Stocks notched a solid gain last week as rate-cut expectations paced the rally as the Q1 earnings season wound down.
Stocks Climb Steadily
Monday opened with stocks picking up where they left off the prior Friday. Stocks were still basking in the afterglow of fresh jobs data, which eased investor concerns of an overheating economy. That and reports of a possible Middle East ceasefire fueled Monday’s rally.1
Stocks hung out in a narrow trading band Tuesday and Wednesday, yawning at the sparse economic news and a handful of negative earnings results. By contrast, the Nasdaq edged lower over those two days.2,3
On Thursday, the S&P 500 closed above 5,200 for the first time since early April. The next day, stocks rallied, and the Dow clinched its eighth consecutive day of gains, the longest winning streak since December and its best weekly performance this year. Fresh data showed consumers continue to have inflation concerns for the year ahead, which was unsettling.4,5
| Source: YCharts.com, May 11, 2024. Weekly performance is measured from Monday, May 6, to Friday, May 10. ROC 5 = the rate of change in the index for the previous 5 trading days. TR = total return for the index, which includes any dividends as well as any other cash distributions during the period. Treasury note yield is expressed in basis points. |
Jobs Market Shows a “Goldilocks” Outlook
Jobs data from the past few months have shown unemployment levels remain low while job growth stays strong—but not too hot.
And last week’s Conference Board’s employment trends index for April projected slower jobs growth in the second half. The markets all year have responded well when the “Goldilocks” outlook suggests that economic indicators are “just right.”6
This Week: Key Economic Data
Monday: Fed Official Loretta Mester Speech.
Tuesday: Producer Price Index. NFIB Small Business Optimism Index.
Wednesday: Consumer Price Index. Retail Sales. Business Inventories. Fed Official Neel Kashkari Speech.
Thursday: Housing Starts. Jobless Claims. Industrial Production. Import & Export Prices. Fed Official Speeches: Patrick Harker, Raphael Bostic.
Friday: Leading Indicators.
Source: Investors Business Daily – Econoday economic calendar; May 10, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: The Home Depot, Inc. (HD)
Wednesday: Cisco Systems, Inc. (CSCO)
Thursday: Walmart Inc. (WMT), Applied Materials, Inc. (AMAT), Deere & Company (DE)
Source: Zacks, May 10, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
1. The Wall Street Journal, May 10, 2024
2. The Wall Street Journal, May 7, 2024
3. The Wall Street Journal, May 8, 2024
4. CNBC.com, May 9, 2024
5. The Wall Street Journal, May 10, 2024
6. The Wall Street Journal, May 10, 2024
7. IRS.gov, December 5, 2023
8. Healthline, January 24, 2023
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
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