Shorting more (GRNY) at $27.59.

Position: Short GRNY (M)

 * I call B.S. to the broadening (and healthy) market thesis...

Lesson # 7 Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names…

– Bob Farrell, “10 Investing Lessons”

On CNBC, a perma-bullish technician (Ryan Dietrich) just suggested that today was another day in which the advance in equities is healthy and broad.  

I call B.S.

This chart exemplifies the narrowness of the markets (with only one of 11 S&P groups showing better than average strength): 

For now I wouldn’t even look for a broadening of this market and I would not suggest buying any of the battered sectors (like consumer staples or consumer discretionary).

Investors are narrowly focused on large-cap technology.

If I wanted to diversify, I would purchase short-term treasuries.

Position: None

What happens next, after the decline of tokenmaxxing?

Position: None

No trades today except for the index shorts and a small profitable sojourn into a speculative basket.

Position: None

– NYSE volume 8% above its one-month average; 
– Nasdaq volume 23% above its one-month average; 
– VIX index:  down 0.25% to 15.70

Positions: None.

Positions: None.

I have moved to large short the indexes:

* (SPY)  $757.76

* (QQQ) $740.89

Positions: Short SPY L QQQ L

I covered my speculative stock package of shorts for a small profit:

* (AMD) $516.69

* (MU) $955.57

* (SNDK) $1,666.17

Positions: None.

From Peter Boockvar:

Still the most hated group/Sauna & massage chair sales jump/Dell’s robust biz but pull forwards & price rises too

I posed this, mostly rhetorically, last month and asked if there was a more hated group in the stock market than consumer staples companies. I believe that remains the case and we remain long a bunch of names on the belief that they will be a beneficiary to a reopening of the Strait with lower gasoline prices, relief on packaging/plastic/aluminum can costs along with very cheap valuations, generous dividends, some with insider buying, a renewed focus on the realities of the changes going on with the dining shift to health/wellness and protein, GLP-1s, and a shift to product rationalization and product/marketing investments. Also, if the cost of eating at home continues to be cheaper than eating out, food companies should benefit. We’re long Kraft Heinz (1 analyst out of 22 have it as a buy), Conagra (1 buy out of 18), Nestle (11 buys out of 25), Reynolds Consumer Products (2 buys out of 7), Pepsi (11 buys out of 26), Coke (22 buys out of 27), Campell’s (1 buy out of 21) and Kimberly Clark (5 buys out of 17). These stocks have been absolute disasters (outside of Coca Cola) over the past few years but I believe showing some signs of life technically speaking and operationally most importantly.

I understand that the business of selling ketchup, cream cheese, diapers, tissues, oatmeal, coffee, beef jerky and tin foil, to name some of their products, is just not nearly as exciting of being in the high tech business of making high bandwidth memory chips, GPUs, CPUs and data servers but I get excited when I see where these stocks are trading at.

Giving me some confidence today was the 13% rally in Hormel stock yesterday after better than expected earnings results. Their brands include Spam, Skippy, Planters, and Applegate among many others. They said this of note:

“Our top line results remained a clear area of strength as we achieved our 6th consecutive quarter of organic net sales growth…our protein centric portfolio positions us well to meet consumer and operator needs, and we continue to see that advantage translate into marketplace performance during the second quarter.”

“While consumers are under pressure and sentiment is low, food has remained resilient in recent months, particularly with growth in protein, where our portfolio is well positioned. Consumers and operators are prioritizing products that deliver clear value. Whether it’s convenient kitchen shortcuts, substantial snacking solutions, or affordable protein options, we are focused on helping consumers and operators make protein work better for them.”

“Based on how the year is progressing and the underlying momentum of the business, we believe we are trending toward the upper half of our earnings range. However, we think that maintaining our current outlook is the right approach at this stage of the year and appropriately reflects near-term dynamics.”

They are dealing with “near term cost pressures, including certain commodity inputs and higher logistics expenses, as well as actions to rebalance some inventory levels.”

From Dollar Tree that had a big day yesterday, rising 18%:

With the huge customer focus on value, “approximately 85% of our sales mix remains at $2 and below.”

Not surprisingly, “Customers are shopping thoughtfully and closer to need with a continued focus on affordability, convenience and trip efficiency. Customers value the ability to shop nearby and quickly to stretch their budgets through smaller and more affordable pack sizes and to still find a compelling assortment and discovery throughout the store.”

“On the macro, sure, customers are under pressure from higher fuel prices, but that also makes them more value focused…In Q1, customers saw higher gas prices for sure, but they also saw higher tax returns.”

