

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President Donald Trump decried the state of the motion picture industry in a social media post on Sunday while announcing plans to implement a Hollywood-related tariff.

In a Truth Social post on Sunday, Trump wrote that the ‘Movie Industry in America is DYING a very fast death.’

‘Other Countries are offering all sorts of incentives to draw our filmmakers and studios away from the United States,’ Trump claimed. ‘Hollywood, and many other areas within the U.S.A., are being devastated.’

The president said that the situation was a ‘concerted effort by other Nations and, therefore, a National Security threat.’

‘It is, in addition to everything else, messaging and propaganda!’ Trump wrote.

The Republican said that his plans to institute a tariff are in the works, and he authorized the Department of Commerce and the United States Trade Representative ‘to immediately begin the process of instituting a 100% Tariff on any and all Movies coming into our Country that are produced in Foreign Lands.’

‘WE WANT MOVIES MADE IN AMERICA, AGAIN!’ Trump concluded.

The comments come after several of Trump’s tariff plans have been paused in recent months due to market turmoil and backlash. On Sunday, Trump said that he would not drop tariffs on China to get Beijing to come to the negotiating table.

‘At some point, I’m going to lower them, because otherwise you could never do business with them,’ Trump told NBC’s Kristen Welker. ‘And they want to do business very much like their economy is really doing badly. Their economy is collapsing.’ 

Fox News Digital’s Danielle Wallace contributed to this report.

This post appeared first on FOX NEWS

President Donald Trump said Sunday that he plans to appoint a new national security advisor in about six months, telling reporters the former advisor, Mike Waltz, did not resign, but was instead tapped for an upgraded position as the administration’s ambassador to the United Nations.

Trump spoke with reporters on Air Force One on Sunday night, where he was asked about several topics, including the trade deals, Mexican cartels and the national security advisor position.

One reporter asked the president about Waltz’s exit as the national security advisor, which the president said he was being selected for what he called a ‘higher position,’ or an ‘upgrade.’

Trump also said Waltz did not make any mistakes, and, as the ambassador to the UN, he would do a good job.

‘I didn’t lose confidence in him,’ Trump said. ‘He’s going to the United Nations for a reason. To me, I think it’s personally, if I had assurance for myself… I’d rather have that job than the other.’

He also reiterated that Waltz did not resign, but instead, Trump moved him.

‘There was no resignation,’ the president said.

Waltz and other National Security Council staffers were ousted from their office on Thursday in the most high-profile executive office exits of the second Trump administration. Trump’s announcement on naming Waltz as U.N. ambassador unfolded just hours after the news began circulating. 

Trump told reporters Sunday that he plans to appoint someone to the national security advisor position within six months, saying there are a lot of people who want the job, which works into Secretary of State Marco Rubio’s – the interim national security advisor – current responsibilities.

The president was specifically asked if White House deputy chief of staff Stephen Miller was being considered for the role.

‘Stephen Miller at the top of the totem pole? I mean, I think he sort of indirectly already has that job… because he has a lot to say about a lot of things,’ Trump said. ‘He’s a very valued person in the administration, Stephen Miller.’

The president was also asked if any trade deals would be announced this week, answering that there could be some coming.

But when pressed if he could say more about the deals, Trump held back.

‘Nobody understands,’ he said. ‘We’re negotiating with many countries. But at the end of this, I’ll set my own deals because I set the deal. They don’t set the deal. I set the deal.’

Trump said he is meeting with almost all of the countries regarding trade deals, including China.

Explaining the process further, Trump said he will set the tariff, and a country could agree to it or not.

‘They don’t have to deal with us, which is ok, because we lost under Biden. We’re losing $5 billion a day,’ he said. ‘Think of it. $5 billion a day. Now we’re not dealing with China at all because of the tariffs… Because of that, we’re saving billions of dollars.’

During the gaggle, a reporter also asked if it was true that he offered to send U.S. troops to Mexico to take care of the cartels.

‘It’s true because they should be. They are horrible people that have been killing people left and right,’ Trump said. ‘They’ve made a fortune in selling drugs and destroying other people.’

He explained that the cartels are responsible for importing fentanyl into the U.S., which has killed over 300,000 people this year.

Trump called the cartel members ‘bad news.’

