Market

Another ugly day for anything not NVDA. SPY now back below the 10 day and red this morning. Will be watching the gap up low of $525.18 and Thursday’s low of $524.72 for support. Currently below both areas.

For the QQQs will be watching the 10 day, around 455.08, then Thursday’s low of $451.85, and the gap up low of $446.90.

I talked about the Dow yesterday as a possible long if it could break above the 50 day. That didn’t happen, and this morning it is the weakest because of CRM earnings. Nothing to do there at the moment.

Small caps are green this morning and could be buyable if they break over the 50 day. Not sure I would ahead of PCE tomorrow though.

I’ve been talking about watching semi’s and rates for direction. Because of NVDA the semi’s are kind of skewed. Still important because if NVDA cracks it probably brings the entire market with it, but rates now more important. Rates have been spiking, hence market weakness.

Watch 4.737%, which is the April high. Don’t want to see that taken out. Figure there ought to be some resistance at 4.7% also.

Rising Bond Yields Weigh on Stocks-WSJ

Minneapolis Fed President Neel Kashkari said this week that the central bank could hold rates higher for longer to gain clarity on inflation, and warned that a hike isn’t off the table. Investors now see a 54% chance the Fed keeps rates unchanged through its next three meetings, according to the CME FedWatch tool, up from 42% a week ago.

The Fed Thinks It’s Fighting Inflation. Think Again. Even at more than 5.25%, the central bank’s short-term interest-rate target might not be high enough to cool the economy.-Bloomberg

If so, the neutral short-term rate currently would be about 5% (a 2% r* plus 3% inflation), meaning that the current fed funds rate of 5.25% to 5.50% is exerting negligible restraint on growth and inflation.

Also figure PCE will go a long way towards deciding direction. From Mike O’Rourke…

The continuation of the Treasury Bond selloff means that the 10Yr Treasury yield continues to rise above the S&P 500 earnings yield and the negative spread is testing the two decade lows registered in April.

I’m a dip buyer, but with NVDA the only thing going up and rates spiking I am keeping my position sizes smaller. Again, PCE going to be important tomorrow. Can’t ignore this either…

And this…

This Record Stock Market Is Riding on Questionable AI Assumptions Just four giant technology stocks added more market value than the rest of the S&P 500 put together this month. More than half of the gain came from Nvidia.-WSJ

But you also have this. We should be launching an ETF soon that trades the next generation AI names.

C3.ai rides ‘intensifying’ wave of AI demand as revenue jumps 20%-MarketWatch

Woke Companies

We will see. Patriotic Attractions Facing Closures at “Woke” Walt Disney World-ITM

Though many fans have called Disney World “woke” for its handling of political issues, neither of these closures would point to any ulterior motives being the case here. As a matter of fact, this would point to the opposite.

ESG

ESG has a branding problem. Here's how pension funds, money managers are adapting.-Pensions & Investments

“ESG certainly needs to be rebranded; What the name insinuates is that it relates to businesses who care more about E, S, and G than they do profits,” said Will McDonough, founder and chairman of Corestone Capital, a merchant bank that has worked with private equity firms. “At the end of the day investors want profits and gains, and have a separate pocket for charitable endeavors.”

Exxon Mobil Takes On Climate Extremists In Alaska, unlike California, officials look out for retirees’ financial interests.-WSJ

To protect its broader network of shareholders, Exxon Mobil in January took the unusual step of suing Arjuna Capital and Follow This, two shareholders that had submitted a proposal that would have undermined the company’s core business operations by pushing for ambitious emissions-reduction targets. Shareholders had already rejected previous similar climate proposals.

DEI

DEI scores a court win-Axios

A federal judge in Ohio last week dismissed a closely watched case filed by America First Legal, the anti-diversity, equity and inclusion group founded by former Trump White House senior adviser Stephen Miller.

Why it matters: The decision seems like a victory for corporate DEI initiatives, but Miller and his allies still appear to be winning the broader war against these programs.

The big picture: Court victories could provide reassurance to companies that are sticking with their DEI efforts in the face of all these lawsuits.

But many aren't. Even with courtroom success, there's been a chilling effect. Companies are changing DEI programs to avoid targeting any specific racial or demographic group.

Things That Get Blamed for Climate Change

Crime

Wish I could get my GUNZ ETF out, still being censored unfortunately. Doesn’t seem like our cities are going to be safer anytime soon.

Border

How is stuff like this not major news? MEHLMAN: Illegals’ Attempt To Infiltrate Marine Base Highlights The Same Negligence That Led To 9/11-Daily Caller

On May 3, two Jordanian illegal aliens were apprehended as they attempted to enter the Marine Corps base in Quantico, Virginia, in a box truck. The two were posing as Amazon delivery drivers, although Amazon denies that they were employed by the company. When an alert military police officer stopped them at the gate, they attempted to force their way into the compound (which also houses the FBI’s training facility). Security personnel were able to deploy vehicle entry barriers and prevent them from breaching the base.

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