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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Is inflation showing signs of cracking? If so, what could it mean for market directions from here?
Monday S&P 500 1.86% | NASDAQ 1.59%
Equities rallied on a weaker dollar, making markets more attractive to international investors. Tariff relief was mentioned by the president to help inflation. The rise on Monday was the first in several weeks as the S&P 500 is riding a seven-week losing streak.
Tuesday S&P 500 0.81% | NASDAQ 2.35%
A retreat was in order on Tuesday as a negative earnings forecast from Snap sent markets lower. Interestingly, the low was not an entire erasing of yesterday’s gains. This is the first time in a while this has occurred. It may be a signal that we have seen the bottom… Just maybe…
Wednesday S&P 500 0.95% | NASDAQ 1.51%
Markets gained on Wednesday, marking the second day this week. Something that has also not happened in a while. The rise was partly attributable to the Federal Reserve Board (FRB) minutes. They indicated that the FRB expects to be flexible with their path given economic conditions. This opens the door to a more dovish FRB.
Thursday S&P 500 1.99% | NASDAQ 2.68%
The markets opened sharply higher and stayed there throughout the day. The catalyst was retail earnings data that impressed from Macy’s and Dollar General. Interestingly, strong earnings for Dollar General is more of an indication of the strong impact inflation is having on the consumer.
Friday S&P 500 2.49% | NASDAQ 3.35%
Markets surged into the end to the week. The gains amounted to a 6% week over week rise for the S&P 500. This jump could help the month of May end in the green (ever so slightly). A key piece of data released Friday morning was PCE data (inflation). It showed signs of a weakening, moving from 6.6% down to 6.3%. It may seem nominal, but year over year inflation does not move by big numbers.
Conclusion S&P 500 6.58% | NASDAQ 6.84%
The softening inflation data out on Friday was some of the most meaningful data from the week. Weaker inflation signaled that the more dovish FRB referenced on Wednesday may be a reality for markets. If that comes through, it could be fuel enough to cause a bit of a rally from this point.
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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.