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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After three weeks of loss, the S&P 500 eked out a gain for the week. Is there more to come?
Monday
Markets surged ahead on Monday attempting to make up ground from the last few weeks of declines. The S&P 500 rose .95% on the day. The Nasdaq led the way higher as it rose 1.4%.
Tuesday
Housing ruled the day for the markets on Tuesday. Markets ended the day mildly lower than they began. Elevated home prices (13.9% increase) and reduced new home sales (-5.9%) contributed largely to sentiment on the day.
Wednesday
The Russell 2000 (small cap stocks) led the way in gains for the day (2%). The major indices rose mildly for the day as it was a light economic calendar leading up to Thursday’s jobs data.
Thursday
Economic data was strong on Thursday, but the market reaction was tepid. Core durable goods increased more than expected and last months figure was revised to double the previous estimate. Weekly initial jobless claims data improved and remains under 500K for the fourth week in a row. It reached a post pandemic low of 404K this week.
Friday
Core Personal Consumption Expenditures (PCE) index rose to 3.1% YoY in April. This is the Federal Reserve Board’s (FRB) preferred measure of inflation. It gives us insight into how the FRB may react with rates. Michigan Consumer Sentiment fell to 82.9 for May. These data points led the S&P 500 higher for the day by 0.08%.
Conclusion
The S&P 500 staged a bit of a rebound this week. Between favorable jobs data, durable goods data, and a housing market that is seeing plenty of demand the reflation trade is well under way. The difficult thing will be for it to live up to expectations as it unfolds. This week, however, it did as the S&P 500 managed to gain 48.25 points and is up 11.93% year to date.
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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.