‘If Mexico wanted help with the cartels, we would be honored to go in and do it,’ Trump said ‘I told [Mexican President Claudia Sheinbaum] that I would be honored to go in and do it. The cartels are trying to destroy our country. They’re evil.’

The offer was ultimately rejected, which Trump said was because Sheinbaum is afraid of the cartels, so afraid that she ‘can’t even think straight.’

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Former Vice President Mike Pence was honored on Sunday night for his actions on Jan. 6, 2021, in defying his then-boss, President Donald Trump.

Pence received the John F. Kennedy Profile in Courage Award for his refusal to honor Trump’s request to throw out the results of the 2020 presidential election, and instead oversaw congressional certification of former President Joe Biden’s Electoral College victory.

‘Vice President Pence put his life career and that of his family on the line to execute his constitutional responsibilities. His actions preserved the fundamental democratic principle of free and fair elections and we are proud to honor him,’ former ambassador Caroline Kennedy, the late President Kennedy’s daughter, said in presenting Pence with the award.

Pence, in accepting the annual award, emphasized that it’s a ‘distinction that I will cherish for the rest of my life.’

And the former vice president, pointing to his actions on Jan. 6, said to a standing ovation, ‘I will always believe by God’s grace that I did my duty that day.’

In a Fox News Digital interview minutes after the awards ceremony, Pence said, ‘in all my travels across the country in the last four years, I’ve been deeply humbled by how many Americans have come up to me and just taken a point to encourage us and support us, and it convinces me that the American people know that what ever differences we may have, the Constitution is the common ground on which we stand.’

The now-65-year-old Pence was Indiana’s governor when Trump named him his running mate in 2016. For four years, Pence served as the loyal vice president to Trump during the president’s first term in the White House.

However, everything changed on Jan. 6, 2021, as right-wing extremists — including some chanting ‘hang Mike Pence’ — stormed the U.S. Capitol aiming to upend congressional certification, overseen by Pence as part of his constitutional duties as vice president, of Biden’s Electoral College victory.

The attack on the Capitol took place soon after Trump spoke to a large rally of supporters near the White House about unproven claims that the 2020 election was ‘rigged’ due to massive ‘voter fraud.’

Pence has long described the violent attack on the Capitol as ‘tragic’ and dishonoring to ‘the millions of people who had supported our cause around the country.’ He has emphasized that he did ‘the right thing’ and performed his ‘duty under the Constitution.’ He has also noted a number of times that he and Trump may never ‘see eye to eye on that day.’

While Pence, his family and top aides were hastily moved by Secret Service agents as rioters roamed the halls of the Capitol, Trump argued in a social media post that ‘Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution, giving States a chance to certify a corrected set of facts, not the fraudulent or inaccurate ones which they were asked to previously certify.’

Pence rejected the advice of the Secret Service that he flee the Capitol, and after the rioters were eventually removed from the Capitol, he resumed his constitutional role in overseeing the congressional certification ceremony.

The former vice president has repeatedly refuted Trump’s claim that he could have overturned the presidential election results. Despite that, hardcore Trump loyalists have never forgiven Pence, whom they view as a traitor, for refusing to assist the president’s repeated efforts to overturn the 2020 election results.

Pence in June 2023 launched a presidential campaign of his own, joining a large field of challengers to Trump gunning for the 2024 GOP nomination, becoming the first running mate in over 80 years to run against their former boss.

Pence ran on a traditional conservative platform, framing the future of the Republican Party against what he called the rise of ‘populism’ in the party. 

Among the slim anti-Trump base of the Republican Party, Pence received praise for his courage during the attack on the Capitol, often receiving thanks at town halls during his campaign for standing up to Trump. 

While Pence regularly campaigned in the crucial early-voting states of Iowa, New Hampshire and South Carolina, his White House bid never took off. Struggling in the polls and with fundraising, he suspended his campaign just four and a half months after declaring his candidacy.

The Profile in Courage Award is named for a book the late John F. Kennedy published in 1957 before he became president.

The award honors public officials who take principled stands despite the potential political or personal consequences. Among the previous recipients were former Presidents Barack Obama, George H.W. Bush and Gerald Ford.

Jack Schlossberg, JFK’s grandson, who introduced the former vice president at the awards ceremony, said Pence ‘saved America that day.’

