TGIF Stocks: Friday's top premarket movers 🚀

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May 31, 2024

Hey traders! It's Michael here with the Stock Dork Cheat Sheet: Premarket Report, your go-to guide for the day's biggest trading news and hottest premarket stocks! Let's get ready to trade!

MARKETS

The Nasdaq continued its slide on Thursday, with the Dow and S&P 500 trailing close behind. The small-cap Russ2K managed to outperform its large-cap cohorts with a modest rally.

Dow [-0.8%]
S&P 500 [-0.6%]
Nasdaq [-1.0%]
Russell 2K [+1.0%]

Futures are drifting lower in early trading. S&P 500 and Dow contracts are both down by about 0.1%

WHAT TO WATCH TODAY

The latest data on the Fed’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index, will drop just before the opening bell. Futures are hovering near flat in anticipation of the report, which will likely set the tone for today’s trading session. Economists predict PCE grew 0.3% from last month and 2.7% from a year ago, keeping pace with March’s numbers.

Don't miss out! Get all the Details HERE »

MARKET-MOVING NEWS

Bank of America Boss Says Consumers, Businesses Are Cutting Back ✂️

U.S. consumers and businesses have become more cautious about spending this year due to elevated inflation and interest rates, according to Bank of America CEO Brian Moynihan.

He noted that both households and small- to medium-sized businesses are slowing their purchase rates for a variety of goods and services.

Slowing Spending 📉
Consumer spending through card payments, checks, and ATM withdrawals has grown about 3.5% this year, reaching roughly $4 trillion. This is a significant slowdown from the nearly 10% growth rate observed in May 2023.

“Both of our customer bases that have a lot to do with how the American economy runs are saying, ‘You know what? I’m being careful, slowing things down,’” Moynihan said at a financial conference in New York.

Inflation & Rates 💵
The slowdown began last summer and aligns with the low-growth environment experienced from 2016 through 2018. Consumers and businesses are dealing with higher inflation and borrowing costs, which remain elevated even nearly a year after the last Federal Reserve rate increase.

Consumer Behavior 🛒
Consumers continue to face high prices for goods and services. Food shoppers are visiting more store locations to find deals, with Moynihan noting, “They’re going to three grocery stores instead of two.”

The growth in overall spending is now primarily driven by travel and entertainment, while spending on other items has moderated, except for insurance payments.

Small- and medium-sized businesses are also cautious, with owners hesitant to hire, purchase equipment, or buy software at the same pace as before.

Executive Outlook 📊
Moynihan hopes the Fed will begin cutting rates before the end of the year, and he predicted the U.S. economy will grow at around 2%, avoiding a recession.

TODAY'S TOP STOCKS

Zscaler [ZS] - Last Close: $156.65

Cybersecurity stock Scaler is moving higher after a strong performance on its fiscal Q3 earnings report publishied late Thursday.

Zscaler posted EPS of $0.88 on revenues of $553.2 million, topping the consensus estimate of $0.65 EPS on $536.1 million in revenues.

The company’s fiscal Q4 and full-year 2024 sales guidance also topped the Street’s expectations.

ZS is up 15.8% on the news, but volume is thin at just under 100K shares traded.

My Take: ZS and other cybersecurity stocks have been making strides lately. These stocks debuted a few years ago with a lot of fanfare, but have been disappointing so far. Now, it’s starting to look like the sector may be finding its feet.

Affinity Bancshares [AFBI] - Last Close: $16.95

After Thursday’s close, Affinity Bancshares announced it had entered into a deal to sell its subsidiary, Affinity Bank, to Atlanta Postal Credit Union.

Under the terms of the deal, Atlanta Postal will acquired all assets of the subsidiary and assume all liabilities in an all-cash transaction.

The companies did not disclose the final selling price, but both boards have approved the transaction and expect it to close in Q4 or Q1 2025.

AFBI is up 23.5% but volume is very thin in the premarket.

My Take: Hard to say how good this del is for AFBI without knowing the numbers, but the stock is on pace to set a new 52-week high if this rally keeps up.

Novo Integrated Sciences [NVOS] - Last Close: $0.451

This tiny biotech is surging after it received a Standby Letter of Credit from HSBC confirming its approval for a $78 million line of credit.

Novo says it will use the funds to secure the closing of a previously disclosed Purchase & Sale agreement to acquired the Ophir Collection.

NVOS is up 72.9% on 15 million shares traded.

My Take: NOVO saw a huge volume spike yesterday, and it could find support at $0.75 if it can hold on through the closing bell.

Innovative Eyewear [LUCY] - Last Close: $0.79

Innovative Eyewear just announced the closing of a $2.5 million registered direct offering priced at-the-market under Nasdaq rules.

The company issued and sold 5.26 million shares of common stock priced at $0.475 apiece, plus unregistered warrants to buy another 5.26 million shares.

LUCY is up 26.4% on over 8 million shares traded today.

My Take: LUCY has been on a tear since last Friday. Shares are up 315% over the past 5 days, despite minimal news.

HOT STOCKS

Gainers
XChange [XHG] >> +79.5%
Nuburu [BURU] >> +77.8%
Digital Health Acquisition [DHAC] >> +22.4%

Decliners
Sify [SIFY] >> (38.1%)
Summit Therapeutics [SMMT] >> (25.3%)
MongoDB [MDB] >> (22.8%)

FEATURED EARNINGS

Mesa Laboratories [MLAB] ... AM
Genesco [GCO] ... AM
X Financial [XYF] ... AM

ECONOMY

PCE index [Apr] ... 8:30aChicago Business Barometer (PMI) [May] ... 9:45a