Today's Scoop:

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Here’s what you need to know today…

1. Business activity picked up this month.

2. More people bought new homes in April as prices sank.

3. Time is running out on debt ceiling negotiations.

S&P 500: 4,145.58
1Mo: +1% | 1Yr: +5% | 5Yr: +52%

The market drifted lower today as debt ceiling negotiations dragged on with no clear end in sight.

There really needs to be a debt ceiling deal by Friday to give Congress enough time to pass a bill to raise the spending limit before June 1st, the date Treasury Secretary Yellen said we won’t be able to pay our bills. There’s a lot more concerning talk about how a breach of June 1st might “just be similar to a government shutdown and not a full-blown global financial crisis.” It would be nice to avoid either situation, just in case.

Business activity picked up this month. S&P Global’s Composite PMI Output Index, which tracks the manufacturing and services sectors, rose to a 13-month high in May. Businesses received more orders, hired more people, and reduced costs, particularly in the services sector.

New home prices dropped in April, and buyers jumped back in. The Commerce Department reported a surprise jump in new home sales in April as the median price for a brand-new home fell to $420,800, the lowest level since December 2021.

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• JetBlue and American have to break up

• Chevron expands its US oil capabilities

• JPMorgan makes the 2nd-biggest carbon capture investment

• Dick’s Sporting Goods shows athletes are still spending

• Zoom’s slowing but gave upbeat guidance [🤓]

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Earnings Guidance & Outlooks

One of the most critical components of corporate financial reports is the guidance. Public companies must report on their financial health each quarter, releasing standardized metrics on their sales, expenses, debt, profit, etc. All of that information, though, is backward-looking. Investors are buying a company for its future earnings.

Companies often “issue guidance” or provide projections for future sales and earnings. This gives investors a sense of optimism or pessimism from the people who know the company the best. Forecasted metrics are not required, so many companies have avoided projections this past year, given the unprecedented economic events. If they do report, you'll hear that they may have raised or lowered guidance, meaning they expect higher or lower profit/sales/whatever than they projected last time. You might also hear guidance compared to Wall Street Analysts' projections or estimates.

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Here’s something to consider for today’s challenges:

Volatile Markets: Automate your investment contributions to take the emotions out of it. We use M1 to automate banking and investing in one place.

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