S&P 500: Rally Will Likely Gain Steam, Defying The Doom Scenarios (4 min read)
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Despite many bearish arguments, the US stock market continues to rally, defying negative news and predictions. Fear factors like the Fed's rate hikes, a looming recession, and potential financial crises have not halted the market's upward trend. This article supports the unpopular belief of a bull market this year and argues that whenever the market is going up on bearish news, it will likely continue to rally. It predicts the S&P 500 to go above 4,500 by year-end and shares a few fundamental factors supporting his argument.

IMF no longer expects UK recession this year (2 min read)
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The International Monetary Fund (IMF) has revised its forecast for the UK economy, upgrading its growth projection to 0.4% in 2023. This is a significant improvement from its previous forecast of a 0.3% contraction. The IMF said the new forecast reflects the higher-than-expected resilience in demand that was helped by strong wage growth, improved confidence, and falling energy prices. Despite the positive revision, the IMF still warned of risks related to UK’s inflation and expects it to return to the central bank's 2% target by mid-2025.

Zoom lifts annual forecasts even as growth slows from pandemic peaks (2 min read)

Zoom raised its full-year revenue and profit forecasts, betting on hybrid work trends to sustain demand for its video-conferencing services. The company increased its revenue forecast by about 2% despite currently growing at the slowest pace on record. Although Zoom posted sales in Q1 better than analysts’ estimates, its overall growth has decelerated. Many competitors have emerged since Zoom gained popularity during lockdowns, which made it even harder for the company to retain users in the last year.

Lowe’s cuts full-year sales forecast, as spending on DIY projects weakens (3 min read)

Like Home Depot’s weak outlook for 2023 last week, Lowe now expects lower sales for the rest of the year due to lower lumber prices and decreased purchases by DIY customers. Despite beating revenue and earnings expectations in Q1, the company anticipates a decline in discretionary consumer spending in the coming quarters. Lowe’s CEO acknowledged that reduced non-essential items spending is a major challenge for the company, just like other discretionary retailers, but remains optimistic about the future of home improvement industry.

Fido’s money hoover wins again (2 min read)
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Fidelity's S&P 500 index fund has surpassed State Street's SPDR S&P 500 ETF as the largest in terms of assets. Fidelity's fund managed $388.6 billion at the end of April, while State Street's ETF had $385.8 billion. The growth can be attributed to Fidelity’s massive distribution and its index fund being the cheapest among competitors. Fidelity is well known as an active manager and its recent transformation to become a major player in index funds is notable in the industry.

US Debt Ceiling Crisis: Buying Opportunity in Treasury ETFs (2 min read)
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Investors have increasingly redeemed their assets from short-duration US Treasuries over the fear that the government may default on its debt as the deadline is approaching fast. The rapid outflows and loss in demand have pushed the yields on these Treasuries to well above 5%. However, several prominent investors have recently stated that although it is not certain, the US debt ceiling crisis has always been resolved at the last minute. For investors who are less concerned, the current attractive yields on these notes or funds pose a great buying opportunity.

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Thanks,
Thomas

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