The end result of the week was green, but was there reason for it and does it tell us anything for this week?
Monday S&P 500 1.03% | NASDAQ 1.19%
Eleven major companies reported earnings, with one missing expectations. Much of the movement on Monday came as an extension of the Friday rally. A move based on the weaker than expected jobs report. Growth stocks outperformed as lower interest rates would carry a greater impact on their performance.
Tuesday S&P 500 0.13% | NASDAQ 0.10%
Twenty-three major companies reported earnings, with two missing expectations. Markets were little changed on the day. While stock stood steady, fixed income yields did slip on Tuesday. In general, this is a continuation of the last few days.
Wednesday S&P 500 0.00% | NASDAQ 0.18%
Fourteen major companies reported earnings, with three missing expectations. Mortgage rates slipped a little lower as rate hike expectations faded. The 10-year treasury rate, to the contrary, rose slightly on the day. This was a reversal of a recent trend. Not a notable enough increase to think that sentiment has changed.
Thursday S&P 500 0.51% | NASDAQ 0.27%
Eleven major companies reported earnings, with three missing expectations. Initial jobless claims came in higher than expected, but still at a muted level. The jobs data brought markets out of their two-day coma. Employment data is showing signs of softening. The hope is the Federal Reserve Board (FRB) will start getting the signals needed to start cutting rates.
Friday S&P 500 0.16% | NASDAQ 0.03%
Michigan Consumer Sentiment is projected to fall to 67.4 in May. If that holds true, it will be the lowest reading since August of 2023. This was a period where fears were high that a recession was on the horizon. The lack of earnings data and the weaker potential sentiment sent markets higher. Again, weakness is a signal of potential FRB moves.
Conclusion S&P 500 0.55% | NASDAQ 1.43%
Markets advanced for the week, albeit with little decisiveness. Market growth has all but stalled as more data is needed to entice investors. Last week’s message was clear from the FRB; they do not expect that their next move will be a hike. The focus is on the timing of a cut. Earnings data will slow down next week; however, inflation data will be in focus. It should give investors a better read on potential rate cuts later this year.
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| AUTHOR: Jason J. Roque, CFP®, APMA®, AWMA® TITLE: Investment Adviser Rep – CCO TAGS: S&P 500, |
This was a quiet week for markets. Is this the calm before the storm, or just the new norm?
Monday
The week opened with more of a whimper than anything else. The trading clearly pointed to renewed concerns regarding COVID and potential closures. The S&P 500 was little changed, down 0.1%. More telling was that energy closed lower and the NASDAQ rose.
Tuesday
Market volume increased Tuesday, however, markets were still fairly subdued. The S&P 500 gained 0.1%. The trading on Tuesday was decidedly more upbeat as everything retraced itself from Monday. Energy surged higher, the NASDAQ fell, and broadly market indices were higher.
Wednesday
Markets edge higher on Wednesday with the S&P 500 gaining 0.2%. CPI data for July showed an inflation rate of 5.4% YoY. While higher than the 5.3% expected, it was only modestly higher. Core CPI, which strips out food and fuel, came it at 4.3%.
Thursday
Markets expanded 0.3% in the most active day last week. Initial jobless claims improved, down to 375K. All major indices with the exception of he Russell 2000 were up.
Friday
The S&P 500 had a quiet Friday, up 0.1% most of the day and closing up 0.2%. Consumer Sentiment is projected to fall for August to 70.2, the lowest projected level since April of 2020.
Conclusion
Good or bad, it was a very quiet week on the market. The S&P rose 31 points, not even a full percent, however, stability and calm are not uncommon for August. The fall return to trade (volumes) could likely carry more volatility for equity markets.
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