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Kuby’s Commentary

Nothing Else Matters

May 6, 2024

Last Week

A pair of “magnificent” earnings reports, somewhat dovish Fedspeak, and soft jobs data combined to form a winning hand for Wall Street. Following volatile trading Monday through Thursday, a powerful rally on Friday moved all the equity markets out of the red to post back-to-back weekly gains, sending investors into the weekend in better spirits.

As expected, the Federal Reserve left rates unchanged at its latest monetary policy meeting on Wednesday. Still, the tone was more dovish, and the Fed announced an easing of the quantitative tightening from the run-off of the Fed’s balance sheet. Perhaps more significant was the April nonfarm payrolls report on Friday, which showed that U.S. employers added a seasonally adjusted 175,000 jobs, far less than in March when gains exceeded 300,000 and also below the 240,000 economists had expected. The unemployment rate ticked up to 3.9% from March’s 3.8%, and wage growth slowed to 3.9% from a year earlier after rising 4.1% in March. In Goldilocks parlance, it was not too hot or cold, which should bolster the bull case for lower interest rates and a steady economy.

It was also a busy week for earnings reports, with Amazon and Apple being the two most notable names that reported their results. Both companies delivered solid results, and Apple announced a $110 billion stock buy-back program. The earnings news was positive across multiple sectors, with the blended growth rate for the first quarter increasing to 5% from 3.5%. Additionally, the estimates for second-quarter earnings were also increased. We note that it is unusual for the following quarter’s earnings estimates to increase during the reporting season, providing another rationale for a healthy equity market.

For the week, the S&P 500 added 0.6%, the Nasdaq Composite climbed 1.4%, and small caps topped the leaderboard with a 1.7% jump in the Russell 2000. Bond investors also profited, with the yield on the 10-year Treasury declining 17- basis points to 4.5%. Commodity prices weakened as Crude oil prices dropped 6% and Gold slipped 1.4%.

This Week

It’s the final innings of earnings season, with 56 S&P 500 companies reporting results.

Fed officials will be back on the speaking circuit, which could prove interesting given the recent softer economic reports. Regardless of the rhetoric, we reference the 1992 Metallica ballad “Nothing Else Matters” in that future data reports will determine monetary policy.

On Friday, the University of Michigan will release its Consumer Sentiment Index for May, with a consensus estimate calling for an unchanged reading from April’s level of 77. The index has been trending higher since reaching an all-time low in early 2022 when the Fed was commencing its historic increases in short-term rates.

We think sentiment could improve over the summer, particularly if gas prices at the pump drop and other inflationary items remain in check, finally allowing short-term rates to head lower.

April Stocks on the Move

+24% U.S. Silica Holdings Inc (SLCA) shares rose after it was announced Apollo Global Management would acquire the minerals company for $1.85 billion, or $15.50 per share.

+24% WK Kellogg Co (KLG) was up in April on no significant company news. It outperformed the broader Consumer Staples index.

+18% Quest Resources Holding Co (QRHC) was up in April on no significant company news. It outperformed the broader Industrials index.

+12% Boot Barn Holdings Inc (BOOT) gained during the month on analyst commentary that the Western Apparel company could see gains due to the popularity of Beyoncé’s country album, Cowboy Carter.

-21% Cracker Barrel Old Country Store Inc (CBRL) was down in April on no significant company news; additionally, the overall Restaurant industry has disproportionately suffered from high inflation and soft consumer trends. Our research team will be tuning in to a CBRL strategic update call for investors on Thursday, May 16th.

-21% Sphere Entertainment Corp (SPHR) slumped in April on no significant company news; however, two Wall Street analysts downgraded the stock to a Hold rating, citing the possibility of a few soft quarters.

-18% Allient Inc (ALNT) shares declined during the month on no significant company news.

-18% BGSF Inc (BGSF) shares declined during the month on no significant company news.

-18% Ethan Allen Interiors Inc (ETD) sank on an earnings and revenue miss for its fiscal third quarter. The period was marked by slower Wholesale performance from lower Municipal and Government sales. The company, which is a reliable dividend payer and raiser, remains cautiously optimistic about the rest of the fiscal year due to its improved operating structure, technological advancements, and consumers refocusing spending on the home.

-17% Hamilton Beach Brands Holding Co (HBB) was down in April on no significant company news.

The stocks mentioned above may be holdings in our mutual funds. For more information, please visit

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