“Our deep value and attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value focused.”

The 3.5% comp growth was mixed as traffic fell by 1%, offset by a 4.5% rise in average ticket. Ticket was “on the back of last year’s pricing actions and higher multi-price penetration.” They said they saw strength “in areas such as home décor and household consumables.”

Burlington Stores is a value based retailer but whose stock fell 8% yesterday as results didn’t meet the high expectations after Ross Stores blew away estimates last week:

Comps grew 6% and “our comp trends were broad based across businesses and geographies, with particular strength in ladies’ apparel, beauty and accessories. One particular callout was the strength of our warm weather categories.

They expect full year comps of 2-4% and remain positive on their business. “And when we look at our underlying customer data, the key indicators continue to look positive across demographics and income bands. By the way, we estimate that higher tax refunds in Q1 were worth about 1.5 to 2 points of comp. Even if you strip those out, our comp growth in Q1 was still mid single digit.”

Also, they expect tariffs “to be less disruptive to pricing and supply this year.”

And maybe why the stock traded down, “I would acknowledge that we’re perhaps a little more wary now than we were in March, based on higher gas prices and the potential impact on inflation. We’re watching the trend very closely and looking for any change in consumer behavior. We haven’t seen it yet, but as an off price retailer, that is what we do. We watch to see how the trend changes.”

From Best Buy and whose stock spiked by 16% yesterday:

Comps were up 2%, “higher than our outlook, with positive comps across the majority of our major product categories.”

“From a category perspective, we delivered stronger than expected sales performance in the gaming category across the three major consoles, Switch 2, PS5, and Xbox…We also saw strong growth in newer and emerging categories, including AI glasses, 3D printers, collectibles like trading cards, health rings, and PC gaming handhelds.” They also saw gains in mobile phones, and an improvement in home theater.”

“our sales growth increased as we progressed through the quarter, in part due to new product introductions and customers choosing to spend their higher tax refunds with us.”

On the consumer, “we see a customer who is still spending, but is value focused and attracted to sales moments. Importantly, while customers continue to be thoughtful about big ticket purchases, they are willing to spend on high price point products when they need to or when there is technology innovation.”

From Costco and whose stock is little changed this morning, still digesting its hugely rich 50x P/E and 30x EV/EBITDA multiple:

“Our gas team performed exceptionally well to manage this unprecedented demand, which requires multiple daily gas deliveries to many locations. The high consumer price sensitivity, which fueled these record volumes, also drove many members to use our gas stations for the very first time in the third quarter.”

On why the traffic picked up to their gasoline stations, outside of its cheaper price relative to competitors, “a lot members are increasing their frequency of visiting the gas station to top up in between what would have normally been a gap between getting the tank to empty because of the concern about what might the gas price be tomorrow.”

They expect to start getting tariff refunds in the next few months and “our plan is to return to our members in some form the portion of tariffs that were passed on to them.” To what extent will depend on a few factors they mentioned.

“Traffic or shopping frequency increased 2.4% worldwide. Our average transaction or ticket was up 7.3% worldwide, and 4.2% excluding gas price inflation and changes in FX.” These traffic numbers do NOT include those who just get gasoline.

“In terms of merchandising highlights…gas prices had a major impact on the quarter, with our members allocating a greater proportion of their total spend to gas. At the same time, we saw very robust comp sales results excluding gas, as our combination of merchandising quality, value, and newness continued to resonate with members.”

“Non-foods comp sales were up high single digits in Q3. Top performing departments were gold and jewelry, small electrics, tires, home furnishings, majors (bigger ticket items), and health & beauty.”

This was interesting, but I guess needed in a stressful world, “we experienced almost 50% sales growth in saunas and massage chairs during the quarter.”

“Inflation increased slightly in non-foods, and we are anticipating further inflation in a number of non-food categories as higher resin costs start to flow into cost of goods.” My bold.

“The supply chain is generally stable, and our merchants feel good about our inventory position heading into the summer.” They have small exposure to shipping issues in the Middle East.

Gap shares are down sharply pre-market and they said this:

“Overall, at the company level, the quarter was in line with our expectations. However, results at the brand level were more varied, reflecting both the different stages of their transformation and some brand specific dynamics.” Their Athleta brand continues to be a drag with better performance in Old Navy (though “coming in slightly short of our expectations”), The Gap (”standout growth”), and Banana Republic (”staying the course”).

