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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You been quiet quitting behind my back, Bobby? Find out what it is and why it is the devil!
Monday S&P 500 0.70% | NASDAQ 1.00%
The hit from Friday continued into Monday. Yields in the short-term market continued to rise reflecting higher expectations of a Federal Reserve Bank (FRB) rate that is sustainably higher.
Tuesday S&P 500 1.10% | NASDAQ 1.10%
Markets opened in the red on news that Taiwan fired missiles at a Chinese drone. JOLT’s job opening rose in July and that supports the FRB path higher on rates. The added economic strength hurt equity markets.
Wednesday S&P 500 0.78% | NASDAQ 0.56%
Equity markets moved to the south Wednesday… again. The hangover from the Friday FRB speech continues to rattle markets. The end result of August was a down month even after markets grew nicely in the first half. Interestingly, Tech outperformed and oil prices were down. These both reflect a view of a less aggressive FRB.
Thursday S&P 500 0.30% | NASDAQ 0.26%
September started in the green, at least for the S&P 500. Tech stocks and commodities fell on the day. The stocks that were green tended to be healthcare and consumer staples. The move was decidedly defensive.
Friday S&P 500 1.07% | NASDAQ 1.31%
Happy Jobs Friday! The unemployment rate rose to 3.7%. The increase was deceptive however, as the economy added over 300K jobs, in line with expectation. The reason for the rate increase was that participation rose. This created more of a gap between those looking for work and those employed. This is actually good news. Lately good news for the economy has been bad news for the market and that held true on Friday.
Conclusion S&P 500 3.29% | NASDAQ 4.21%
Inflation, inflation, inflation… One factor that contributes to the inflationary story is the employment rate. However, there is a new factor at play that makes the unemployment rate not quite as reliable. Quiet quitting… This is where an employee does just enough of their job to not get fired. Meanwhile they look for other work or even try to start their own business. While this might seem like a small problem, productivity is suffering. Productivity has been erratic lately, measuring worse in the last two quarters than it has since the Financial Crisis. This is a problem because as an employee does less work, they are effectively increasing their wage for the services rendered. This has an inflationary effect. The new economy may be less about going and asking your employer for a raise (which leads to embedded inflation) and more about doing multiple jobs half insert expletive… This creates an inflation that we don’t account for. It also implies an underlying health to economic spending that we currently cannot measure.
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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.