The 4 key things we’re watching in the stock market this holiday-shortened week

The Nasdaq Composite inched higher Friday to claim its fifth straight record close, as new data this past week showed a continued cooling of inflation and Treasury yields retreated. For the week: The tech-heavy Nasdaq gained 3.2%, while the S & P 500 rose 1.6% and the Dow Jones Industrial Average fell 0.5%. Economic updates helped drive the gains. First, the May consumer price index (CPI) on Wednesday came in weaker than expected, holding flat from April’s reading. Economists had expected a 0.1% gain. One day later, the producer price index (PPI) declined 0.2% for the month against expectations for an increase of 0.1%. (The CPI measures the prices for a basket of goods and services across the U.S. economy, while the PPI is a gauge of prices that producers get for their goods and services in the market.) Both releases were welcomed by investors. They showed the Federal Reserve’s two-year plan of raising and holding interest rates at elevated levels to bring down inflation continues to work. The hope is that as prices come down, the central bank will begin to cut rates again. Fed Chairman Jerome Powell noted that progress to reporters after the FOMC decision on Wednesday to leave rates unchanged. However, he said more data was needed before cutting. He did indicate that one cut would likely to be appropriate before the end of the year. The market appears to disagree. As of Friday, the CME FedWatch Tool was putting the greatest odds on two cuts this year — the first in September and another in December. Among the S & P 500 sectors, information technology was the big winner of the week, advancing nearly 6% on the back of big moves from Club names Apple and Broadcom as well as Oracle and Adobe . Also helping was the 8.5% rally in portfolio heavyweight Nvidia following its 10-for-1 stock split on Monday. On the other hand, the energy sector was the biggest loser, followed by financials and industrials . Within the Club this week, we heard from Broadcom , which reported strong quarterly results and announced its own 10-for-1 stock split. No portfolio companies report earnings in the week ahead. For the first quarter, technology was the big winner as 89% of the sector’s companies reported earnings that were ahead of expectations. That’s followed by health care with 88% and consumer staples with 84%, according to FactSet. On the revenue side, real estate was tops, with 74% of companies reporting positive revenue surprises, followed by technology at 71% and health care at 69%. Here’s what’s on our radar for the week ahead — noting that the U.S. markets are closed Wednesday in observance of Juneteenth. Retail sales. Results for May hit Tuesday and should shed some light on the resilient consumer. Where are people spending? What are they pulling back on? Investors are looking for a 0.3% overall monthly gain, according to FactSet. Industrial production and capacity utilization. This will show how well manufacturing, mining and the electric and gas utilities are doing. Per FactSet, economists are expecting industrial production to increase 0.3% month-over-month with capacity utilization at 78.6%, up slightly versus the prior month. Housing. May housing starts and existing home sales dominate the end of the week. The cost of shelter has been a major source of upward pressure on inflation, so any signs of relief will be very welcome by Wall Street. Earnings . While no portfolio companies are reporting, two to keep an eye on are Lennar on Monday and Darden Restaurants on Thursday. Lennar is one of the largest homebuilders in the U.S., so we can use this release to indirectly provide further clues to the forward path of inflation. Ideally, we want to see that more supply is on the way as that will be key to easing price inflation — key to Fed rate cuts later this year. Darden Restaurants, the operator behind Olive Garden, Longhorn Steakhouse, Yard House and more, will give us another view of consumer spending. Monday, June 17 After the bell: Lennar (LEN), La-Z-Boy (LZB) Tuesday, June 18 8:30 a.m. ET: Retail Sales 9:15 a.m. ET: Industrial Production & Capacity Utilization Before the bell: Americas CarMart (CRMT) After the bell: KB Home (KBH) Wednesday, June 19 The U.S. stock markets are closed in observance of Juneteenth. Thursday, June 20 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Housing Starts Before the bell: Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), Jabil (JBL) After the bell: Smith & Wesson (SWBI) Friday, June 21 10:00 a.m. ET: Existing Home Sales Before the bell: CarMax (KMX), FactSet (FDS) (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.

A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 31, 2024. 

Brendan McDermid | Reuters

The Nasdaq Composite inched higher Friday to claim its fifth straight record close, as new data this past week showed a continued cooling of inflation and Treasury yields retreated.

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