“From what we can see today, the consumer remains resilient. And while we continue to monitor their behavior, at this time our outlook does not assume any meaningful shift over the balance of the year. The promotional environment thus far has remained rational, yet we are keeping a close watch on the extent to which companies may reinvest this year’s tariff upside into pricing actions. Fuel costs are elevated and we continue to monitor geopolitical conditions and its potential implications across the broader operating environment.”

After PayPal spoke Wednesday at the Bernstein conference and mentioned slower travel spend, mostly in Europe, Amex spoke yesterday and said travel spend was strong and delinquencies remain low with their obvious higher income earning customer:

“we’ve been pretty steady from a delinquency perspective. Same thing from a write-off perspective…The other thing I think that was concerning to some people in the first quarter was airline spending and what we were seeing there. And I could tell you, in April we had 9% airline growth. So people are on planes, they’re flying. We had record travel bookings in the first quarter. And so, we’re seeing a healthy consumer. We’re seeing a resilient consumer. And that’s been really consistent.”

The Dell numbers were just off the charts as was the guidance, and the stock spike is eye popping for such a big cap company, as they are center stage to all the money being spent on building out this GenAI infrastructure. I still wonder the extent to which companies are pulling forward their ordering ahead of price increases and/or supply issues. Dell talked about this specifically and on pricing:

“Clearly…there is a pull-in component, there’s a buy ahead. Customers want to ensure they have access to supply. They’re concerned about raising prices, and they’re acting.” Business was still robust otherwise but wanted to mention this as a factor.

“We’re repricing, it feels like, every day, and I’m sure our customers feel that pain. Unfortunately, I don’t see that changing, given the world that we’re living in today, where you have an inflationary environment, whether it’s fuel, whether it’s raw materials, whether that’s DRAM, whether that’s NAND, CPUs. We are living in an inflationary environment that is changing at a rate that obviously we’ve never seen before, and everything that we see suggests that continues. There’ll be a point where some customers, it’s enough, and they’ll wait it out, and we’re seeing that in some cases. In other cases, we’re seeing an acceleration, that notion that was called out earlier, where folks are trying to secure that supply now and over multiple years because it’s going to be more constrained.“ I bolded to highlight.

On the business, “Demand was stronger than we anticipated across all lines of businesses and geographies, with customers moving decisively to secure supply across a broad range of IT needs.”

“Our Q1 results and AI, the opportunity remains exceptionally strong, underscored by durable, broad based demand.”

“Demand continues to exceed supply with memory as the primary constraint, and we expect to exit the year with meaningful backlog.”

To some notable economic data from overseas. The May Tokyo CPI rose 1.4% y/o/y headline and 1.6% ex food and energy, both 2 tenths below expectations and again, subsidies are helping to tame the figures. Subsidies to cushion the blow of higher fuel, food and water prices and also for childcare.

Longer term JGB yields did fall in response but the 2 yr yield was up after 6 days of declines on a poor 2 yr auction and still expectations for a BoJ rate hike next month. The yen is testing the 160 level again and we’ll see if we get another round of intervention. The 10 yr inflation breakeven fell 5 bps to 2.19% which compares with the current overnight rate of just .75%.

France said its May CPI rose 2.8% y/o/y, up from 2.5% in April, though one tenth below the estimate. Spain’s CPI accelerated to 3.6% y/o/y from 3.5% as forecasted. The ECB currently has their deposit rate at just 2% so REAL rates are well negative and why they will likely raise rates next month.

In May, German unemployment unexpectedly fell by 12k people rather than rising by 10k as estimated. Their unemployment rate did fall by one tenth to 6.3%. While good to see, the Federal Employment Agency chief said “Despite a decline in unemployment, the spring upturn has not really got going this year.”

Taiwan’s economy, thanks to its chip production, grew by 14.5% y/o/y in Q1, just above the forecast of up 13.7%.

Positions: None.

Upside:

-REPL +75% (confirms resubmits RP1 BLA for advanced melanoma in combination with nivolumab)

-DELL +33% (earnings, guidance)

-PD +23% (earnings, guidance)

-ASTC +21% (momentum)

-NTAP +18% (earnings, guidance)

-QURE +17% (higher in sympathy with REPL)

-BRUN +15% (enters 36-mo GPU server rental deal with Thinking Machines Lab)

-SOFI +13% (momentum)

-HPE +11% (higher in sympathy with DELL)

-OKTA +9.3% (earnings, guidance)

-SMCI +9.0% (higher in sympathy with DELL)

-GCO +7.3% (earnings, guidance)

