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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Last week, there was a reversal of course for volatility. This led the NASDAQ 8% higher. Is there volatility risk ahead?
Monday S&P 500 0.74% | NASDAQ 2.04%
The markets opened with a bounce as oil prices continued their retreat from recent highs. Unfortunately, the bounce was short lived. The markets reacted to word that President Biden would be making a trip to the EU. The trip is to discuss a fourth round of sanctions against Russia. Additionally, China announced a lockdown for 50M people as a spread of COVID cases persists.
Tuesday S&P 500 2.17% | NASDAQ 2.93%
Oil prices retreated on Tuesday, falling below $100 a barrel. This move created optimism on equity markets that the inflationary impacts from oil will be short lived.
Wednesday S&P 500 2.24% | NASDAQ 3.79%
Markets opened sharply higher as anticipation of the rate hike later in the day was baked in. Additionally, news broke of a potential light at the end of the tunnel for the turmoil in Ukraine. Putin made statements that a Ukraine that was neutral but maintained a military could be a path forward. Oil prices fell in response.
Thursday S&P 500 1.23% | NASDAQ 1.33%
The rally continued to push markets higher. This marks the third day of growth. Early trading was choppy, but the markets picked up steam as the day wore on. The market surge occurred while WTI Crude Oil crossed back over $100/barrel. The inflationary effect oil has on the economy would deter stock market growth.
Friday S&P 500 1.17% | NASDAQ 2.05%
Markets climbed even with oil sustaining at $100/barrel. While oil sustained their levels, they didn’t rise as they have as of late. The sustained level is not ideal, but better then an advancing oil market. Interest rates on the year treasury fell on the sustained equity rally.
Conclusion S&P 500 6.20% | NASDAQ 8.59%
Beginning on Tuesday, markets surged throughout the week (even as the Federal Reserve Board (FRB) initiated lift off). While the initial hike was a mere 0.25%, the increase was a measured response that was received well by investors. Investor reaction after having a weekend to mull the FRB strategy will be an indicator of future weeks. A strategy that could see hikes at almost all of their remaining meetings.
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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.