Markets built on last week’s progress as earnings continue to show strength. Will growth stall or is the economy gearing up for the next expansion?
Monday
S&P 500 0.06% | NASDAQ 0.10%
Following a strong week of gains, the new week started off flat as earnings continued to roll in. No major news headlines rocked the boat which was a welcome sight to see.
Tuesday
S&P 500 0.58% | NASDAQ 0.55%
Consumer confidence fell in April but that didn’t stop markets from edging higher on the day. Job openings fell in March and GDP forecasts for the 1st quarter continue to look glum.
Wednesday
S&P 500 0.15% | NASDAQ 0.09%
Another flat day even with the preliminary results of 1st Quarter GDP falling for the first time since 2022. Estimates projected a reduction but not to the level of a contraction. The data point was attributed to the front run by companies on imports.
Thursday
S&P 500 0.63% | NASDAQ 1.52%
Big news from two of the Magnificent 7 stocks came out following better than projected earnings for Apple and Amazon. Both companies provide a finger on the pulse of the consumer and there appeared to be less slowing than expected.
Friday
S&P 500 1.47% | NASDAQ 1.51%
The big data release on the week hit on Friday. Nonfarm Payrolls (jobs added outside of farming) showed a higher-than-expected hiring spree for the month of April.
Conclusion
S&P 500 2.92% | NASDAQ 3.42%
In an ever-changing economy, GDP and unemployment each contribute to growth forecasts through their individual trends. We received insight into both this week and they provided two different perspectives of the direction of the economy. On one hand, GDP has slowed and even achieved status of a contraction (versus expansion) for the first time in 3 years. On the other hand, employers added more jobs than expected and more jobs were added in March and April of this year than in January and February. The tariff concerns weigh heavily on decision makers on whether labor costs will impact profitability. The data, however, shows a wait-and-see approach may be unfolding. Over the past few years, employers have hired a workforce that they are not so quickly looking to let go. They may be weathering the tariff storm to maintain their trained workforce until they come out the other side. Either way, GDP slowing is part of the economic cycle and the most recent reading for the 1st quarter was slightly in the red. This will be closely watched as we progress into the 2nd quarter.
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