Markets sold consistently across the week. Is there more red to expect in coming weeks?
Monday S&P 500 1.20% | NASDAQ 1.79%
Happy Tax Day! Retail sales expanded more than expected in March. Three major companies reported earnings, all three met expectations, all of which were financials. This was not surprising as financials usually head up earnings season. They also give us a good indication of how earnings season should go. Retail sales, however, took center stage as a strong consumer reduces the need for Federal Reserve Board (FRB) rate cuts. This caused an outsized move downward as investors anticipate less stimulus for 2024.
Tuesday S&P 500 0.21% | NASDAQ 0.12%
Housing data for March came in weaker than market expectation. Ten major companies reported earnings, with two missing expectations. Although mild, the losses continued. FRB Chair Powell indicated that inflation’s recent strength does not give the board confidence to start easing policy.
Wednesday S&P 500 0.58% | NASDAQ 1.15%
11 major companies reported earnings on the day, with three missing expectations. Focus was squarely on earnings as there was little economic data on the day. Tech stocks took a hit as AI chip orders for a specific company did not meet expectations. As would be expected this hit the tech heavy NASDAQ harder than the S&P 500.
Thursday S&P 500 0.22% | NASDAQ 0.52%
Initial unemployment claims remain benign. Existing home sales also slowed in March. 11 major companies reported earnings on the day, with one missing expectations. Markets were down for the day, but in a less dramatic fashion. Robust employment data typically is not favorable information when hoping for an FRB rate cut (as investors are).
Friday S&P 500 0.88% | NASDAQ 2.05%
Six major companies reported earnings on the day, with one missing expectations. NASDAQ led the way lower as Tech and communications got hit hardest. The best performers on the day were defensives, like utilities, healthcare, staples, and also financials.
Conclusion S&P 500 3.05% | NASDAQ 5.52%
The week was bloody. There was not a single up day for the S&P 500 or the NASDAQ Composite. The moves were not founded in fundamental data, as earnings did well. Some forward guidance shows warning of slowing revenues throughout the year, but that is normal for the last two years. Economic data, which signals the economy is doing well, has actually pushed stocks lower. The stronger the economy, the less likely the FRB is to act in reducing rates. The sell-off has extended to approximately 6%. It may take a breather in the coming days but expect that we are not done.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.
Markets were little changed last week, but the economic calendar was not light. What’s holding markets at bay?
Monday
Markets gained on Monday as the week got underway. The move was broadly bullish. We saw safe haven assets retreat while risk assets gained a bid. This rise on Monday led to record closes for many indices. While bullish, gains were meager as markets await the results of the Federal Reserve Board (FRB) meeting later this week.
Tuesday
The red-hot housing market continues to gain value as home prices rose 18% over the last 12 months. Markets pulled back from their record highs on Tuesday as durable goods orders missed expectations. On a positive note, the CB consumer confidence measure remained high at 129.1. It was expected to fall to 123.9.
Wednesday
Markets struggled to find their north early as they awaited the results of the FRB meeting. Nothing changed after the FRB meeting was over. The S&P 500 was little changed on the day. The Russell 2000 gained 1.5% on the day, however.
Thursday
Investor sentiment was buoyant on Thursday as markets rose. They did so on news that US GDP rose 6.5% for the second quarter. That gives us two consecutive quarters with GDP in excess of 6%! Additionally, new jobless claims fell to 400K.
Friday
Markets gave back the gains from Thursday and ended lower on the week. The S&P 500 lost appx .3% for the week on news that inflation pressures are persisting.
Conclusion
The rise in GDP and inflation creates a recipe (at the surface) of sooner than anticipated rate hikes from the FRB–a decision which would tamp down growth and subsequently, inflation. The FRB is acutely focused on the longevity associated with current inflation, which they view as temporary. Should it persist beyond the next several months, we may see rate increases sooner than desired.
~Your Future… Our Services… Together!~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.