We're Adding to 3 Positions After the CPI and Retail Sales Reports
The market will view these reports as supporting eventual rate cuts, driving stocks higher especially as the 10-Year Treasury yield trades off.
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* We are adding to Labcorp, Microsoft and The Trade Desk following the April CPI and Retail Sales reports.
* The combination of those two reports are positive data points for eventual Fed rate cuts and are lifting stocks.
| Symbol | Transaction Type | #Shares Traded | Recent Price ($) | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
LH | Buy | 150 | 212 | 610 | 3.0 |
MSFT | Buy | 52 | 417.50 | 377 | 3.65 |
TTD | Buy | 353 | 89 | 1,453 | 3.0 |
After you receive this Alert, the portfolio will make the following trades:
-- Buy 150 shares of Labcorp LH at or near $212. Following the trade, LH shares will account for roughly 3.00% of the portfolio.
-- Buy 52 shares of Microsoft (MSFT) at or near $417.50. Following the trade, MSFT shares will account for roughly 3.65% of the portfolio.
-- Buy 353 shares of Trade Desk (TTD) at or near $89. Following the trade, TTD shares will account for roughly 3.0% of the portfolio.
Following the back-to-back April reports for the Consumer Price Index (CPI) and Retail Sales, we are upping the portfolio’s positions in three names. The April CPI data confirmed the expected improvement in both headline and core inflation metrics the market was looking for, but the Retail Sales data showed consumers dialed back their spending in April even more than expected. While some may point to the timing of the Easter holiday this year on March 31 vs. April 9 last year as having an impact, the trends in the three-month moving average point to slower-than-expected spending.
That will have a downward impact on current quarter GDP expectations. Put these two reports together and the market will interpret them as the economy is growing at a softer pace and inflation is back on a cooling trajectory. In other words, the market will view this combination as supporting eventual rate cuts, driving stocks higher especially as the 10-Year Treasury yield trades off. We do have a few Fed officials Wednesday, including the more hawkish Minneapolis Fed President Neel Kaskhari, who is likely to comment that the latest data show inflation improvement is back on track, but the Fed will need to see more.
In response, we are dipping into our shopping list for the portfolio, scooping up more shares of LH, MSFT, and TTD. If the portfolio’s positions in Axon Enterprise AXON and Universal Display OLED were smaller in size, we would be adding to those as well.
We will have more detailed comments on both the CPI and Retail Sales reports, including what the Retail Sales line items say about several of our holdings.
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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long LH, MSFT, TTD, AXON and OLED.
