Last Week’s Summary
- S&P 500 Index rose 0.56%
- International Equities rose 1.61%
- Emerging Markets rose 2.01%
- U.S. 10-Year Treasury Yield fell to 4.50%
- Initial Jobless Claims fell to 208k
- FOMC left rates unchanged at 5.25%-5.50%
- Change in Nonfarm Payrolls fell to 175k
- Unemployment Rate rose to 3.9%
What to Watch for This Week
- T, 5/7/24 Consumer Credit
- W, 5/8/24 Wholesale Inventories, MBA Mortgage Applications
- Th, 5/9/24 Initial Jobless Claims, Continuing Claims
- F, 5/10/24 U. of Mich. Sentiment, U. of Mich. 1-Year Inflation
Weekly Market Recap
Equities rose in their most significant rally, on Friday, since February, propelled by a notable deceleration in U.S. job growth that caused bond yields to plummet. This development reignited trader optimism for potential Federal Reserve interest rate cuts later this year.
On Friday, the S&P 500 surged by 1.3%, fueled further by Apple Inc.’s impressive post-earnings performance. The tech-dominated Nasdaq 100 also saw a robust climb of 2%. Reflecting the newfound confidence, Wall Street’s “fear gauge,” the VIX, descended to its lowest level in over a month.
Investor concerns about “stagflation” or a looming recession were assuaged by a jobs report that, while softer than anticipated, did not indicate a labor market downturn. Instead, it suggested a gradual economic slowdown, bolstering the case for a Fed responsive to evolving data.
This sentiment was reinforced by Fed Chair Jerome Powell’s remarks following Wednesday’s decision to maintain interest rates, where he hinted at a predisposition towards easing policy rather than tightening.
In a parallel development, unexpected contraction in the U.S. services sector for the first time since 2022 was reported on Friday. This decline was underscored by a business activity gauge slumping to a four-year low, coupled with a rise in input costs.
These mixed signals further underscored the delicate balance the Fed faces in navigating economic uncertainties while maintaining stability.
Download Market Snapshot May 6, 2024
Watch our Intro Video! Learn a better way to invest:
