Continued positive earnings results and increasing consumer optimism generated positive buzz in the markets this week. However, disappointing job numbers, along with persistent fears of wage inflation and rising oil prices, put a damper on much of the growth.
Earnings – With the large majority of the S&P 500 having reported Q1 earnings numbers, over 85% of companies announced that they exceeded quarterly expectations. Interestingly, the market did not reward those who beat estimates nearly to the degree that it punished those who fell short. The average share price of companies who beat remained relatively flat, while companies who missed had share price fall by an average of two percent.
Consumer Sentiment – Americans are feeling very optimistic about their current financial condition, with 57% of those surveyed reporting that they felt “excellent/good”. This represents the highest percentage since 2002. Additionally, consumer spending growth for 2021 is expected to be at the highest levels since World War II.
Jobs Data – Recent employment data for April disappointed, as only 260,000 new jobs were created, and unemployment rose to 6.1%. Estimates called for 1M new jobs and an unemployment rate of 5.8%. With many employers scrambling to hire workers, the disappointing results are likely a short-term anomaly. However, it is important to keep an eye on this potential trend moving forward.
IMPORTANT DISCLOSURES
Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
These materials, opinions, analyses, and information are provided for general informational purposes only based upon sources believed to be reliable and in good faith—but are not considered all-inclusive, and no representation or warranty of any kind, expressed or implied, is made concerning accuracy, completeness, correctness, timeliness, or appropriateness. In addition, we undertake no obligation to update such opinions, analysis or information, and no warranty or guarantee is made. The information in these materials may change at any time and without notice. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities and should not be relied on as financial advice. Please consult your attorney and/or accountant regarding legal and tax issues. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
Prices, quotes, rates and yields are subject to change without notice. Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.
Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
Data sources: News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary, with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates).
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.