 | AUTHOR: Jason Roque, CFP®, APMA®, AWMA® TITLE: Investment Adviser Rep – CCO TAGS: S&P 500, NASDAQ, Retail Sales, Housing, Earnings, Tech |
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.
It was a wild ride last week. As it came to a close, markets were pointing north, but will this endure?
Monday
Markets opened the week sharply lower on Monday, with all major equity indices losing around 2% on the day. This brings the S&P 500 fall from peak, now 4.5%. This came as concerns worsened that a default by China’s Evergrande was likely on Thursday.
Tuesday
The S&P 500 came out of the gates hot as buyers attempted to ‘buy the dip’. This did not last though as markets faded into the close and the S&P 500 managed to end breakeven. Typically, it is a good sign to see investors buy back half the losses from the prior day. As it shows a purchasing appetite. That lack of appetite may be a waning after a summer of feasting.
Wednesday
Markets rose beyond VIX expectations on Wednesday. This came as Evergrande came to a deal that would help them avoid defaulting on Thursday. Additionally, the Federal Reserve bank (FRB) completed their two-day meeting. Dot plots show increased risk of rate increases in 2023. The FRB also announced that they will begin tapering later this year. In prior meetings they stated they will be discussing it, so this is a dramatic shift.
Thursday
The rise continued through Thursday as investors appeared to applaud the FRB’s effort to tighten monetary policy… Not a sentence I ever expected to write. What it does, however, is set expectations and create predictability.
Friday
The Markets ended the week mixed. The S&P 500 rose, however capping a very active week for the market. In what was a busy week for housing, we learned that new home sales rose 1.5% for August on Friday.
Conclusion
This last week started with a gash to the bottom line as markets opened the week sharply lower. Clawing its way back into the green, the S&P 500 actually rose by 22 points (or 0.5%) for the week. Regardless of how the numbers ended for the week, volatility is notably higher the last few weeks. We started the month at 16 and have ranged between 18 and 26 in September. The month is not over and more may be on tap as focus on the debt ceiling heats 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.