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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The S&P 500 gained ground last week. Are markets calming down or should choppy waters be expected?
Monday
The week opened strong as the S&P 500 rallied 1.87% into the close. The fears around rate hikes subsided as the 10-year treasury yield fell slightly. Markets will be focused on Tech this week as they were a few weeks ago on financials.
Tuesday
The S&P 500 gained 0.69%, in what was pretty much a sideways day for markets. Expectations are pretty low for this month’s jobs report due out Friday the 4th. Concerns are mounting that the January report will be pretty disappointing as it will encompass the height of Omicron.
Wednesday
Markets rose on Wednesday aided by a strong earnings report from Alphabet (Google). Additionally, they announced a stock split which was received well by investors. The S&P 500 gained 0.95% on the day.
Thursday
Markets fell sharply on Thursday, surrendering the week’s gains. The S&P 500 ended up shedding 2.43%. Factory orders fell more than expected and while services outperformed expectations, they still fell sharply. A major driver on the day was earnings as Meta missed on earnings per share. This caused their stock to dive, taking communication stocks with it.
Friday
Happy jobs Friday! Markets loved the report. Not only was the data strong, but there were revisions for the last few months (an increase of 750K jobs). So much for Omicron putting a damper on job data. The S&P 500 ended up adding 0.52% on the day.
Conclusion
The S&P 500 gained 1.55% for the week. This was the best week for the S&P 500 so far in 2022. Not shocking, given recent volatility. The coming week’s economic calendar is light; however, the earnings calendar is loaded. Expect recent volatility to continue. Currently, 77% of companies have been beating estimates. Baring disruption, we should expect the markets to welcome the increased earnings data.
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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.