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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Markets retreated throughout April. Should we expect ‘Sell in May & Go Away’ or is there a reason for hope?
Monday S&P 500 0.02% | NASDAQ 0.14%
The trading week opened deep in the red. The week was expected to be weak as technology companies were reporting. The equity markets climbed throughout the day, but it was not enough to end in the green. Interestingly, the 10-year treasury retreated, lending to the climb in equity prices throughout the day.
Tuesday S&P 500 2.84% | NASDAQ 3.95%
Markets pushed lower curtesy of technology stocks. Safe haven bonds caught a bid on the day as interest rates fell in response to the broad equity sell-off. Markets are now near their lows from early March.
Wednesday S&P 500 0.21% | NASDAQ 0.01%
Equities attempted to gain on the day, but their momentum faded late in the day. Facebook was set to report earnings after hours and concerns may have caused late selling. The 10-year treasury rose 0.1% on the day (rates and price move in opposite directions).
Thursday S&P 500 2.47% | NASDAQ 3.06%
In a major course reversal of recent sessions, markets rose substantially on Thursday. The move came in spite of a surprise contraction in the US economy. GDP was expected to rise 1% and actually fell 1.4%. The market turn may have come as a weaker economy creates less reason for the Federal Reserve Bank (FRB) to be aggressive. The 10-year treasury remained fairly unchanged, which is the bond markets way of saying, not so fast. This indicates FRB moves should remain as previously expected.
Friday S&P 500 3.67% | NASDAQ 4.17%
Whelp, that was short lived. The rally from Thursday was completely erased on Friday as markets tumbled right from the open. Amazon earnings disappointed sourly and served up a sell off on Friday. AMZN alone fell over 14% on the day.
Conclusion S&P 500 3.27% | NASDAQ 3.93%
Markets successfully swept the month of April. All four weeks were down. The month opened with FRB minutes announcing quantitative tightening and markets did not need much else to start the retreat. One out of every five years (on average) we get a ‘Sell in May and Go Away’ where markets retreat. Could this be inverted as the first four months only saw one month of gains? Friday’s rout of markets may be reason to think so. The S&P and NASDAQ have revisited their February lows and Friday’s sell-off was broad and extended. Generally, that is the type of sell-off that sets a floor. Of course, the FRB meeting on the 4th could change all that. Some hope exists for a more dovish Fed given the lower GDP and softening core PCE (Inflation).
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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.