ECONOMIC SILUET: Watch these overbought tech names, Foot Locker and these banking ETF standouts in tomorrow’s trading

Senin, 22 Mei 2023

MON, MAY 22, 2023

Tomorrow's Top CNBC Stories Tonight

Big day for communication services

Some big bright spots in communication services today. Match Group was the leader in the S&P 500, gaining over 6%. There was no clear reason for its strong start this morning, though the company did announce a former Meta executive as its Hinge product chief midday. Speaking of Meta, it extended its march higher, hitting its highest level since February 2022. That stock has more than doubled in 2023. And tech mega-cap Alphabet also hit a fresh 52-week high. It's now up over 40% this year.

Progyny's jump

Progyny outperformed after BTIG initiated analyst coverage with a buy rating and a price target of $50 per share (the stock finished today at $38.71). Analysts expect the company to be a beneficiary as more Americans turn to fertility treatments for growing their families. Progyny partners with employers to provide related benefits for their workers. Including today's move, the stock is up 24% this year, though it's still around 17% off its August high.

Foot Locker's slide continues

Things didn't get any better for Foot Locker, with the stock falling 8.5% to finish near its lows of the session. That follows Friday's 27% dive on the heels of disappointing results. Today's move comes after more than ten analysts lowered their price targets on the stock. Citi downgraded it to neutral, saying it expects the company's full-year results to be even worse than Foot Locker's lowered guidance.

Twilio's rebound

Twilio was a leader in cloud and enterprise today, gaining over 12%. The stock had fallen hard after earnings a couple weeks ago, but a roughly 20% rebound in the past week has it about flat over the last month. No clear news behind the move today, though Stifel mentioned the stock in a broad note about how companies are interacting with artificial intelligence. Analysts there say Twilio's portfolio "appears ripe for AI enhancements" and say management views AI as "an accelerant to the business."

An ugly month for this ETF

Consumer staples underperformed in today's session, with notable declines in giants like Procter & Gamble, Coca-Cola and Pepsi. A range of other names were also firmly in negative territory, including Kimberly-Clark, Lamb Weston and General Mills. The staples are lagging the broader S&P 500 quite a bit year to date, and the Consumer Staples Select Sector SPDR ETF (XLP) is currently tracking for its worst month since September.

Tech in overbought territory

Nick Wells of the CNBC data team alerting us tonight to the Technology Select Sector SPDR Fund (XLK), which tracks the S&P Tech sector. It is now in overbought territory with a relative strength index reading of 70.8.
The relative strength index is one of several technical indicators a trader might use to see if a stock or ETF has run up too far, too fast. The RSI often measures a relatively short-term move for a stock. A reading of 70 or above is seen as overbought, while 30 or below is seen as oversold.
Of the 66 components of the XLK, 21 of them have an RSI above 70.
Highest on the list are Gartner, Fortinet, ServiceNow, Broadcom and F5.
Microsoft is above 70 at 72. The stock is up 34% year to date.
Alphabet is above 70 — at 80. Shares are up 42% in 2023.
Apple, Amazon and Netflix are below the 70 mark on RSI: All are in the 60s. Shares of Apple and Amazon are up roughly 35% year to date, while Netflix is up 23% in 2023.
The Communication Services Select Sector SPDR Fund (XLC), which tracks stocks in the S&P Communications Sector, is just under the 70 RSI mark. That sector includes stocks like Meta, Alphabet, Netflix, Take-Two, EA and Comcast.
By comparison, the Utilities Select Sector SPDR Fund (XLU), which tracks utility stocks, is sitting at 36 on the RSI scale.

Regional banks and commercial real estate

The SPDR S&P Regional Banking ETF (KRE) was up 3.2% today.
It is up nearly 8% in a week.
Customers Bancorp and PacWest are up 28% in a week. Western Alliance is up 23% in a week.
Commerce Bancshares, 1st Source and Northwest Bancshares are among the weaker names. Commerce is off more than 1% in the past week, while the other two are up just over 1%.
In an article on CNBC.com by banking reporter Hugh Son, JPMorgan's CEO Jamie Dimon today said commercial real estate is an area that could be a problem for lenders. He said, "It'll be certain locations, certain office properties, certain construction loans. It could be very isolated; it won't be every bank."
CNBC's Diana Olick looked at the not-so-great picture in Los Angeles today. If you missed it, here you go.

Bitcoin and the crypto stocks

Retail

In the last three months, the SPDR S&P Retail ETF (XRT) is down 12.6%.
Dick's Sporting Goods reports tomorrow. The stock is down about 2.3% in the last three months and down roughly 8.5% in a week.
The stock is 17% off the 52-week high hit two months ago.