MarketBeat Week in Review – 5/29 - 6/2

Key Points

• The markets rallied sharply to close the week as investors cheered a resolution to the debt ceiling stalemate. 
• For now, bullish sentiment is outweighing a jobs report with a headline number that was hotter than expected. 
• The S&P 500 is approaching the 4,300 level that has provided stiff resistance for the past year. 
• Next up for investors is the Federal Reserve’s decision on interest rates which will be announced June 14; before that, investors will get the latest reads on inflation from the May CPI and PPI indexes.     
• Here are some of the most popular articles from this week.  

The markets ended the week with a sharp rally. Investors cheered an end to the debt ceiling stalemate. That enthusiasm overshadowed a mixed jobs report in which the headline was hotter than expected. However, some fodder for the bulls was also related to the unemployment rate and wage growth. 

The S&P 500 now approaches the 4,300 level that has provided stiff resistance this year. If stocks push past this level meaningfully, the narrative for equities may change. But for that to happen, the Fed would have to pause on interest rate hikes. That means investors should expect more volatility until the Fed decides on interest rates following their meeting on June 14. That’s also the week investors will get the latest CPI and PPI Index readings. 

Next week will be quieter for markets as earnings season winds down. But the MarketBeat team will stay on top of investment ideas that can help you become a more successful trader or investor. Here are some of the most popular articles from this week and a precursor to the best summer stocks.  

Articles by Jea Yu 

Artificial intelligence (AI) has reached mania stage. Investors are on the hunt for the next big thing or hidden gem. Jea Yu offers up UiPath Inc. NASDAQ: PATH as a company that may offer a little of both. This leader in AI-powered automation recently beat on the top and bottom lines and, more importantly, raised its full-year guidance. With a market cap of just over $10 billion and a share price under $20, PATH may be one to watch. 

Yu was also looking at the earnings report from Airbnb Inc. NASDAQ: ABNB. The digital lodging platform lowered its full-year guidance, which suggests travel demand may be normalizing. With student debt payments scheduled to restart, investors may look back and see this report as a turning point. The impact of the end of the student loan moratorium seems bullish for SoFi Technologies Inc. NASDAQ: SOFI, but tell that to the analysts. 

Yu writes that SoFi investors are trying to make sense of the fintech company receiving two downgrades in a month, with the latest offering a price target of $2.50. 

Articles by Thomas Hughes 

With earnings season winding down, Thomas Hughes looked back and found that, not surprisingly, AI stocks were among the most upgraded stocks. 

Analyst sentiment often front-runs price targets, so investors may still be able to take a position in these stocks. Chewy.com NASDAQ: CHWY may soon get analyst upgrades. The company delivered a strong earnings report that shows it continues to dominate the online pet care sector. Analysts are taking notice, so if you can stomach some near-term volatility, CHWY stock may be an attractive play no matter what happens in the economy. 

Hughes also had a stock pick for income investors. HP Inc. NYSE: HPQ is a dull stock undergoing a cyclical rough patch. But as Hughes notes, that shouldn’t affect the company’s cash flow and dividend, which is why it’s still a good value for income-oriented investors. 

Articles by Chris Markoch 

No investment strategy is foolproof. However, finding stocks trading near their 52-week lows can present opportunities for investors. This week, Chris Markoch looked at three stocks trading near 52-week lows but still offering the short-term gains and maybe more. 

Markoch also wrote about Canada Goose Holdings Inc. NYSE: GOOS. The outerwear retailer reported strong earnings and issued upbeat guidance. But that’s not enough for analysts who have sent GOOS stock down nearly 20% on forecasted weakness in the United States. 

Articles by Kate Stalter  

To say the MarketBeat analysts are laser-focused on AI stocks would be an understatement. This week, Kate Stalter looked at a trio of under-the-radar stocks that offer different ways to invest in the AI revolution. Symbotic Inc. NASDAQ: SYM provides robotics and technology to improve efficiency for retailers and wholesalers in the United States. Significantly, it’s one of the many SPAC stocks that went public recently. However, as Stalter writes, the company just announced a partnership with Associated Food Stores that may continue to lift the stock, which has already climbed over 176% in 2023. 

Stalter also wrote about the outlook for Cadence Design Systems NASDAQ: CDNS, which offers investors a picks-and-shovel approach to AI by designing and developing integrated circuits and electronic devices. And another stock that has investors singing is Opera Ltd. NASDAQ: OPRA which recently launched a web browser with built-in generative AI capabilities that targets emerging markets. 

Articles by MarketBeat Staff 

Earnings season is ending, but before you finalize those summer vacation plans, the MarketBeat staff offers some swing trade ideas for three mid-cap stocks that have yet to report. If you followed our guidance to position May before the quieter summer months, your strategy might include riding some hot hands from the first five months of the year. Our staff provides the outlook for three of the Dow’s top-performing stocks in 2023. Conversely, American Eagle Outfitters Inc. NYSE: AEO is among Dow’s biggest losers. AEO stock is down over 70% this year, and investors don’t know whether to buy the dip or let the falling knife drop further. The company beat on the top and bottom line but offered soft guidance. In a year when all retail stocks are under scrutiny, investors must be cautious.