-TEM +6.6% (FDA approves tumor-only label expansion for Tempus xT CDx)

-HPQ +5.1% (higher in sympathy with DELL)

-IFF +3.1% (confirms to sell Food Ingredients business to CVC Capital Partners for ~$4.3B)

-MDB +3.0% (earnings, guidance)

Downside:

-GAP -15% (earnings, guidance)

-S -15% (earnings, guidance)

-AEO -12% (earnings, guidance)

-ASTS -12% (lower in sympathy with Blue Origin)

-IHRT -12% (reportedly early-stage talks over a potential sale of iHeartMedia to SiriusXM, which would create an audio giant, have stalled after the two sides were unable to come to terms)

-ESTC -8.4% (earnings, guidance)

-ADSK -6.7% (earnings, guidance)

-KRMN -6.5% (prices upsized 14M shares at $61.00/shr in secondary offering by holders)

-RDW -6.4% (profit taking)

-IOVA -6.3% (lower following REPL news)

-AMBA -4.0% (earnings, guidance)

-AGIO -3.8% (will not advance tebapivat in LR-MDS; Phase 2b trial misses predefined transfusion-independence threshold)

-PATH -2.8% (earnings, guidance)

Positions: none.

Positions: None.

Position: None.

Fed Speakers

2:00 a.m.: Fed Bank of Minneapolis President Kashkari (Voter) participates in a town hall at Korea University (Audience Q&A expected. No prepared/embargoed text. Media Q&A for reporters in attendance follows event. No livestream); 

6:30 a.m.: Fed Bank of Kansas City President Schmid (Non-Voter) speaks on “The Local and the Global in Monetary Policy” before the Reykjavik Economic Conference 2026, Reykjavik, Iceland (Embargoed text available. Audience Q&A and livestream expected); 

9:10 a.m.: Fed Vice Chair for Supervision Bowman (Voter) speaks on monetary policy before the Reykjavik Economic Conference 2026, Reykjavik, Iceland (Text available. No Q&A. No webcast); 

9:15 a.m.: Fed Bank of Philadelphia President Paulson (Voter) speaks on the economic outlook before the Chamber of Commerce Southern New Jersey, Mount Laurel, NJ (Audience Q&A expected. No media Q&A); 

12:40 p.m.: Fed Bank of San Francisco President Daly (Non-Voter) participates in panel before the 2026 Reagan National Economic Forum, Simi Valley, CA (No prepared remarks. No group media interview.

RSVP for livestream at https://rnefvirtual2026.rsvpify.com/);

May 31: 

8:30 a.m.: Federal Reserve Board Governor Christopher Waller (Voter) participates in “Stablecoins panel before the 32nd Dubrovnik Economic Conference, Orasac, Croatia (No text. Q&A from moderator and audience. Livestream athttps://www.youtube.com/@hrvatskanarodnabankacroati9475);

8:30 p.m.: Former Fed Board Governor Powell gives acceptance remarks before the John F. Kennedy Profile in Courage Award Ceremony, Boston, MA (Text available. No Q&A. Webcast at https://www.youtube.com/watch?v=trl7aatglAw)

Economic Calendar

Positions: None.

From Quoth The Raven:

The American Consumer Is Piss Broke – by Quoth the Raven

Position: None

* I am the anti Boca Biff…

I am the executor of a large estate. The estate has been probated for about two months.

The estate has a very large and concentrated equity portfolio. (NVDA represents over 40% of the account, FTAI, EQIX, IIPR and a bunch of BDCs are the major components of the estate’s stock portfolio.)

I have patiently waited to liquidate the equities.

Yesterday afternoon I liquidated the entire stock portfolio. Not one share of equities remain. Given the elevated level of stock prices I wanted zero (nada, zilch) stock exposure.

Upon settlement I plan to put the proceeds into a money market fund on Monday morning.

This is called an Estate Sale.

Post Script: I recently spoke to Boca Biff for the first time in years. More on Boca Biff’s stock trading early next week.

Position: None

Once again I have shorted a speculative basket of high-octane stocks (in premarket trading), including (but not restricted to) the following:

* AMD $523.01
* MU  $957.02
* SNDK $1682.15

Position: Short MU (VS), AMD (VS), SNDK (VS) 

The S&P Short Range Oscillator has moved to a larger overbought at 2.63% vs. 1.62%.

Position: Short SPY (M), QQQ (M)

Adding to my index shorts:

* SPY $755.63

* QQQ $735.96

Position: Short SPY (M), QQQ (M)