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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Markets were green as earnings season got under way last week. Should we expect this to continue?
Monday
There was very little market data released on Monday. Markets were little changed on the day as the S&P ended in the red by .81 points and the NASDAQ was 0.4% lower.
Tuesday
CPI data rose to 2.5% YoY, the highest level since 2018. As of late, this would have led markets lower. A pause in the Johnson & Johnson vaccine actually caused concern of a slowdown in re-opening. This left the markets room to run higher as future inflation expectations moderated.
Wednesday
Markets floated in the green most of the day as earning season got underway. They slid near the close as jubilee over reduced risk of inflation was viewed as overdone the prior day. Rates rose on the day affirming the inflation trade.
Thursday
Retail Sales and initial jobless claims boosted the markets at the open. That surge held through the close with NASDAQ leading growth on the markets. Initial jobless claims fell to 576K, the lowest level since the start of the pandemic. Retail sales were expected to grow 5.9%, a healthy rise, however they grew by 9.8%!
Friday
Markets rose on Friday to end the week. The rise allowed all three indices to end the week in the positive. Leadership was in the S&P 500 on the day, resuming the re-inflation trade.
Conclusion
The S&P 500 gained over 1% for the week as earnings got underway. Financial companies led the way and impressed on earnings. Expectations will likely rise for them as long-term interest rates have been on the rise. Economic data for the week was generally positive and received as such. This past week was good measure of expectations for this earnings season!
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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.