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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With a close eye on inflationary pressures, will the recovery continue as wanted or will they need help finding equilibrium?
Monday
Markets fell .25% on Monday as the week continued the losses from the prior week. The NASDAQ led the way lower as it has for the last couple of weeks. Although current housing statistics are lower, the NAHB housing index is holding steady at 83. Interest is there; however, material costs and a lack of inventory are stemming growth.
Tuesday
In a continued fall of market activity, the S&P 500 slid .85% Tuesday. The NASDAQ trailed the S&P 500 for a change during the fall. Both new housing starts and building permits fell in April. Lending to the pessimism about current economic conditions. This should yield a net gain as the reopening seems to be coming on slower than expected, quelling concerns about inflation.
Wednesday
The slide in market value this week continued with the S&P 500 falling .29% Wednesday. Again, the NASDAQ lagged the S&P 500 on the fall. Gold and interest rates gained on the day.
Thursday
In an attempt to stage a rebound on the week, the S&P 500 rose 1.06%. The NASDAQ led the way as the dollar weakened and concerns over inflation seemed to subside. Most of the recovery trade on the day related to initial jobless claims coming in at 444K. This is the lowest level since the start of the pandemic and the third week in a row under 500K.
Friday
The S&P 500 was little changed on Friday. Both manufacturing and services PMI information improved from the prior month. Manufacturing experienced a minor increase, while services jumped dramatically.
Conclusion
The markets as a whole continue to gauge price increases against worker production to alleviate supply shortages. The question has been whether reentry into open employment opportunities would keep pace with consumer demand. Figures show that there continues to be a slow movement back into the workforce. New housing starts fell which reflects a slower recovery in this area. Housing data eased major inflationary concerns following the spike in the Consumer Price Index (CPI) figures from April. The .43% fall for the week was not much, but enough to keep the recent trend of weekly losses continuing.
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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.