Last Week
The stock market and the Chicago Cubs are setting records and on winning streaks, fueled by a stronger-than-expected U.S. jobs report, upbeat earnings, particularly from the Technology sector, and clutch hitting. The S&P 500 gained 2.7%, the Russell 2000 added 1.7%, while the Nasdaq Composite surged 4.5%. The yield on the 10-year Treasury slipped 2 basis points to 4.36%, while the US Dollar inched lower and Gold rebounded 2%. Advancing issues outnumbered declining issues by a factor of 5-4, although only the Technology, Consumer Goods, and Basic Materials sectors finished comfortably in the green. The Oil & Gas sector suffered a 5.45% loss, which matched the drop in Crude prices.
According to data released by the U.S. Bureau of Labor Statistics, non-farm payrolls grew by 115,000 jobs in April, and the unemployment rate held steady at 4.3%. On the other hand, consumer sentiment continued to decline this month, reaching a fresh record low as the war in Iran drags on, keeping gas prices elevated. The University of Michigan’s latest consumer survey, released Friday, showed sentiment fell early this month to a preliminary reading of 48.2, the lowest on records going back to 1952. The historical positive correlation between consumer sentiment and the stock market has evaporated over the last few years.
As earnings season reaches the final inning, results have been nothing short of spectacular with 27.7% year-over-year growth. Much of that growth continued to come from Tech stocks, as shares of Advanced Micro Devices surged 26.2% for the week after the semiconductor company announced stellar results and doubled its estimate for the size of the market over the next few years.
Meanwhile, the war in the Middle East continued, with murky prospects for peace and a daily flow of contradictory statements.
On the Chicago Sports Scene, the Cubs have taken the lead in the NL Central and are on a 15-game home winning streak. The Chicago Sky opened its season with an impressive win over the WNBA expansion team, the Portland Fire. Sports sentiment in Chicago is on the rise!
This Week
On Tuesday, inflation will be in focus, as the Bureau of Labor Statistics releases its consumer price index for April. Driven by higher energy prices, estimates call for the headline CPI to rise at its highest rate in the last 2 ½ years at 3.7%. If the actual number is higher, then the financial markets could react negatively.
Retail sales data later in the week will provide another read on consumer demand and the broader economic backdrop.
There was no measurable progress over the weekend in the peace negotiations, leading to higher oil prices and some weakness in equity prices in early Monday trading. Advances resumed a few hours into trading, led by Nvidia Corp, as well as energy and materials sectors.
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