What we learned last week:
“Sometimes when you win, you really lose, and sometimes when you lose, you really win, and sometimes when you win or lose, you actually tie, and sometimes when you tie, you actually win or lose. Winning or losing is all one organic mechanism, from which one extracts what one needs.”
– Gloria Clement [to Billy], White Men Can’t Jump, 1992
Investors looked past the stalemate in Iran, betting on a resolution in the Middle East and a world that can’t go on much longer with a closed Strait of Hormuz. Markets navigated volatile oil prices and treasury yields to finish the week higher as the Dow posted a record close going into the long holiday weekend.
Market sentiment swung back a fourth with the outlook for oil prices and the potential for an inflationary shock that put pressure on stock prices and bond yields. Ultimately, optimism grew last week around a possible framework for peace between the U.S. and Iran.
The market’s focus mid-week turned to the first quarter earnings results and outlook from the AI chip leader Nvidia. Both results and outlook exceeded expectations, though the stock finished lower as investors weighed how much steam is left in the AI sectors historic rally.
Sticking with earnings but shifting to the economic backbone, the U.S. consumer, Walmart issued a worse-than-expected financial outlook on Thursday. Citing higher fuel costs, the report raises questions about the health of the U.S. consumer.
Last week was a quit one for key economic indicators. Worth noting, the already struggling housing market continued to signal difficulty. Mortgage rates jumped above 6.5% last week and the U.S. Census Bureau reported Thursday single-family housing starts in April fell 9% from March and 2.4% from a year ago.
New home sales will be in this week’s headlines, more of a focus will be on Friday’s PCE inflation data. The holiday shortened week will have plenty of first-quarter earnings reports to digest from notable retailors and a fair share of tech companies – both vital growth sectors to the U.S. economy.
What’s Ahead This Week
Economic Events
- Durable goods orders will be viewed as an indication of consumer and commercial health
- New home sales are in focus as the sector struggles to grow
- First quarter GDP, revision number two, will be out and an indication of economic growth
- Personal Consumption Expenditures, the Federal Reserves preferred inflation gauge, takes data from the GDP report to measure spending and price changes
Earnings
- First quarter earnings have largely wrapped up.
- Costco is one company to watch this week as their outlook on the consumer will carry weight
- AI mega-trend companies reporting:
- Dell Technologies
- NetApp
- Marvell Technology
- Snowflake
- Other retail companies
- Dick’s Sporting Goods
- Burlington Stores
- Dollar Tree
- Gap, Inc.
- Best Buy
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.
