What we learned last week:
“People will pay any price for motion. They will even work for it. Look at bicycles.” – William Faukner, The Reivers
Led by tech earnings, all three of the major stock indexes closed the week higher. Earnings reports from Big Tech companies provided a positive balance to renewed uncertainty around global oil supply.
Stock indexes posted their biggest monthly gain since 2020 this April hitting record highs and posting gains for the fifth consecutive week.
Tech stocks pulled back from Monday’s record highs on Tuesday as the Wall Street Journal reported, ChatGPT creator, OpenAI missed revenue targets. Additionally, the reporting went on to say there is internal concern about the pace of the company’s spending amid slowing growth and rising competition.
Concerns over the growth and profitability of a leading AI research and development firm were set aside with the quarterly results of Apple, Amazon, Google and Microsoft.
Investors were enthusiastic that large spending on AI is paying off with growth in profits from the big three cloud service providers, Amazon, Google, and Microsoft. The other Mag 7 company that reported earnings last week, Apple, raised revenue growth after reporting better than expected financial results on the back of improving iPhone 17 sales.
It’s wort pointing out, according to JPMorgan’s Weekly Market Recap, the tech sector was one of the worst performing sectors last week, implying investors are taking a stock specific approach to companies engaging in the AI mega theme.
In geopolitical and economic events there was no shortage of information for investors to digest.
The United Arab Emirates announced it would leave OPEC May 1st. Tehran’s attacks on shipping in the Strait of Hormuz have severely constrained the UAE’s ability to export oil.
The conflict in Iran continues to put pressure on oil and gas prices. The price per barrel finished the week above $100 and expectations among traders are that prices will rise.
Looking at the economy, interest rates were under the spotlight with a rate decision from the Federal Reserve and a Personal Consumption Expenditure (PCE) inflation report.
The Fed met expectations by holding interest rates steady. It wasn’t unanimous as four officials noted their disagreement on policy decisions.
Lastly, the Fed’s preferred inflation measure, PCE, was in line with estimates for the month of March, despite the sharp increase in oil prices. This eased investor concerns over inflation possibly preventing future rate cuts from the Fed.
This week, earnings and events in the Middle East will continue to be under the spotlight as investors will be looking for outlook and signs that higher costs of energy process are impacting corporate guidance for growth. We also get data on the labor market which will likely contribute to investors’ view of the country’s overall economic health.
What’s Ahead This Week
Economic Events
- Friday’s Non Farm Payroll and unemployment rate report for April from the Bureau of Labor Statistics will take center stage as the health of labor market is expected to carry most of the weight in any rate cut decision by the Federal Reserve.
- April’s Job openings (JOLTs) report on Tuesday will be another important indicator for the labor market
- Weekly jobless claims continue to be watched as an important indicator
- A check on price increases from ISM Services PMI
- Big week for the housing market with New Home Sales data on Tuesday
Earnings
- Software company Palantir, as of recently, has become an important Government contractor and rapidly growing its Commercial business reports Q1 2026 earnings Monday after the market close.
- Palantir is one of several big names reporting from the Technology sector: Chip maker and Nvidia competitor AMD reports, key software companies include mobile marketing platform company AppLovin and cloud-based services company Cloudflare
- Consumer companies to watch: Lowe’s, Anheuser Busch, Disney, McDonalds, AirBnB, Uber, Marriott, and DoorDash
- There are several companies in the industrial sector I’m watching: BWXT Technologies provides nuclear components, and Howmet Aerospace develops and manufactures lightweight metal products for aerospace systems
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.
