May 28th Pre-Market

Good Morning

PCE inflation came in below expectations for the first time in a while. That's good news. But the economy is growing slower than we thought. Last quarter's growth got revised down to a 1.6 percent annual rate, weaker than the 2 percent first reported. So prices are easing and growth is slowing down at the same time.

Iran and the U.S. went back to trading strikes overnight so oil is above $90 again.

Let's dig in...

Today's Big Picture

1. Inflation Came In Below Expectations 

Core PCE printed 0.2 month-over-month. Wall Street expected 0.3. Headline was 0.4 vs 0.5 expected. Futures came off their lows and the Nasdaq flipped green. Two Fed officials this week openly talked about raising rates. Today's print makes that harder to justify. The catch is oil still sitting above $90 right now and none of that shows up until next month's number.

2. The Economy Is Slowing

The economy grew at a 1.6% annual rate last quarter, revised down from the 2.0% first reported. That miss got buried under the inflation headlines. Consumer spending and business investment were both weaker than first thought. Durable goods orders looked strong on the surface, up 7.9% against a 4.0% estimate, but most of that was defense and aircraft, not everyday business spending. And here's the part that sticks with me: spending grew 0.5% while income only grew 0.4%. Americans spent more than they made. Again.

3. Snowflake Just Gave SaaS A Pulse Snowflake 

$SNOW is up nearly 40 in premarket. Beat on earnings. Beat on revenue. Raised full-year guidance. Landed a $6 billion deal to use Amazon $AMZN custom chips. Accounts using its AI tools more than doubled in one quarter. Datadog $DDOG and MongoDB $MDB both up on the news. All year the market has been treating software companies like AI was going to replace them. Snowflake just showed it can also be the thing that makes them grow.

Market Overview

Today’s Sponsor

5 Zacks experts scan thousands of publicly traded companies. » Then select one apiece.

 See them now.

5 Zacks experts scan thousands of publicly traded companies and selects a single stock apiece, with the best realistic shot at gaining +100% or more in the next 12 months.

Every company also carries a strong Zacks Rank, meaning earnings estimates are already trending upward. These aren't companies you simply hold and hope.

These are positioned to start moving.

Download “5 Stocks Set to Double now”.

Stock Spotlight (pre-market)

Snowflake $SNOW ( ▼ 1.32% )  

beat on earnings and revenue, raised full-year product revenue guidance to $5.84 billion from $5.66 billion, and landed the $6 billion AWS deal. D.A. Davidson raised their price target to $300. Datadog $DDOG and MongoDB $MDB are both ripping in sympathy.

Dollar Tree $DLTR ( ▲ 2.32% )  

beat on both lines and raised full-year guidance. The DoorDash delivery partnership is the real story here. Discount retail adding same-day delivery while consumer financial stress is rising is a well-timed move.

Best Buy $BBY ( ▲ 2.09% )  

posted same-store sales growth of 2 against a Street estimate under 1. Gaming, computing, and mobile phones led the beat. CEO Corie Barry's final earnings cycle before Jason Bonfig takes over end of Q3.

Dell Technologies $DELL ( ▲ 0.08% )  

landed a $9.69 billion Pentagon contract for Microsoft $MSFT enterprise software across the U.S. military. Reports after the bell tonight.

Caesars Entertainment $CZR ( ▲ 1.41% )  

agreed to be acquired by Fertitta Entertainment for $31 a share in cash, a deal worth roughly $17.6 billion including debt. That's a 50 premium to where shares sat before the deal was first reported in February. Not subject to financing. Golden Nugget plus Caesars creates a Las Vegas mega-operator.

Marvell Technology $MRVL ( ▼ 4.59% )  

beat on both lines, guided above consensus, and management said scale-up interconnect revenue will more than double their prior $150 million outlook. Stock is still fading.

What to Watch

Costco After The Bell Is Now A Bigger Deal 

Costco reports into a day where we got a GDP miss and more 401(k) hardship withdrawal data from Fidelity. If Costco sees trade down behavior or membership softness, that's a third data point saying the consumer is cracking underneath record index levels.

JPMorgan Just Said It Could Spend $20 Billion On A Deal 

Jamie Dimon told a conference the bank is "on the lookout" for acquisitions up to $20 billion, the largest of his two decade tenure. He framed it as last resort, not strategy, but wealth management is the target.

BofA Says The Summer Correction Window Opens In June 

Their year end S&P target of 7,430 has already been hit. Breadth is narrowing. Fewer stocks are carrying the index. They are flagging June through September as a vulnerability zone. The S&P is on track for a ninth straight weekly gain, the longest streak since December 2023.

- John

Today’s Sponsor

$1.1 Billion in Art Sold in Less Than Three Hours

A single evening only brought in $1 billion at auction one other time, Paul Allen’s estate in 2022.

Christie’s May 18 evening sale was headlined by:

• Pollock: $181.2M, nearly 3x his previous record

• Brancusi: $107.6M, second highest sculpture price ever

• Rothko: $98.4M, a new record for the artist

Obvious outliers, but the evening capped a spring auction season that totaled $2.5 billion (roughly 2x last year). This follows a Q1’26 that saw the postwar contemporary art market grow 23.1%.

Masterworks offers investors the opportunity to invest in blue-chip contemporary and post-war art. Since 2017, it has offered over 500 artworks and raised over $1 billion in total investments.

29 exits to-date have delivered net annualized returns like 16.5%, 17.6% and 17.8% on sold works held over 12 months.

Join 70,000+ members in adding art to their portfolios.

Skip the waitlist here.

Skip the waitlist here.

^{*According to Masterworks data. Past performance is not indicative of future performance. Investing involves risk. See important disclosures at masterworks.com/cd}