Investing Club: The week in review, the week ahead — May 27, 2022

Published Fri, May 27 20224:58 PM EDT

Stocks snapped a multi-week losing streak Friday, with all three major averages closing higher. The rally was buoyed by the release of FOMC May minutes on Wednesday, which some interpreted as the Fed's willingness to pause interest-rate hikes once the neutral rate is achieved. While time will tell and the Fed remains data dependent, the outlook for future rate increases did pull back slightly following the release. Another positive boost for the market came Friday with the April personal spending report indicating a deceleration in the pace of inflation. Whether the Fed ultimately pauses or not does not impact our investing strategy. We continue to high-grade our portfolio by adding shares of high-quality companies that make stuff and do things for a profit, return cash to shareholders through dividends and buybacks, and trade at reasonable valuations. We will fund those buys with sales of stocks that no longer fit that profile, even if that means taking some painful losses to do so. Under the hood this week, all sectors closed in the green with consumer discretionary leading the way, followed by energy, technology and financials. Meanwhile, the U.S. dollar index pulled back slightly to around the 101.7 level. Gold is holding in the mid-$1,800s region. WTI crude prices stand at around $115 per barrel. The yield on the 10-year Treasury pulled back to the 2.74% level. Here's a quick look at our Club trades from this past week: Looking back Within the portfolio this past week, we received earnings results from Nvidia (NVDA), Costco (COST) and Marvell Technology (MRVL). On the macroeconomic front: We learned on Tuesday that new home sales fell 16.6% monthly and 26.9% annually in April to a seasonally adjusted annualized rate 591,000 units — well below the 750,000 rate analysts were expecting. On Wednesday, durable goods orders were indicated to have risen 0.4% monthly in April, missing expectations for a 0.6% advance. On Thursday, initial claims for the week ending May 21 came in at 210,000, better than expectations of 215,000, while gross domestic product (second estimate) was shown to have declined at a 1.5% annual pace in the first quarter, missing estimates for a 1.3% decline. It was also a downward revision from the 1.4% decline reported in the advance estimate. Also Thursday, pending home sales were show to have declined 4% monthly and just over 9% annually in April. Finally, on Friday, personal spending was reported to be up 6.3% annually, a tick above the 6.2% rate expected. More importantly, the core personal consumption expenditures price index was shown to have advanced 4.9% in April versus a year ago, in line with expectations and a deceleration from the 5.2% rate recorded in March – giving the market some hope that we have seen inflation peak. What's ahead Next week, the only Club stock reporting earnings is Salesforce (CRM) on Tuesday after the closing the bell. Here are some other earnings reports and economic numbers to watch in the week ahead: Tuesday, May 31 Before the bell: KE Holdings After the bell: HP Inc (HPQ), Victoria's Secret (VSCO), Digital Turbine (APPS), Sportsman's Warehouse (SPWH), Ambarella (AMBA) Wednesday, June 1 Before the bell: Capri Holdings (CPRI), Donaldson (DCI) After the bell: C3.ai (AI), Chewy (CHWY), Descartes (DSGX), Elastic (ESTC), GameStop (GME), Hewlett (Packard (HPE), MongoDB (MDB), nCino (NCNO), NetApp (NTAP), Pure Storage (PSTG), Semtech (SMTC), SentinelOne (S), UiPath (PATH), Veeva Systems (VEEV) 10:00 a.m. ET: ISM Manufacturing 2:00 p.m. EST: Fed Beige Book Thursday, June 2 Before the bell: Hormel Foods (HRL), SpartanNash (SPTN), Toro (TTC), Ciena (CAE), Designer Brands (DBI), SecureWorks (SCWX) After the bell: Broadcom (AVGO), lululemon (LULU), Cooper (COO), JOANN (JOAN), CrowdStrike (CRWD), Okta (OKTA), Calavo Growers (CVGW), Zumiez (ZUMZ), Asana (ASAN), PagerDuty (PD), Phreesia (PHR) 8:15 a.m. EST: ADP Employment 8:30 a.m. EST: Initial Claims 10:00 a.m. ET: Factory Orders Friday, June 3 8:30 a.m. EST: Nonfarm Payrolls 10:00 a.m. EST: ISM Non-Manufacturing (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jerome Powell, chairman of the U.S. Federal Reserve, pauses during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, D.C., on Wednesday, May 4, 2022.

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