Caroline Kennedy, in honoring the former vice president, noted her ‘political differences’ with Pence, but emphasized that ‘political courage is not outdated in the United States.’

And Pence, a well-known fiscal and social conservative, joked about speaking in front of an audience dominated by Democrats, saying that he was ‘the minority in this room.’

After dropping his own bid for the White House, Pence declined to endorse Trump, even after Trump clinched the GOP nomination last spring, though he did congratulate his former running mate after his victory last November.

Trump and Pence were seen shaking hands at former President Jimmy Carter’s funeral in early January – their first public appearance together in nearly four years.

Pence has emerged as a rare vocal Republican critic of Trump so far during the president’s second tour of duty in the White House.

He has critiqued Trump’s controversial and haphazard implementation of massive tariffs on America’s largest trading partners, which initially sparked a massive stock market sell-off, and raised concerns of increased inflation and talk of a recession.

He has also criticized the president’s upending of longstanding American foreign policy and has urged Trump to stand with longtime international allies.

Pence’s public advocacy group, Advancing American Freedom, also campaigned against the nomination of Robert F. Kennedy Jr. to lead the nation’s health agencies.

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Rep. Marjorie Taylor Greene, R-Ga., expressed her frustrations on a variety of political topics on Friday, stating in a post on X that she represents the Republican base and if she’s unhappy, the base is too.

The congresswoman suggested that the situation does not bode well for future elections, as President Donald Trump will not be on the ballot.

‘I represent the base and when I’m frustrated and upset over the direction of things, you better be clear, the base is not happy,’ Greene wrote. ‘When you are losing MTG, you are losing the base. And Trump isn’t on the ballot in the future, so do the math on that.’

Fox News Digital reached out to Greene’s office for a comment on her post, but did not receive a response by the time of publication.

‘I campaigned for no more foreign wars. And now we are supposedly on the verge of going to war with Iran. I don’t think we should be bombing foreign countries on behalf of other foreign countries especially when they have their own nuclear weapons and massive military strength,’ the lawmaker wrote.

She has expressed staunch opposition to the minerals deal the Trump administration struck with Ukraine last week. 

The White House indicated that the ‘partnership between the United States and Ukraine establishes a fund that will receive 50% of royalties, license fees, and other similar payments from natural resource projects in Ukraine.’

Ukrainian official Yulia Svyrydenko noted, ‘the Fund will be financed exclusively from NEW licenses,’ and the U.S. ‘will contribute to the Fund. In addition to direct financial contributions, it may also provide NEW assistance — for example, air defense systems for Ukraine.’

Greene asked in her post, ‘Why on earth would we go over and occupy Ukraine and spend an untold amount of future American taxpayer dollars defending and mining their minerals as well as potentially putting American lives at risk and future war? Why don’t we just mine our own rare earth minerals that are tied up on federal lands that the government confiscated years ago?’

Another issue Greene expressed frustration with is the coronavirus pandemic, specifically the COVID-19 vaccines.

‘I also campaigned on accountability for the communist and tyrannical acts made by the government during Covid. Yet the Covid vaccine still has FDA approval even though there are millions reported injuries and deaths, and this mRNA vaccine is known to have horrific side effects and DOES NOT STOP PEOPLE FROM CATCHING COVID. And to this day, it’s still on the childhood vaccine schedule, why on earth is this happening?’ she asked.

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Chinese bargain retailer Temu changed its business model in the U.S. as the Trump administration’s new rules on low-value shipments took effect Friday.

In recent days, Temu has abruptly shifted its website and app to only display listings for products shipped from U.S.-based warehouses. Items shipped directly from China, which previously blanketed the site, are now labeled as out of stock.

Temu made a name for itself in the U.S. as a destination for ultra-discounted items shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s been able to keep prices low because of the so-called de minimis rule, which has allowed items worth $800 or less to enter the country duty-free since 2016.

The loophole expired Friday at 12:01 a.m. EDT as a result of an executive order signed by President Donald Trump in April. Trump briefly suspended the de minimis rule in February before reinstating the provision days later as customs officials struggled to process and collect tariffs on a mountain of low-value packages.

