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.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.
The Federal Reserve would like to hike at a fever pitch. What did last week tell us about their ability to do so?
Monday S&P 500 2.95% | NASDAQ 3.62%
The weekend yielded enough negative news to give us a red Monday. Continued failure of ceasefire agreements spells uncertainty, which the market loves… More and more companies are coming out against Russia’s actions, resulting in more supply chain issue expectations. Interestingly, yields rose with the market fall. This was as a result of inflation concerns that would stoke the need for additional Federal Reserve Board (FRB) action.
Tuesday S&P 500 0.72% | NASDAQ 0.28%
The United States announced an embargo on Russian oil imports. Meanwhile, actions out of Europe were more measured. The UK announced a phase out, while the EU announced a 2/3 reduction by year end. Markets travelled between green and red all day, but one thing was consistent: the NASDAQ outperformed the S&P 500. This marks a deviation from recent norms.
Wednesday S&P 500 2.57% | NASDAQ 3.59%
In a stark contrast to the first few days of the week, Wednesday surged greatly. The move represents investor fears that inflation will persist, and the FRB will be able to do little about it. The inflation source will be fuel/food, which will erode consumption: the same net effect of an FRB raising interest rates. Bottomline, when you are spending on gas, you are less likely spending elsewhere.
Thursday S&P 500 0.43% | NASDAQ 0.95%
Investor sentiment was decidedly sour at the open as markets were down more than 1% at points. They rebounded late to cut losses. This happened in the face of a stalemate in talks over Ukraine. The driver was a statement by Putin that gave hope that oil shortages may not occur. He indicated that they would honor all energy commitments (even with countries that are not aligning with them). This brings hopes of contained inflation, which would keep from eroding consumer spending.
Friday S&P 500 1.29% | NASDAQ 2.17%
Markets spiked at open but faded throughout the day. Markets accelerated their losses into the close. Hurting confidence from the start of the session was weakening Consumer Sentiment. It had fallen to the low 70’s when the pandemic began, but it is now projected into the high 50’s. This is a level not seen since mid-2011, when the US breached the debt ceiling. Additionally, energy prices provided pressures to the market concerning investors that inflation would remain pervasive. The see-saw around oil prices will continue to drive investor sentiment until more certainty is known about Ukraine’s future.
Conclusion S&P 500 2.88% | NASDAQ 3.52%
The week looked much like the last several. The NASDAQ fell harder than the S&P 500 as inflation concerns make an FRB rate hike all but certain. This would mark the second lift off for the FRB over the last 7 years. During the last rate hike environment, the FRB increased the rate from 0.0% to 2.25% – 2.5%. The move took four years to happen. This time it is expected by many that the FRB would make that same progress in about one years’ time. This is why the aggressive repricing of stocks occurred at the start the year. Investors are pricing in the impact higher rates will have on earnings. Realistically, headline risk evolves and may cause reason for pause over time. FRB progress to 2.5% would likely take two years given headline risks.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
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.