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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Growth stocks puffed out their chest this last week, but was it all in vain?
Monday S&P 500 – | NASDAQ –
Happy Rebellion Day!
Tuesday S&P 500 0.16% | NASDAQ 1.75%
The equity markets shifted dramatically to open the week. As it did the previous Friday, markets started the day in the red and clawed their way out. Investor sentiment was signaling a more growth friendly environment. This was because commodities continued to move lower, causing less and less concern around inflation. This would potentially mean a less aggressive Federal Reserve Bank (FRB). Growth stocks led on the day as a result.
Wednesday S&P 500 0.35% | NASDAQ 0.35%
Markets gained on the day, but it wasn’t until the final hour of trading that things moved into the green. Inflation driving commodities continued to tick lower. The FRB minutes from their last meeting came out on Wednesday. Nothing shocking was contained therein. It was just an over-abundance of inflation references and an FRB willing to do anything to eliminate the inflation threat.
Thursday S&P 500 1.50% | NASDAQ 2.28%
The climb resumed on Thursday as growth led the way higher. This came even as oil rose 3.83% on the day. The climb signals persistence to inflationary pressures. Trading may have been looking ahead at the jobs report due out Friday.
Friday S&P 500 0.08% | NASDAQ 0.14%
Friday was Jobs Day. The participation rate slipped a little; private nonfarm payrolls increased by 381K and the unemployment rate held steady at 3.6%. The job adds for the month were more than 100K higher than expected, showing continued health in the jobs market. This clears the path for the FRB to continue aggressively attacking inflation. On a sad note, Former Prime Minister of Japan, Shinzó Abe, was assassinated overnight. We send our prayer to Japan and all those personally touched by his loss!
Conclusion S&P 500 1.94% | NASDAQ 4.56%
Markets gained ground on the week, led decidedly by the battered growth markets. On the surface this appears as good news. Truly, this may be a signal of mounting concerns that the 2nd quarter will reflect negative growth for the economy. This would result in the classic definition of a recession. It means that the hawkish FRB goal of 3.5% fed funds rate by year end, may prove too lofty, which has pushed growth stocks higher. Ultimately, volatility should be expected as we come to the 2nd quarter GDP reading at the end of the month.
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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.