The end of de minimis, as well as Trump’s new 145% tariffs on China, has forced Temu to raise prices, suspend its aggressive online advertising push and now alter the selection of goods available to American shoppers to circumvent higher levies.

A Temu spokesperson confirmed to CNBC that all sales in the U.S. are now handled by local sellers and said they are fulfilled “from within the country.” Temu said pricing for U.S. shoppers “remains unchanged.”

“Temu has been actively recruiting U.S. sellers to join the platform,” the spokesperson said. “The move is designed to help local merchants reach more customers and grow their businesses.”

Before the change, shoppers who attempted to purchase Temu products shipped from China were confronted with “import charges” of between 130% and 150%. The fees often cost more than the individual item and more than doubled the price of many orders.

Temu advertises that local products have “no import charges” and “no extra charges upon delivery.”

The company, which is owned by Chinese e-commerce giant PDD Holdings, has gradually built up its inventory in the U.S. over the past year in anticipation of escalating trade tensions and the removal of de minimis.

Shein, which has also benefited from the loophole, moved to raise prices last week. The fast-fashion retailer added a banner at checkout that says, “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.”

Many third-party sellers on Amazon rely on Chinese manufacturers to source or assemble their products. The company’s Temu competitor, called Amazon Haul, has relied on de minimis to ship products priced at $20 or less directly from China to the U.S.

Amazon said Tuesday following a dustup with the White House that had it considered showing tariff-related costs on Haul products ahead of the de minimis cutoff but that it has since scrapped those plans.

Prior to Trump’s second term in office, the Biden administration had also looked to curtail the provision. Critics of the de minimis provision argue that it harms American businesses and that it facilitates shipments of fentanyl and other illicit substances because, they say, the packages are less likely to be inspected by customs agents.

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The S&P 500 index and its ETFs like SPY and VOO have bounced back in the past few weeks as investors buy the dip and bet that the worst is now behind us. After crashing to a low of $480 in April, the S&P 500 Index has jumped to $560, and is targeting the all-time high of $610. This article explains why one should not sell in May and go away, as the old saying suggests.

SPY ETF has numerous catalysts in May

Selling the S&P 500 Index in May and going away is risky because it has numerous catalysts that may push it higher this month.

The first catalyst comes from an unlikely source: the weak US economic data. Numbers released this week sent a red alert on the state of the American economy as Donald Trump’s trade war starts to bite.

It started on Tuesday when the US published weak consumer confidence report. According to the Conference Board, consumer confidence dropped to 87, the lowest level in years as many of them expressed worries about inflation and the labor market. 

On the following day, the US published weak trade numbers that revealed that the trade deficit surged to a record high as companies rushed to buy ahead of tariffs. 

Further data showed that the private sector added just 61,000 jobs in April, missing the expected figure by far. More numbers revealed that the economy contracted by 3% in the first quarter. 

While these numbers were all bad, they are good news for the stock market as they will trigger a reaction from the Federal Reserve and Donald Trump. Historically, the Fed reacts to major black swan events by cutting interest rates and implementing quantitative easing (QE). 

Therefore, the Fed will likely start pivoting in the coming months, which will boost the stock market.

Trump and China talks

The other reason not to sell the S&P 500 Index in May is that there are signs that the US and China will start negotiations on trade. 

Donald Trump has signaled that he will be ready to talk with China. And the WSJ has reported that he will be ready to make his first offer of cutting his 145% tariff to 50% at the start of talks.

On Friday, Beijing also said that it was assessing the possibility of trade talks with the United States. Such a move would end the stalemate that has been there in the past 30 days. 

While a deal will not come soon, signs of negotiations will be welcome by investors and push them higher in the coming months. An OCBC analyst warned that there will be volatility along the way, saying:

“The high level of reciprocal tariffs on China is not sustainable, so the market expects the US and China to start negotiating at some point. The beginning of negotiations will likely drive market volatility again because it is not expected to be plain sailing.”

S&P 500 Index technical analysis

S&P 500 Index chart by TradingView

The weekly chart shows that the S&P 500 Index bottomed at $482 in April, and has bounced back to $560. It has jumped above the 100-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has pointed upwards. 

Therefore, the index will likely continue rising this month. If this happens, the next point to watch will be at $610, the highest point earlier this year. A move above that level will point to more gains towards $700.

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