Markets grew for the week for the first time in a month. Is it a reason to celebrate or a breather in the pullback?
Monday S&P 500 0.87% | NASDAQ 1.11%
Nine major companies reported earnings, with two missing expectations. Equities jumped to open the week. Outside of earnings data there was not much to support the rally. It was likely a jump on three consecutive weeks of down market, creating better by opportunities.
Tuesday S&P 500 1.20% | NASDAQ 1.59%
35 major companies reported earnings, with five missing expectations. Housing data came in better than expected. The heavy earnings data drove markets higher on Tuesday, pun intended. GM (GM) and Tesla (TSLA) were among reporters that helped propel markets.
Wednesday S&P 500 0.02% | NASDAQ 0.10%
40 major companies reported earnings, with six missing expectations. Core durable goods orders came in lighter than expected. Strong earnings data was counter-balanced by higher rate expectations. This left markets fairly unchanged.
Thursday S&P 500 0.46% | NASDAQ 0.64%
60 major companies reported earnings, with 13 missing expectations. GDP grew at a much slower pace than expected(1.6% vs 2.5%). Unemployment data continued to show strength. GDP and forward guidance from Meta (META) spooked markets early. They managed to climb halfway out of the hole that was dug as the earnings flowed in throughout the day.
Friday S&P 500 1.02% | NASDAQ 2.03%
13 major companies reported earnings, with five missing expectations. Consumer sentiment softened in April. Core Personal Consumption Expenditures (PCE) held steady at 2.8% in March. This is the Federal Reserve Board’s (FRB) preferred gauge of inflation. Between PCE data and earnings from Alphabet (GOOG) and Microsoft (MSFT) markets surged on the day.
Conclusion S&P 500 2.67% | NASDAQ 4.23%
The markets experienced a strong bounce back this last week in comparison to the last three weeks. Do not be fooled. Markets have a way to go to recapture highs as the growth did not even recover from the prior week. This indicates that there is room for markets to continue the run up as earnings season wears on. There are major hurdles this coming week with the FRB meeting, Jobs data, and Apple (AAPL) reports earnings.
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Markets were flat for the week. Capital Gains were driving trade late in the week, what does it mean going forward?
Monday
With a light day in the way of economic data, the inflation focal point did not fade. Markets were lower, led by the NASDAQ and long dated interest rates moved north.
Tuesday
In another day of light data, the markets closed lower. The NASDAQ again led the way lower. In a contrary step interest rates were actually lower on the day. The move became less about interest rates and perhaps some earnings misses.
Wednesday
In a course reversal markets rose broadly on Wednesday. Again, NASDAQ led the way, rising 1.19%. Rates were little changed on the day as focus remained on the current earnings season.
Thursday
Markets were little changed for most of the day. However, it was announced that capital gains would be a target for future reform. This would put a dent into markets as there would be less incentive to invest.
Friday
Markets rebounded Friday as Thursday viewed as an over-reaction to the proposal. This is good news, signaling a desire by investors to be long the market heading into the weekend news cycle.
Conclusion
Markets were moved by a capital gains proposal last week. This announcement is likely to be a starting point of negotiations. Current market conditions should not be impacted by this information. Expect earnings season to dominate markets for the coming week.
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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.