MarketBeat Week in Review – 5/22 - 5/26

Key Points

• Bullish investors are cheering a possible resolution to the debt ceiling standoff. 
• But the latest reading of the Personal Consumption Expenditures (PCE) index may keep the rally muted.  
• Next week will be a short trading week but investors will still get information on housing, employment, and consumer confidence.    
• Here are some of the most popular articles from this week.  

Two competing stories are fighting for investors’ attention. The bulls are trying to push the market higher in expectations of a resolution to the debt ceiling standoff. But any excitement is being muted by a hotter-than-expected reading of the personal consumption expenditures (PCE) index. At the very least, the reality of sticky inflation confirms that the Federal Reserve will keep interest rates higher for longer. That will keep a ceiling on stocks. Next week is a short trading week as the markets are closed in observance of Memorial Day.

However, there will be key economic data culminating with the Jobs report on Friday, June 2. We’re entering what is historically a quieter period for the markets. But with many issues remaining unsettled, there may be more volatility than usual. The MarketBeat analysts are watching the stocks and stories that are moving the markets to keep you informed. Here are some of the most popular articles from this week.  

Articles by Jea Yu 

Two of the megatrends in the global economy are artificial intelligence (AI) and quantum computing. Jea Yu was tackling both this week in a series of articles. On the AI front, Yu was writing about two companies that were making news this week. C3.ai Inc. NASDAQ: AI stock is soaring after the company sparked a short squeeze when it surprised investors by raising its full-year fiscal earnings outlook two weeks before its earnings report. Turning his attention to quantum computing, Yu was writing about IonQ Inc. NYSE: IONQ, which is trading near a 52-week high after its earnings report. The company is pioneering quantum computing as a service (QCaaS). As its name suggests, this will allow customers to gain remote access to its quantum computers. Yu was also checking in on Blue Bird Co. NASDAQ: BLBD, the nation’s largest manufacturer of low-emission school buses. The company has a strong backlog of orders and will benefit from the Environmental Protection Agency (EPA) Clean School Bus Rebate Program which is helping the company make money where other EV companies are not.  

Articles by Thomas Hughes 

Two key bullish indicators are analyst upgrades and positive investor sentiment. With that in mind, Thomas Hughes was looking at two tech stocks that are displaying both indicators. And because the companies just went public in 2022, they’re still under the radar of most investors. Turning his attention to this past week’s earnings reports, Hughes was looking at Dick’s Sporting Goods NYSE: DKS. The company continues to report strong revenue and earnings that go against the general trend toward lighter consumer discretionary spending. That’s bullish for the high-yield stock that is already a favorite of buy-and-hold investors. Hughes was also writing about bullish news for Pfizer Inc. NYSE: PFE. The company released positive results for a peer review study for an obesity drug that could help the company offset a portion of the revenue it will likely lose as a series of patents expire later this year.  

Articles by Sam Quirke 

One strategy for investors in a sideways market is to buy the best and forget the rest. And Sam Quirke wrote about two best-in-class stocks that reported strong earnings this week. In the semiconductor space, Palo Alto Networks Inc. NASDAQ: PANW continues to stand head-and-shoulders above the sector...literally. As Quirke writes, PANW continues to justify a four-digit P/E ratio which supports the fact that analysts still love the outlook for the stock. And of course, we would be remiss if we didn’t cover the stock of the week, Nvidia NASDAQ: NVDA. The stock rocketed higher and burned a lot of short sellers after an earnings report that demonstrated the company’s positioning as the tip of the spear in AI. And Quirke was also helping investors interpret the strong earnings report delivered by Zoom Communications Inc. NASDAQ: ZM. The stock has been in a downtrend since its lofty heights in 2020 and 2021. But this report may put in a bottom and could signal the beginning of a rally.  

Articles by Chris Markoch 

The solar sector continues to offer investors a long-term growth opportunity. This week Chris Markoch was writing about how that opportunity is shaping up for Canadian Solar Inc. NYSE: CSIQ. On the heels of a strong earnings report, the company stands to benefit from the U.S. Inflation Reduction Act as well as from a 30% tax credit passed by the Canadian government. The future is not looking as bright, however, for Boot Barn Holdings, Inc. NASDAQ: BOOT. After a multi-year run, the western wear retailer is facing headwinds as consumer spending on discretionary purchases fades.  

Articles by Kate Stalter  

Believe it or not, we’re almost halfway through 2023. And that means now may be the time for investors to make adjustments to their portfolios. This week Kate Stalter made a case for dividend-paying stocks. These stocks are generally the domain of income-oriented investors. In a sideways market, however, dividend stocks can boost your total return when you reinvest your dividends. And as you think about rebalancing your portfolio, you may want to reconsider the energy sector. As Stalter writes, it’s gone from among the best to among the worst-performing sectors, but that could be changing. If it is, Stalter lists two mid-cap energy stocks that are expected to deliver strong earnings growth. And if you’ve got more of a speculative taste, you can consider looking at small-cap stocks. Stalter points out a study that shows small-cap stocks tend to outperform the market at the end of a rate hiking cycle. With the Fed still likely to pause hikes in June, now may be the time to diversify by adding some small-cap names.   

Articles by MarketBeat Staff 

Proving that great minds think alike, the MarketBeat staff was looking at two of the themes that Kate Stalter focused on. The staff was on the hunt for mid-cap stocks as well. In this case, they looked for mid-cap stocks trading for under $10 in the technology sector and came up with two attractive options for investors to consider. They also were looking at three of the NASDAQ’s highest dividend payers. While this can be an imperfect measure, a strong dividend history is usually a sign of future dividend payments. The stafff was also looking at one of the year’s best performing stocks in Royal Caribbean Group NYSE: RCL. This is a comeback story that was expected, and as the staff writes there are reasons to believe RCL stock may still have room to float higher.