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Another winning week as earnings roll in

The stock market had another winning week.

The S&P 500 closed 2.9% higher than last Friday, logging its ninth-straight win at the end of the week. The Nasdaq Composite was 3.4% higher than Friday's close and the Dow Jones Industrial Average registered a 3.0% gain. 

Factors contributing to the inclination to buy included:

  • Optimism around the trade war situation after China suggested that it is leaving the door open for trade talks with the U.S.
  • Positive responses to earnings from Microsoft, which increased 11.1% from last week, and Meta Platforms, which increased 9.1% from Friday
  • Momentum after S&P 500 surpassed its 50-day moving average (5,582)
  • Reacting to the March Personal Income and Spending Report, which showed a nice 0.7% jump in personal spending and unchanged readings for both the PCE and core-PCE Price Indexes on a month-over-month basis, and the April Employment Situation report, which showed a 177,000 increase in nonfarm payrolls and a 4.2% unemployment rate
  • Apple was left out of the rally, dropping 1.9% this week following its earnings report and Amazon received a muted response to its earnings results, settling 0.5% higher than last week. 

The broad advance left ten of the 11 S&P 500 sectors higher. The technology (+4.0%), communication services (+4.2%), and industrial (+4.3%) sectors were the top performers. The energy sector was alone in the red by Friday, dropping 0.7%. 

There's still some headwinds in play, though. Some economic data is weakening, keeping fear about a recession part of the market narrative. 

The April Consumer Confidence Index slumped to 86.0 (Briefing.com consensus 88.3) from 93.9 in March, pulled down by the lowest reading for the Expectations Index (54.4) since October 2011; meanwhile, average 12-month inflation expectations jumped to 7.0% from 6.0%, hitting their highest level since November 2022.

Market participants were also digesting a relatively soft initial jobless claims number, along with another contractionary reading in the ISM Manufacturing Index in April (i.e., a reading below 50%), and a Q1 GDP report that triggered some stagflation worries with real GDP down 0.3% and the GDP Price Deflator up 3.7%.

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Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Data and rates used were indicative of market conditions as of the date shown and compiled by Briefing.com. Opinions, estimates, forecasts, and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. S&P 500 Index is a market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market. Each company’s security affects the index in proportion to its market value. NASDAQ Composite Index is a market value-weighted index that measures all NASDAQ domestic and non-U.S. based common stocks listed on the NASDAQ stock market. Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Russell 2000 Index measures the performance of the smallest 2,000 companies in the Russell 3000 Index of the 3,000 largest U.S. companies in terms of market capitalization. MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

Park Avenue Securities LLC (PAS) is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian). PAS is a registered broker/dealer offering competitive investment products, as well as a registered investment advisor offering financial planning and investment advisory services. PAS is a member of FINRA and SIPC.

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6974283.33 (Exp. 08/25)

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