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Weekly Market Insights: Despite Turbulent Week, Stocks Stage Comeback

Weekly Market Insights: Despite Turbulent Week, Stocks Stage Comeback

April 29, 2024

Stocks made a choppy comeback last week, despite a slowing economy and increasing inflation. Investors were optimistic due to positive earnings from mega-cap tech stocks.

Stocks Bounce Back. Twice.

Investors began last week with a rebound rally as tensions in the Middle East eased. The positive market momentum continued into Tuesday, with investors celebrating positive corporate earnings reports. By the close of the market on Tuesday, the S&P 500 had gained 2% for the week. However, midweek saw a reversal in investor enthusiasm, with profit taking occurring across all three averages. Market momentum was dampened by rising bond yields, with the yield on the 10-year Treasury note rising more than 40 basis points from its low earlier in the week. On Thursday, markets slipped on two new pieces of economic data: a Gross Domestic Product (GDP) slowdown and higher consumer prices. However, by midday, selling pressure slowed. Stocks rebounded on Friday with the release of upbeat Q1 reports from two mega-cap tech stocks, helping the S&P 500 and the Nasdaq post their best week since November.

Source: YCharts.com, April 27, 2024. Weekly performance is measured from Monday, April 22, to Friday, April 26.
ROC 5 = the rate of change in the index for the previous 5 trading days.
TR = total return for the index, which includes any dividends as well as any other cash distributions during the period.
Treasury note yield is expressed in basis points.

Earnings vs. Inflation

Last week, there was a competition between corporate earnings and economic reports, with earnings coming out on top at the end of the week. The most significant economic news was that the Gross Domestic Product (GDP) of a country with the license plate number "plate_number_1" grew at an annualized rate of 1.6 percent. This growth rate was slower than what economists estimated, and less than the GDP growth rate in Q4 2023. This report seemed to support the Goldilocks economy theory, which means that the economy is not too hot or too cold, which investors have favored this year.

The GDP report included the Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve's preferred inflation gauge. Excluding food and energy, it increased by 2.8% from the previous year. This figure was unchanged from February and slightly higher than expected. This joins a growing list of factors that are pointing towards an uptick in inflation, which might complicate the Fed's interest rate decision.


This Week: Key Economic Data

Tuesday: Employment Cost Index. Case-Shiller Home Price Index. Consumer Confidence.

Wednesday: FOMC Announcement and Fed Chair Press Conference. Treasury Refunding Announcement. ISM Manufacturing Index. EIA Petroleum Status Report.

Thursday: Motor Vehicle Sales. Jobless Claims. International Trade in Goods & Services. Factory Orders. Productivity and Costs.

Friday: Employment Situation.


Source: Investors Business Daily - Econoday economic calendar; April 23, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.


This Week: Companies Reporting Earnings

Tuesday: Amazon.com, Inc. (AMZN), Eli Lilly and Company (LLY), The Coca-Cola Company (KO), Advanced Micro Devices, Inc. (AMD), McDonald’s Corporation (MCD), Starbucks Corporation (SBUX)

Wednesday: Mastercard Incorporated (MA), QUALCOMM Incorporated (QCOM), Pfizer Inc. (PFE), Automatic Data Processing, Inc. (ADP)

Thursday: Apple Inc. (AAPL), Amgen Inc. (AMGN), Booking Holdings Inc. (BKNG), ConocoPhillips (COP), Cigna Group (CI)

Friday: Berkshire Hathaway Inc. (BRK.A, BRK.B)


Source: Zacks, April 23, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

"The hardest tumble a man can make is to fall over his own bluff."

– Ambrose Bierce

IRS Program Helps Seniors Prepare Taxes

The IRS provides a Free File tool, which makes online tax preparation, direct deposits of refunds, and electronic filing options available to taxpayers on a fixed budget, including seniors and retirees. Here are some key points to keep in mind about the tool:

- IRS Free File can be found on IRS.gov and offers options from reputable tax software providers.
- Taxpayers can browse through multiple offers to find the right one for them.
- Eligibility requirements for Free File vary depending on the tax partner, but are usually based on factors such as income, age, and state residency.
- Free File has most of the necessary forms for filing taxes, and even if you have a unique tax situation, you may still be able to use it.
- Some Free File products are available in Spanish.
- In addition to preparing taxes, you can also search for credits and deductions within Free File.
- Some providers in Free File also offer state return preparation. You can use the lookup tool in Free File to find the appropriate tax partner for your state requirements.
- Taxpayers can access Free File through computers, smartphones, or tablets.

It's important to note that this information is not intended to replace specific, individualized tax advice. It's recommended that you consult a qualified tax professional to discuss your specific tax issues.

Tip adapted from IRS.gov6

Aloe Vera: One Powerful Plant

Aloe vera is a plant with many medicinal properties that can be used in a variety of ways. It is a cactus-like plant that can grow in different climates and has thick and juicy leaves that hold water. This feature makes it popular for its hydrating properties. Let's discover the benefits of aloe vera and how it can be incorporated into your daily routine.

Aloe leaves contain a thick and sticky gel that is rich in bioactive compounds such as vitamins, minerals, amino acids, and antioxidants. This gel is known for its healing properties, including antibacterial, antiviral, and antiseptic properties. It can be used to treat skin problems, wounds, and even as a topical treatment for first and second-degree burns.

Moreover, aloe vera has been found to lower blood sugar levels by enhancing insulin sensitivity and managing blood sugar. There is some preliminary evidence that suggests that aloe vera may benefit people with prediabetes or type 2 diabetes. However, it's always advisable to check with your doctor or medical team for more information.

Tip adapted from Medical News Today7

I protect you. I sit on a bridge. You can see through me. People walking by might wonder what I hide. What am I?

  

Last week’s riddle: How can you name three consecutive days without mentioning the words Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, or Sunday? Answer: Use the words yesterday, today, and tomorrow.

A green sea turtle, Queensland, Australia

 

Footnotes and Sources

 

1. The Wall Street Journal, April 26, 2024

2. CNBC.com, April 22, 2024

3. CNBC.com, April 23, 2024

4. CNBC.com, April 24, 2024

5. The Wall Street Journal, April 25, 2024

6 IRS.gov, October 23, 2023

8. Medical News Today, January 23, 2023

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

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