The end result of the week was green, but was there reason for it and does it tell us anything for this week?
Monday S&P 500 1.03% | NASDAQ 1.19%
Eleven major companies reported earnings, with one missing expectations. Much of the movement on Monday came as an extension of the Friday rally. A move based on the weaker than expected jobs report. Growth stocks outperformed as lower interest rates would carry a greater impact on their performance.
Tuesday S&P 500 0.13% | NASDAQ 0.10%
Twenty-three major companies reported earnings, with two missing expectations. Markets were little changed on the day. While stock stood steady, fixed income yields did slip on Tuesday. In general, this is a continuation of the last few days.
Wednesday S&P 500 0.00% | NASDAQ 0.18%
Fourteen major companies reported earnings, with three missing expectations. Mortgage rates slipped a little lower as rate hike expectations faded. The 10-year treasury rate, to the contrary, rose slightly on the day. This was a reversal of a recent trend. Not a notable enough increase to think that sentiment has changed.
Thursday S&P 500 0.51% | NASDAQ 0.27%
Eleven major companies reported earnings, with three missing expectations. Initial jobless claims came in higher than expected, but still at a muted level. The jobs data brought markets out of their two-day coma. Employment data is showing signs of softening. The hope is the Federal Reserve Board (FRB) will start getting the signals needed to start cutting rates.
Friday S&P 500 0.16% | NASDAQ 0.03%
Michigan Consumer Sentiment is projected to fall to 67.4 in May. If that holds true, it will be the lowest reading since August of 2023. This was a period where fears were high that a recession was on the horizon. The lack of earnings data and the weaker potential sentiment sent markets higher. Again, weakness is a signal of potential FRB moves.
Conclusion S&P 500 0.55% | NASDAQ 1.43%
Markets advanced for the week, albeit with little decisiveness. Market growth has all but stalled as more data is needed to entice investors. Last week’s message was clear from the FRB; they do not expect that their next move will be a hike. The focus is on the timing of a cut. Earnings data will slow down next week; however, inflation data will be in focus. It should give investors a better read on potential rate cuts later this year.
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Markets were little changed, but there was plenty of data. So, why did it feel like a ‘nothing to see here’ kind of week?
Monday
The markets were little moved on Monday. They are awaiting bigger news later this week as earnings season has its first test with 180 companies reporting. The S&P 500 rose 0.2% for the day.
Tuesday
The day was consistently painted in the red but ended at about breakeven. It ended only 0.90 points to the south when everything was said and done.
Wednesday
Markets were little moved for the day. Much of the day was spent waiting. First, for the Federal Reserve Board (FRB) to announce any potential changes (there were none) and second, for after-hours earnings. As a result, there was little movement on the day.
Thursday
The day started strong on the back of earnings data. GDP data released showed the US economy expanded at a rate 6.4% for the first quarter. Markets opened in the green 0.82%, they then faded to even mid-day. At the close the S&P 500 was 0.68% higher.
Friday
Markets waivered on Friday giving back all the profit from Thursday. Economic data was not the harbinger of this fall. Consumer confidence reached 88.3, above expectations.
Conclusion
I took a risk with naming the article ‘Nothing to see here.’ So those of you still reading, thanks! This was a busy week, 180 earnings announcements, an FRB decision, and a hotly awaited GDP release. For all of the turbulence that was expected, the S&P 500 moved literally 1 point! While it seems like a meaningless week, it was not. The earnings data and GDP data impressed as expected. Since goals were so high, there was a larger risk of market underperformance. Basically, the economy needed to live up to expectations and it did just that.
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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.