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“I could stand in the middle of 5th Avenue and shoot somebody, and I wouldn’t lose voters.” – Donald Trump

Morning stock market summary

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

Just kidding.  We’ll keep the political discussion to a minimum. While last night’s verdict in the Trump hush money trial made for a big news event, its impact on the market has been negligible. Futures are modestly lower in the pre-market, but that’s likely more a factor of the 16% decline in Dell (DELL). There are also several notable economic reports at 8:30, including Personal Income, Personal Spending, and the PCE Deflator. Then, at 9:45 we’ll get a read of the manufacturing sector in May with the Chicago PMI.   How these reports shake out relative to expectations will have a larger impact on the last trading day of May than last night’s verdict.

The verdict is only 15 hours old, but Trump’s odds of winning the November election have only declined modestly according to the site electionbettingodds.com.  He still holds a 50.1% to 40.9% lead over President Biden in a head-to-head matchup, but on a generic party vote, the betting markets are much closer at 52.1% to 46.9%.  These numbers are still very close, and the betting markets have about as much accuracy as Fed forecasts, so keep that in mind. However, whether you find yourself ecstatic or downtrodden over the results, there are still 158 days between now and Election Day, so find a hobby to keep yourself occupied.

Yesterday, Salesforce (CRM) had a reservation with the woodshed, and today it is DELL’s turn as the stock plunged over 15% in reaction to its earnings report after the close. At current levels, it ranks as the sixth worst one-day reaction among S&P 500 companies to earnings since earnings season started in April.

Concerning DELL itself, if the current pre-market decline holds, this will be the stock’s worst one-day reaction to earnings since May 2012.  If it declines just a little bit more during the trading day, it could go down as the worst one-day reaction to earnings for the stock in its history as a public company since 2001.

CRM’s decline exacerbated what was already a period of weakness for the stock, but shares of DELL were on fire heading into the report. The stock had doubled since late February and was trading at ‘extreme’ overbought levels, so expectations were lofty, to say the least.  Even after today’s decline, it is still well above its 50 and 200-day moving averages and is only back to levels it was trading at last week.

To continue reading the rest of today’s morning note, where you’ll find much more analysis of global equities and economic readings released this morning, read today’s full Morning Lineup with a two-week Bespoke Premium trial.

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