What we learned last week:
“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” – Henry Ford
Markets expanded their bull run last week with the benchmark S&P 500, Down Jones Industrial Average, and tech-heavy Nasdaq surging 4.55%, 3.19%, and 6.84% respectively, pushing two of three indexes to new record highs.
After negotiations between the US and Iran in Islamabad stalled a US blockade of maritime traffic at the Strait of Hormuz caused oil prices to jump above $100 barrel. Markets ignored the news and plowed ahead, the Nasdaq’s advance Monday was its ninth straight session higher.
Staying with the war in Iran, investors appear confident the events won’t derail a U.S. economy still riding the tailwinds of AI spending. Oil prices plunged 12% after Iran says the Strait of Hormuz is open and stocks bounced higher with the S&P 500 and Nasdaq logging three straight days of new record highs from the steps toward easing US-Iran war tensions.
Moving on to earnings, a look at last week’s earnings reports from the largest U.S. banks, we see a resilient economy amid a complex set of risks. Specifically geopolitical tensions and wars, energy price volatility, trade uncertainty, large global fiscal deficits and elevated asset prices.
According to JPMorgan’s CEO Jamie Dimon, higher gas prices haven’t yet hurt consumer spending (gas is relatively a small component of consumer spending).
Furthermore, banks have benefited from the market volatility, growing revenue in trading activities and an improved environment for corporate dealmaking. One item which will continue to be on the radar of investors are banks risk exposure to private credit.
Wrapping up with prices and concerns over inflation risk, markets welcomed last week’s Producer Price Index (PPI) report for the month of March. Producer prices rose in March but were considerably less than expected given the spike in energy prices, another tailwind helping lift stocks.
Markets will likely continue to move on events from US-Iran tension. Earning reports from dozens of S&P 500 companies in various sectors and industries will also have the attention of investors with expectation for strong growth priced in.
What’s ahead this week:
Economic Events
- Quite week, retail sales will be in the spotlight as consumer spending is a critical factor in economic growth
Earnings
- Second-quarter earnings are in full swing with S&P 500 companies across several sectors and multiple industries reporting this week
- Aerospace & Defense
- GE Aerospace
- RTX Corp
- Northrop Grunman
- Boeing
- Lockheed Martin
- AI Data center contributors
- GE Vernova
- Vertiv
- Intel
- Mag 7 company Tesla
- Aerospace & Defense
My goal is for you to feel educated and informed about variables we do and don’t have control over and find ourselves working within. I hope to do it in an informative and relatable way. As always, I value your relationship and planning objectives – my door is always open for conversation.
