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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It was a quiet week for markets. Is this just the calm before the storm, or should we expect this to continue?
Monday
Markets were little changed on Monday. Literally the S&P 500 fell 0.05 points on the day. Oil occupied attention on the day as OPEC+ did not agree to increase production. This will likely leave us with elevated fuel prices for some time. In response, the US is considering releasing some strategic reserves to ease prices slightly, but no action was taken.
Tuesday
Retail sales dominated focus on Tuesday as they jumped a surprising 1.7% in October. This led to a buy sentiment among investors as the S&P 500 gained 0.38% on the day. This was either a sign of things to come or people getting ahead of anticipated inventory shortages this holiday season. To be determined…
Wednesday
Inflation concerns were stoked on Wednesday as oil inventories shrank when they were expected to expand. The S&P 500 contracted 0.26% on the day as those fears were in focus.
Thursday
All that was lost on Wednesday was recaptured on Thursday. Jobs data released showed that once again the pandemic job market is improving. Initial jobless claims fell to 268K, the lowest since the start of the pandemic. More importantly, on-going claims have fallen to 2.080M, again another low. The pre-pandemic level was roughly 1.7M.
Friday
COVID closures dominated the headlines and the market on Friday. With no economic data reporting on Friday, the focus was squarely on Austria. COVID closures may become more prevalent in coming weeks as colder weather sets in on Europe. Markets slipped, but not hard. The S&P 500 dropped 0.13% on the day.
Conclusion
The S&P 500 gained 0.32% on the week. Not a particularly interesting week, however, expect the volume on trading to ratchet up after the upcoming holiday. The debt ceiling still needs resolving by December 3rd. Unfortunately, rather than being resolved in the 11th hour, this may push out days passed that deadline. The treasury projects that they have the funds to keep the lights on till 12-15-21. We may see political wrangling until closer to that date. That wrangling will likely cause market volatility.
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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.