🏠 Pending home sales fall

and more earnings

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Good morning investors! Yesterday was a surprise with big tech going red and bringing the market down.

Today we cover:

  • Pending home sales fell in April.

  • More earnings.

  • Dell has a fall.

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📊 Economy and News 

Pending home sales in April slump to lowest level since the start of the pandemic

Signed sales contracts for existing homes fell by 7.7% in April compared to March, marking the slowest pace since April 2020.

These pending sales serve as a forward-looking indicator of closed sales one to two months later and were 7.4% lower than in April of the previous year.

Sales declined in every region of the country, with the Midwest and West experiencing the most significant drops. The Midwest includes some of the nation's most affordable markets, while the West encompasses some of the most expensive.

Since this count is based on signed contracts, it reflects real-time buyer reactions to mortgage rates. The average rate for a 30-year fixed mortgage was approximately 6.9% at the end of March and rose to 7.5% by the end of April.

It can be concluded that higher mortgage rates had an effect.

Global hits:

US GDP: The U.S. GDP growth expanded at an annualized rate of 1.30% in the first quarter, compared to the initial estimate of 1.60%.

Consumer spending was revised downward, primarily due to declines in expenditures on automobiles and other goods.

Additionally, net exports contributed negatively to growth for the first time in two years.

Changes in taxes: The Internal Revenue Service (IRS) has made Direct File a permanent option for filing federal tax returns across all fifty U.S. states. As a result, shares of Intuit, the parent company of TurboTax, fell by -6%.

📈 Stocks

S&P 500 5,235.48 (-0.60%)
DJIA 38,111.48 (-0.86%)
NASDAQ 16,737.08 (-1.08%)
BRENT CRUDE 81.44 (-0.49%)
* Prices as of May 31st, 12:20 AM UTC

Stock earnings are here

The earnings season is about to end, here are the latest results:

  • American Eagle is making gains in improving profit and saw its fiscal first-quarter net income nearly quadruple compared to the year-earlier period. Still, it has a cautious outlook for the second half of the year as it plans to lap tougher comparisons and contend with “noise” around the upcoming election, finance chief Mike Mathias said. American Eagle President Jennifer Foyle said the company is revamping its product assortment and reducing the number of items it sells.

  • Foot Locker on Thursday posted better-than-expected comparable sales as CEO Mary Dillon’s turnaround plan shows signs that it’s beginning to bear fruit. The former Ulta boss said average selling prices increased during the quarter, proving that consumers are willing to pay full price for the right product. The sneaker company has been working to reverse an ongoing sales slump by revamping its stores and winning back brands.

  • Kohl’s posted a quarterly loss and missed Wall Street’s revenue expectations for the first quarter. The retailer also lowered its forecast for the full year. The company noted strength in its Sephora shop-in-shop partnership. In March, Kohl’s struck a similar partnership with Babies R Us.

  • Best Buy missed Wall Street’s quarterly sales expectations on Thursday as softer demand for consumer electronics persisted. However, the retailer beat on earnings per share and stuck by its full-year forecast. Best Buy has noticed a pullback in purchases of discretionary items as consumers manage higher costs because of inflation.

Boeing is stuck: FAA won’t clear Boeing to increase 737 Max production for several months.This comes after Boeing’s departing CEO Dave Calhoun and other top leaders met with the Federal Aviation Administration to present its safety plan.

The FAA in February gave Boeing 90 days to come up with a quality improvement plan in the wake of a near-catastrophic door plug blowout on an Alaska Airlines flight in January.

Boeing spelled out improvements in employee training, platforms for workers’ concerns and the reduction of out-of-sequence work.

Dell fails to live up to expectations: Dell shares are down -18% despite the company reporting a seemingly strong quarter. Adjusted earnings per share were $1.27 on revenues of $22.24 billion, surpassing the expected $1.26 per share on $21.64 billion in revenue.

Dell’s Infrastructure Solutions Group, which includes data centers, reported a 22% year-over-year revenue increase to $9.20 billion. The servers unit was the fastest-growing segment, with a 42% year-over-year rise in revenue, driven by strong demand for artificial intelligence (AI) servers. Dell has emerged as a leading vendor in this sector, with Nvidia CEO Jensen Huang highlighting the company at a conference earlier this year.

However, growth in the Client Solutions Group, which includes PCs and laptops, was flat at $12 billion in revenue. The primary concern is management's projection that the adjusted gross margin will decline by 150 basis points in fiscal 2025.

An analyst from Gartner suggested this decline is likely due to competitive pricing pressures, as peers strive to gain market share in the current environment.

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💵 Personal Finance

How investors can make money through crowdfunding – Part II

Here’s more on how to make money through crowdfunding:

Real Estate Crowdfunding

Real estate crowdfunding allows investors to pool their money with others to invest in real estate properties. It is similar to an ETF where several people come together to buy a property and make money in a variety of ways, including:

  • Rental Income: If the property generates rental income, investors receive a share of that income.

  • Property Appreciation: Investors hope that the property's value increases over time, and they can profit when it is sold.

  • Loan Interest: Some real estate crowdfunding platforms also offer debt-based investments in real estate.

Rewards Crowdfunding

Investors in rewards crowdfunding typically receive a product or service in exchange for their investment. These rewards can be in a variety of forms. For example, a chance to attend a special event. Though not always of monetary value, these rewards can end up being beneficial.

In some cases, you may even have the option to get your hands on a new product for free. Rewards offered depend on the nature of the product. For example, if you fund a movie, you will typically get a chance to attend the premiere with stars, see your name on the big screen, but not necessarily make money.

How to start: The first step is to look for a platform where you can find opportunities. Some of the top websites include KickStarter, SeedInvest, RocketHub, StartEngine, and GoFundMe.

You will have to sign up for an account (usually free) and go through available projects.

Don’t make haste. Look at projects carefully and invest in something you truly believe in.

💰 Be a Better Investor

“There is no passion to be found playing small—in settling for a life that is less than the one you are capable of living.”

Nelson Mandela

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