Markets sold consistently across the week. Is there more red to expect in coming weeks?
Monday S&P 500 1.20% | NASDAQ 1.79%
Happy Tax Day! Retail sales expanded more than expected in March. Three major companies reported earnings, all three met expectations, all of which were financials. This was not surprising as financials usually head up earnings season. They also give us a good indication of how earnings season should go. Retail sales, however, took center stage as a strong consumer reduces the need for Federal Reserve Board (FRB) rate cuts. This caused an outsized move downward as investors anticipate less stimulus for 2024.
Tuesday S&P 500 0.21% | NASDAQ 0.12%
Housing data for March came in weaker than market expectation. Ten major companies reported earnings, with two missing expectations. Although mild, the losses continued. FRB Chair Powell indicated that inflation’s recent strength does not give the board confidence to start easing policy.
Wednesday S&P 500 0.58% | NASDAQ 1.15%
11 major companies reported earnings on the day, with three missing expectations. Focus was squarely on earnings as there was little economic data on the day. Tech stocks took a hit as AI chip orders for a specific company did not meet expectations. As would be expected this hit the tech heavy NASDAQ harder than the S&P 500.
Thursday S&P 500 0.22% | NASDAQ 0.52%
Initial unemployment claims remain benign. Existing home sales also slowed in March. 11 major companies reported earnings on the day, with one missing expectations. Markets were down for the day, but in a less dramatic fashion. Robust employment data typically is not favorable information when hoping for an FRB rate cut (as investors are).
Friday S&P 500 0.88% | NASDAQ 2.05%
Six major companies reported earnings on the day, with one missing expectations. NASDAQ led the way lower as Tech and communications got hit hardest. The best performers on the day were defensives, like utilities, healthcare, staples, and also financials.
Conclusion S&P 500 3.05% | NASDAQ 5.52%
The week was bloody. There was not a single up day for the S&P 500 or the NASDAQ Composite. The moves were not founded in fundamental data, as earnings did well. Some forward guidance shows warning of slowing revenues throughout the year, but that is normal for the last two years. Economic data, which signals the economy is doing well, has actually pushed stocks lower. The stronger the economy, the less likely the FRB is to act in reducing rates. The sell-off has extended to approximately 6%. It may take a breather in the coming days but expect that we are not done.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.
Markets rose steadily all week. Does this bode well for the summer months, or should we be concerned?
Monday
Markets were mostly up on Monday. Investor sentiment was buoyed by an announcement from the largest US banks. They announced that they will resume dividends as the Federal Reserve Bank (FRB) has lifted the moratorium.
Last year’s stress test result in healthy balance sheets, however, to be safe, the FRB had Banks suspend dividends. After this year’s stress test the FRB announced a return to dividends would be permitted.
Tuesday
The S&P 500 rose to an all-time high again on Tuesday, albeit a meager gain. In a continuation from Monday the Small Cap markets again shed weight while the large indices continued to gain. CB Consumer Confidence unexpectedly jumped to a pandemic high of 127.3.
Wednesday
The S&P 500 continued its record setting gains on Wednesday. Pending home sales jumped in June, however there are underlying indicators showing the housing market is slowing down.
Thursday
The fresh record highs each day continued for the S&P 500. The S&P was not alone as all major indices pointed north on Thursday. There was much optimism on the job front as early data looked good. Friday brings the full jobs report.
Friday
Markets jumped on Friday. The S&P 500 rose 0.8% on the day, with only the Small Cap markets retreating. While the unemployment rate crept up in June to 5.9% (from 5.7%), the private payroll adds were impressive. The increase in the unemployment rate post-recession is not surprising. Those who were not looking for work begin to rejoin the job market and increase this measure of unemployment.
Conclusion
Markets rose nicely for the week. The S&P 500 gained 71.64 points, or 1.67% on the week. More impressive was perhaps the sustained run of growth across the entire week. Although early in the week the movements were modest the sustained upward trend is a positive signal for investor mentality. The struggle is that we are moving into the summer months where volumes tick down and volatility can tick up.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.