MarketBeat Week in Review – 6/19 - 6/23

Key Points

• Markets trended lower in a shortened trading week. 
• Remarks from Fed Chair Powell continue to fuel thoughts that at least one, if not two, interest rate hikes are on tap this year.  
• The end of a month and a quarter is causing many institutional investors to rebalance their portfolios; expect more choppiness ahead.   
• Next week’s PCE reading is likely to set the short-term tone for the markets.  
• Here are some of the most popular articles from this week.  

Markets pulled back this week, but the reason for the price action may not be clear. Some investors will point to remarks from Fed chair Jerome Powell who continued his “hawkish pause” language in remarks to Congress this week. Powell continues to say one or two more rate hikes may be needed this year to keep inflation at bay.  

On the other hand, we’re nearing the end of a month and a quarter. That means that institutional investors are rebalancing their portfolios to set up for the remainder of the year. As the saying goes, nobody got broke taking a profit, and that may explain some of what’s happening. If so, expect more choppiness next week.  

And what is that second half looking like? The markets are continuing in the range-bound pattern that investors have been dealing with for most of the year. The larger question is if 4,300 will act as the new support level for the S&P 500.  

Investors may get their answer next week with the latest reading on the Personal Consumption Expenditure (PCE) price index. This is the Federal Reserve’s preferred measure of inflation. If the number comes in hotter than expected, it will likely confirm that more interest rate hikes are coming.  

The MarketBeat team will be looking at those stories and putting them into context in their market analysis. In the meantime, here are some of the most popular articles from this week.  

Articles by Jea Yu 

This week, Jea Yu helped investors understand the Relative Strength Index (RSI). The RSI is a common indicator used in technical analysis. But it’s something that all investors can refer to for a quick reading on a stock’s momentum.

As Yu notes, this indicator can help investors understand when a price action reversal is more likely to take place. One stock showing a lot of positive momentum at the moment is PepsiCo, Inc. NASDAQ: PEP.

As MarketBeat followers know, many of our analysts are bullish on PEP stock, and Yu lays out the bullish case as the stock is back in the buy range after profit taking. Yu was also writing about why this could be the summer of Barbie. And if that’s the case, why now may be a good time to add some Mattel, Inc. NYSE: MAT stock to your portfolio.  

Articles by Thomas Hughes 

We’re almost halfway through 2023, and that means the second quarter earnings season is almost upon us. Thomas Hughes wrote about two stocks that are getting the most upgrades from analysts heading into the second quarter. Hughes was also writing about Amazon.com, Inc. NASDAQ: AMZN and why the company’s bid for iRobot is just one way that it’s staking out a place in the AI race.

Two of the stocks moving the markets this week were FedEx Co. NYSE: FDX and KB Home NYSE: KBH. But as Hughes notes, the outlook for both stocks contains a lot of risks. The report from FedEx contained many of the cautionary notes investors heard from United Parcel Service, Inc. NYSE: UPS earlier this reporting season. And for KB Home, the strong quarter comes with a decrease in its backlog which is a bearish signal for the company’s growth in upcoming quarters.  

Articles by Sam Quirke 

It's a difficult time to be investing in Chinese stocks. But as Sam Quirke points out, this is still a time when you can still buy the best. That means looking at Baidu, Inc. NASDAQ: BIDU. The company is the Chinese answer to Alphabet NASDAQ: GOOGL and has some strong fundamentals that investors should be aware of. Turning back to the United States, Quirke was explaining why AutoZone Inc. NYSE: AZO may soon be a $3,000 stock. This is a question where analysts are looking beyond the company’s disappointing earnings report, which will set the stage for AZO stock to move higher. And if you didn’t check out Quirke’s article about Broadcom Inc. NASDAQ: AVGO you can give it a read here. The company recently hit a new all-time high, but Quirke explains why it still has room to run. 

Articles by Kate Stalter  

Kate Stalter had her eyes focused on several areas of the economy that may provide some clues for investors as we head into the second half of the year. For example, recent reports show that revenge travel shows no signs of slowing. Airfare is one area where inflation remains sticky. That makes it a good time to look at airline stocks, and Stalter makes the case for why investors should consider United Airlines Holdings, Inc. NASDAQ: UAL as the stock is consolidating and may be ready to soar.

But while American consumers may be buying more services than stuff, the recent performance of MercadoLibre NASDAQ: MELI shows that the same may not be true in Argentina. The e-commerce giant is outperforming other e-commerce giants such as Amazon and Alibaba Group Holding Ltd. NYSE: BABA and it’s not particularly close. On a more cautionary note, data shows that consumers are funding their spending with credit. But as Stalter notes, that could be an opportunity for a company like Discover Financial Services NYSE: DFS which is outperforming many of its rivals and has a technical setup that may push it higher. 

Articles by Ryan Hasson 

This week Ryan Hasson was addressing an issue that we all face as investors. That is, how do we take our emotions out of our trading decisions. This is particularly true for active traders. If you find yourself struggling with this, you should read Hasson’s article that gives you actionable tips for putting discipline into your trading decisions. You’ll thank yourself for it. Hasson was also pointing MarketBeat readers to a shift that may be taking place in the industrials sector. One way to play this may be to buy the Industrial Select Sector SPDR Fund NYSE: XLI which recently pushed past a couple of key resistance levels.  

Articles by Gabriel Osorio-Mazilli 

Earlier this week, Logitech International NASDAQ: LOGI CEO Bracken Darrell announced he was leaving the company to take the same position for V.F. (NYSE: VFC). The move is interesting since the companies operate in two disparate sectors. Gabriel Osorio-Mazilli was all over this and guides investors as to whether it’s time to buy or sell this news.  And although investors have heard it before, Osorio-Mazilli was raising a familiar question.

That is, is now a good time to buy PayPal Holdings, Inc. NASDAQ: PYPL? His answer is yes, because after dropping more than 80% from its all-time high there is a fundamental disparity between the price and the value of the stock. Another stock that may be oversold is 3M NYSE: MMM. The company’s stock is being weighed down by two lawsuits that could result in tens of billions of dollars in damages being paid by the company. The key for many investors will be the status of the dividend king’s dividend which Osorio-Mazilli points out may be in jeopardy.  

Articles by MarketBeat Staff 

Electric vehicles are getting a lot of attention. But the MarketBeat staff suggests that investors should look at the opportunity that exists in electric aviation. And if you’re interested in that sector, Joby Aviation, Inc. NYSE: JOBY is one to keep in mind. The company makes all-electric aircraft that can fly up to 150 miles. Could it be the Tesla, Inc. NASDAQ: TSLA of planes? It’s too early to tell. But trading for under $10 a share, it’s an intriguing stock for your watchlist. In light of the tragedy involving the Titan sub this week, news that Virgin Galactic Holdings, Inc. NYSE: SPCE is launching a new commercial spaceflight service may seem a bit ill-timed.

In fairness, the company made the announcement prior to the Titan tragedy, but it will remain to be seen how SPCE stock fares. And with investors looking for growth, the staff suggests letting your stomach be your guide. Restaurant stocks have been outperforming the market as consumers are returning to their favorite haunts. And the staff offers two restaurant stocks that can give you a better return than a 10-year Treasury bill.