A Higher Personal Consumption Expenditures Price Index Combined With a Lukewarm Change in Personal Income Deflated the Market's Momentum on Friday
The stock market indices had a good day for the most part of the trading day until the last hour when suddenly all three indices dropped to near zero.
The core personal consumption expenditures price index increased by 3.1% compared to a year ago. This is one of the key indicators the Fed uses to gauge the inflation rate. Combine that with the fading impact of the stimulus checks on personal income, and I'm not surprised to see the market has lost its momentum today. The next important economic indicator is the monthly jobs report expected to come out next week. I'd expect more market volatility as monthly economic data gets released. Let's monitor and discuss the impact next week.
By the way, stock markets are closed on Monday, May 31st in observation of Memorial Day. We all get to do some fact-based research without the usual market chatter.
Excellent Quarterly Earnings Reports and an Upward Full-year Forecast Pushed Salesforce.com's (CRM) and Veeva Systems' (VEEV) Stock Prices Up
Shares of Veeva Systems (VEEV) were up more than 10%. Shares of Salesforce.com (CRM) were up by more than 5% as well. Veeva uses Salesforce.com's tech infrastructure to deliver customer relationship management solutions to the healthcare industry.
It's interesting to see the two stocks are moving together. Veeva released an excellent quarterly earnings report, with a 29% year-over-year revenue jump.
Salesforce.com also releases a strong quarterly earnings report, adjusting its full-year revenue forecast upward.
I own both stocks and believe both are excellent stocks to hold for the long term. If you don't own them, consider adding them to your watchlist. If you ever find these two stocks dragged down by the market's pessimism, consider adding a few shares to your portfolio. Both companies are cash-rich, well-managed, and well-established companies. That's what I did the last time these stocks dropped!
Despite the Price Drop, Costco (COST) Continued to Deliver Strong Results and Future Upside Potential
Shares of Costco (COST) were down more than 2% after the company released its latest earnings report. It's quite unusual these days to see Costco's stock price down. It's also double surprising to see the price dropped even though the company announced it's bringing back popular food court items and food sampling.
Diggin into the earnings report, revenue was up across the board, including an excellent eCommerce growth rate.
Quite a few financial analysts also upgraded their price target for Costco to a higher level. There is no apparent reason for the price drop today.
While the stock price drop is small, it may be a good time to pick up some shares, especially if you are building a dividend-focused portfolio.
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