Don’t be surprised if there’s not a lot of upside for stocks between now and the next Fed meeting on June 14. The S&P 500 has come a long way to challenge its 52-week highs, a little breather makes sense. And if the market decides to pull back, it doesn’t mean that this rally was all BS hype. Use weakness to add quality stocks.
Consumer sentiment is terrible, one article said. Market breadth is much too narrow, another article said. Inflation is too stubborn and rates are headed higher, bond yields are precarious, banks are still in danger of failing, earnings aren’t rebounding, manufacturing surveys are weak, consumer credit is too high and delinquencies are spiking – they droned on and on with “proof” that there’s just no way there could actually be a new bull market in the works…
Both of the AI stocks I’ve recommended, C3.ai (NASDAQ: AI) and Schrodinger (NASDAQ: SDGR) are looking good. C3.ai is flying today after it pre-announced a better than expected quarter. The stock was crushed 6 weeks ago by a hatchet job from short seller Hindenburg Research. But shares found support at the 200-day moving average. And this quarterly earnings report should help convince investors that the Hindenburg short report was a bunch of hooey.
Pepsi’s Frito-lay division reported a 16% gain in revenue even though sales volume was flat from the year before. It would be interesting if I could tell you that the revenue gain came from some startling Artificial Intelligence application that boosted margins for Dorito’s. But there was another kind of AI at work – artificial inflation.