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Stocks posted another round of mixed results on Tuesday. The Nasdaq and S&P 500 rebounded, while the Dow and Russ2K edged lower.
Dow [-0.6%]
S&P 500 [+0.3%]
Nasdaq [+1.2%]
Russell 2K [-0.4%]
Index futures are hovering close to flat in early trading. S&P 500 contracts are currently sitting even.
Today’s economic schedule is pretty light, so I’m keeping my attention on today’s earnings reports. This morning, we’ll hear from Paychex, General Mills, and UniFirst. After the close, Micron, Levi Strauss, and others will also report. These reports may have little affect on the market’s overall direction today, but they could nonetheless provide valuable insights. Stagnant Mortgage Rates and Demand Point to Slow Summer Housing Market 🏠 After a lackluster spring, the summer housing market shows no signs of improvement. High home prices continue to climb, mortgage rates remain elevated, and consumers are not swayed by a modest increase in home listings. This situation is mirrored in the stagnant weekly mortgage demand. Applications Down 📊
Total mortgage application volume was essentially flat last week, increasing just 0.8% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) slightly decreased to 6.93% from 6.94%, marking the lowest rate in over three months. | More Data 📉
Applications to refinance a home loan remained unchanged from the previous week but were 26% higher than the same week last year. However, most homeowners still hold mortgages with significantly lower rates, making them less inclined to refinance. Applications for mortgages to purchase a home increased by 1% for the week but were down 13% from the same week last year. Despite an 18% increase in total housing supply from a year ago, the market remains lean. | Government Loans 📈
Joel Kan, an MBA economist, noted that purchase applications saw a small increase after adjusting for the Juneteenth holiday. Government purchase loans, primarily FHA and VA, saw gains of more than 2% over the previous week as homebuyers in these segments sought to take advantage of recent rate relief. | Future Outlook 📅
Mortgage rates started this week moving sideways and are expected to stay that way until Friday, when key reports on consumer spending and personal consumption prices are released. These reports could impact bond yields and, consequently, mortgage rates, depending on the inflation data they reveal. |
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Rivian [RIVN] - Last Close: $11.96 | Rivian is surging on news that Volkswagen has made a $5 billion “vote of confidence” investment in the company. | The companies say the funds will help them scale production in a slowing electric vehicle market. | Rivian will also use the capital to develop its less expensive and smaller R2 SUVs and its planned R3 crossovers, according to CEO RJ Scaringe. | RIVN is up 39.5% on roughly 7 million shares traded. | My Take: RIVN still has plenty of headwinds to overcome, but the money will significantly extend the struggling EV-maker’s runway. |
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| Volcon [VLCN] - Last Close: $3.88 | The short squeeze continues in shares of Volcon, which are still trending higher after rallying 43% on Tuesday. | There has been no company-specific news to explain the sudden move, but Fidelity lists VLCN with a short percentage of 591.82% as of May 31st, 2024. | This morning, VLCN is up 41.1% on more than 1.5 million shares traded so far. | My Take: Like I said yesterday, VLCN could see more gains from this rally, but I also think we’ll see a sudden sell-off when it’s all said and done, so prepare accordingly if you’re in this trade. |
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| ANEW Medical [WENA] - Last Close: $1.65 | European regulators have granted ANEW Medical a patent for its Klotho gene sequencing & delivery system as a treatment for neurodegenerative diseases. | The product’s key intellectual property asset is covered under an exclusive worldwide license deal with a Spanish university based in Barcelona. | ANEW Medical said it also has patent approval in China and Hong Kong, and it expects to expand further into Asian markets this year. | WENA is up 75.7% on over 7 million shares traded. | My Take: WENA experienced a steep sell-off last Friday, so that may explain why this rally seems a bit exaggerated. |
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| Savara [SVRA] - Last Close: $3.80 | A Phase 3 IMPALA-2 trial of Molgramostim in adult patients with a rare type of lung disease met its primary endpoint, Savara announced this morning. | The trial assessed the drug in patients with autoimmune pulmonary alveolar proteinosis, and it showed statistically significant improvements vs placebo. | The drug was also well tolerated and 97% of patients completed the trial with no drug related adverse events. | SVRA is up 30.2% on just over 3.5 million shares traded. | My Take: SVRA is coming off a brutal downtrend, but this catalyst could help it reverse course and recapture its previous highs. |
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Gainers
Syntec Optics [OPTX] >> +180%
China Natural Resources [CHNR] >> +30.3%
Canterbury Park [CPHC] >> +23.5%
Decliners
GRI Bio [GRI] >> (30.6%)
NextTrip [NTRP] >> (24.6%)
Sypris [SYPR] >> (16.1%) Paychex [PAYX] ... AM
General Mills [GIS] ... AM
UniFirst [UNF] .. AM
Micron Technology [MU] ... PM
Levi Strauss & Co [LEVI] ... PM
AeroVironment [AVAV] ... PM
H.B. Fuller Company [FUL] ... PM
Concentrix [CNXC] ... PM
MillerKnoll [MLKN] ... PM
Worthington Steel [WS] ... PM - New home sales [May] ... 10:00a
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