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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A bad jobs report was delivered on Friday. Is it good news or bad news for the Market?
Monday
Markets opened the week on a strong note. The S&P 500 rose 0.5%. Rotation towards growth stocks continue. Optimism seemed to be brewing regarding the August jobs report due out at the end of the week.
Tuesday
Reversing trend from Monday, markets softened on Tuesday as the S&P 500 lost 0.1%. Home prices rose substantially year over year, however consumer confidence fell sharply last month. A weak consumer leads to weak earnings.
Wednesday
Markets were little changed on Wednesday as the focus continues to shift to jobs data due out on Friday. Investors are hoping that sustained growth in jobs could signal a strong 3rd quarter GDP reading.
Thursday
The S&P 500 gained 0.25% on Thursday. Factory orders rose 0.4% in July showing the economy is continuing to expand. Additionally, initial jobless claims fell to their lowest level since the start of the pandemic.
Friday
Markets were little changed on Friday as jobs data disappointed. The unemployment rate fell to 5.2% from 5.4%, however, non-farm payrolls missed the mark substantially.
Conclusion
Every month for one week the markets seem to focus on the Friday. The first Friday of every month is the all important jobs report. The health of the job market tells us about consumer spending in the future. It also informs us on how the Federal Reserve Board (FRB) may behave next. Full employment is 50% of the objective for the FRB. A strong jobs report means the FRB may tighten monetary policy. While a weak one actually signals that looser monetary policy may be around for a while. So, yes, the poor jobs report is not good for our economy. It was, however, a good indication that the FRB may continue bond purchases a little longer than originally thought.
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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.