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.
The S&P 500 gained ground last week. Are markets calming down or should choppy waters be expected?
Monday
The week opened strong as the S&P 500 rallied 1.87% into the close. The fears around rate hikes subsided as the 10-year treasury yield fell slightly. Markets will be focused on Tech this week as they were a few weeks ago on financials.
Tuesday
The S&P 500 gained 0.69%, in what was pretty much a sideways day for markets. Expectations are pretty low for this month’s jobs report due out Friday the 4th. Concerns are mounting that the January report will be pretty disappointing as it will encompass the height of Omicron.
Wednesday
Markets rose on Wednesday aided by a strong earnings report from Alphabet (Google). Additionally, they announced a stock split which was received well by investors. The S&P 500 gained 0.95% on the day.
Thursday
Markets fell sharply on Thursday, surrendering the week’s gains. The S&P 500 ended up shedding 2.43%. Factory orders fell more than expected and while services outperformed expectations, they still fell sharply. A major driver on the day was earnings as Meta missed on earnings per share. This caused their stock to dive, taking communication stocks with it.
Friday
Happy jobs Friday! Markets loved the report. Not only was the data strong, but there were revisions for the last few months (an increase of 750K jobs). So much for Omicron putting a damper on job data. The S&P 500 ended up adding 0.52% on the day.
Conclusion
The S&P 500 gained 1.55% for the week. This was the best week for the S&P 500 so far in 2022. Not shocking, given recent volatility. The coming week’s economic calendar is light; however, the earnings calendar is loaded. Expect recent volatility to continue. Currently, 77% of companies have been beating estimates. Baring disruption, we should expect the markets to welcome the increased earnings data.
~ 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.