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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Weakness persisted in the market across last week. Is this a trend that will likely continue or a soft patch in data?
Monday
Happy President’s Day!
Tuesday
Markets were flat to open the week. This was not the case for the energy sector, however, as energy added 2.51% on Monday. Much of the energy move came from the harsh winter storm and elevated energy usage information that should follow. Financials and communications were the only other sectors in the green for the day.
Wednesday
The day started lower and spent the trading day pulling out of the hole. It ended the day even. There was unexpected strength in producer prices (a leading indicator of inflation), retail sales, and capacity utilization (an indicator of corporate production).
Thursday
Much like Wednesday, Thursday opened in a hole and spent much of the day climbing out. Markets did not make it all the way out, however. Housing data and jobs data were both in focus. Building permits rose more than expected, however new starts decreased substantially. Jobless claims, a major focus right now rose more than expected. The weakness of data led to a softer market for the day. As of late this would have caused a market rise as it would have increased the likelihood of stimulus. Perhaps that is a foregone conclusion at this time.
Friday
Services data and existing home sales both impressed for Friday. Markets opened in the green but were unable to hold the momentum. They faded to breakeven and fell into the red to end the week. Signaling an indication of concern for the weekend news cycle.
Conclusion
Investor behavior throughout the week seemed to signal initial concerns, but with persistent buying. Across the week markets ended up shedding 0.72%. This was not much of a move. Buy sentiment persisted even in the face of weak economic data last week. Overall data has shown to be improving quicker than expected. This should lend itself to a continued rally.
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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.