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Week in Review: Apr.29.2024 - May.3.2024

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May 6, 2024

Market Recap


The S&P 500 index rose 0.5% last week, starting May on a positive note, as investors grew more hopeful the Federal Reserve's policy-setting committee will start cutting rates after April's US jobs data came in weaker than expected. In deed we are still living in a world where bad economic news is positive for stock markets. The S&P 500 ended Friday's session at 5,127.79 in its second weekly gain in a row. The market benchmark is now up 7.5% for the year to date.

The index earlier in week ended April with a 4.2% loss, the first monthly drop since October 2023. The decline came amid increasing fears that it may be a while before the Federal Open Market Committee feels comfortable lowering rates. The FOMC on Wednesday held benchmark interest rates steady for the sixth straight time, citing a lack of further progress on inflation in recent months.

Still, investors were optimistic on Friday after government data showed the US economy added fewer jobs than expected last month while wage growth eased. Total nonfarm payrolls climbed by 175,000 in April versus the Bloomberg consensus estimate of a gain of 240,000. The unemployment rate came in at 3.9%, up from 3.8% the month prior, which was the market's expectation for April. Average hourly earnings growth slowed to 0.2% from 0.3% in March; expectations had been for wage growth to stay at 0.3% in April.

Quarterly earnings reports continued to come in largely above expectations although revenue hasn't been coming in above estimates as much as earnings. Among the 185 S&P 500 components that released quarterly reports this week, almost 77% had better-than-expected earnings and 58% had better-than-expected revenue, according to Bloomberg data.

By sector, utilities led this week's climb with a 3.4% rise, followed by a 1.6% increase in consumer discretionary and advances of 1.5% each in real estate and technology.

The utilities sector's gainers included shares of AES (AES), which ended the week 8.4% higher amid the company's report of higher-than-expected Q1 adjusted earnings per share. AES reaffirmed its 2024 adjusted EPS guidance.

In consumer discretionary, shares of Garmin (GRMN) jumped 16% amid the navigation device maker's report of higher-than-expected fiscal Q1 results.

The consumer discretionary sector also got a boost from Amazon.com (AMZN), whose shares climbed 3.7%, amid stronger-than-expected Q1 results from the e-commerce company.

However, four sectors fell during week, led by energy, which lost 3.4%, and financials, which shed 0.6%.

The energy sector's drop came as crude oil futures fell. Decliners included shares of APA Corp. (APA), which fell 9.9% as the company reported Q1 adjusted earnings per share below analysts' mean estimate despite revenue coming in slightly above the Street view.

This week's earnings calendar features Vertex Pharmaceuticals (VRTX), Walt Disney (DIS), Duke Energy (DUK), Uber Technologies (UBER) and Airbnb (ABNB).Here in Canada, companies reporting this week include MEG Energy, Pet Value, Suncor Energy, Shopify, Manulife Financial, SunLife Financial, Canadian Tire, Enbridge and Algonquin Power.

Economic data will include April consumer credit and a preliminary reading on May consumer sentiment.

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