👉 The Investing Week Ahead: New S&P 500 Members

Thanks so much to the 10s of thousands of you that listen to Rich Habits each week. Below is a link to this morning’s episode — which is all about to find an extra few thousand dollars per year in your budget to begin investing. This episode is especially helpful if you’re someone who’s living paycheck to paycheck.

What We’re Watching:

Nike’s most recent earnings report (in March) left investors feeling empty. Holiday sales (from the end of 2023) beat expectations, but sales in China continued to slow. Restructuring across the company was announced, which is expected to cut costs by ~$2B — but that wasn’t enough to keep Nike’s stock from remaining in a downtrend YTD.

Analysts will be looking to hear more updates about the company’s restructuring, international growth, and the epic growth catalyst of the Paris Olympic Games.

Micron’s most recent earnings report (in March) led to an immediate +14% surge due to excitement around their place in the AI landscape. They announced quarterly revenue of $5.82B (up from $3.69B a year before), as well as net income of $793M (up from a -$2.3B loss a year before).

Micron CEO Sanjay Mehrotra believes that his company is “one of the biggest beneficiaries in the semiconductor industry of the multi-year opportunity enabled by AI.” To make things easier to understand — Nvidia makes graphics processing units (GPUs) that run AI, while Micron provides memory and flash storage for computers, data centers, and phones.

Analysts continue to be eager to hear how Micron acts as a compliment to Nvidia, AMD, and other chip makers.

Financial details of the deal were not disclosed, and revenue from Target Plus is combined with other revenue streams, totaling $388 million, less than 2% of Target's recent quarterly revenue.

This partnership is part of Target's broader strategy to recover from declining sales — aiming for flat to 2% growth in comparable sales this year.

When new companies enter the “S&P Squad” — sadly some fellas need to walk out the door. The companies above replaced Robert Half (RHI), Comerica (CMA), and Illumina (ILMN).

Additionally, Hertz (HTZ) has moved from the S&P MidCap 400 to the S&P SmallCap 600 as it launched a $1 billion bond deal to strengthen its financial position.

What We’re Watching:

The first chart (above) shows the second estimate for Q1’24 GDP, while the second chart (below) breaks down the GDP’s influences by category.

Remember — major economic releases of this nature have estimates, then revisions, then a final number that’s used for historical tracking.

The current tale of the tape for Q1’s GDP is not so pretty. GDP growth of +1.3% is the lowest reading in two years and is well below the initial estimate of +1.6%.

Anything less than +2% growth is not something that economists want to see! If this GDP’s revision leads to yet another decrease in Q1’24 productivity — the market may take it a lot more seriously.

The most recent Core PCE reading — which is the Fed’s preferred inflation gauge — rose by +0.2%. Economists are now expecting an even slower rise of +0.1% for the next reading.

“We don’t think the slower inflation print will be enough to convince officials by the time of the July FOMC meeting that inflation is on a firm trajectory down to the Fed’s 2% target.” 

— Bloomberg Economics