3 Keys to the Week - May 7, 2021

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.


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Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.

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