The stock market had a mixed week as investors digested a slew of economic data and corporate earnings reports. The S&P 500 and the Nasdaq Composite edged higher, while the Dow Jones Industrial Average slipped lower. Here are some of the highlights from the week:
Fed’s biggest winners and losers
The Federal Reserve released the minutes of its March meeting on Wednesday, revealing that most policymakers expected to keep interest rates near zero through 2023, despite an improving economic outlook and rising inflation expectations. The Fed also reiterated its commitment to maintain its monthly bond purchases at $120 billion until “substantial further progress” is made toward its goals of maximum employment and price stability.
The dovish tone of the Fed minutes boosted some of the sectors that benefit from low interest rates and easy monetary policy, such as technology, consumer discretionary, and communication services. Some of the biggest winners in these sectors were Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Facebook (FB), which all gained more than 3% for the week.
On the other hand, some of the sectors that suffer from low interest rates and higher inflation, such as financials, energy, and materials, lagged behind. Some of the biggest losers in these sectors were JPMorgan Chase (JPM), Chevron (CVX), and Freeport-McMoRan (FCX), which all dropped more than 2% for the week.
The macro environment and more
The week also featured several important economic indicators that painted a mixed picture of the recovery. On Tuesday, the Labor Department reported that consumer prices rose 0.6% in March from February, the largest monthly increase since August 2012. The annual inflation rate jumped to 2.6%, the highest since March 2018. However, much of the increase was driven by a surge in gasoline prices, which rose 9.1% in March. Excluding food and energy, core inflation rose 0.3% month-over-month and 1.6% year-over-year.
On Thursday, the Commerce Department reported that retail sales soared 9.8% in March from February, beating expectations and marking the largest monthly gain since May 2020. The stimulus checks from the $1.9 trillion relief package boosted consumer spending across various categories, especially motor vehicles, clothing, sporting goods, and restaurants. Meanwhile, the Labor Department reported that initial jobless claims fell to 576,000 last week, the lowest level since March 2020.
On Friday, the University of Michigan released its preliminary consumer sentiment index for April, which rose to 86.5 from 84.9 in March, reaching the highest level since March 2020. The index was boosted by an improved outlook for income and employment prospects, as well as a decline in coronavirus cases and an increase in vaccinations.
What to watch next week
Next week will be a busy one for corporate earnings reports, as some of the major companies across various sectors will announce their first-quarter results. Some of the notable names include Coca-Cola (KO), IBM (IBM), Johnson & Johnson (JNJ), Netflix (NFLX), Procter & Gamble (PG), Verizon (VZ), Intel (INTC), AT&T (T), American Express (AXP), Honeywell (HON), and Kimberly-Clark (KMB).
Next week will be a busy one for corporate earnings reports, as some of the major companies across various sectors will announce their first-quarter results. Some of the notable names include Coca-Cola (KO), IBM (IBM), Johnson & Johnson (JNJ), Netflix (NFLX), Procter & Gamble (PG), Verizon (VZ), Intel (INTC), AT&T (T), American Express (AXP), Honeywell (HON), and Kimberly-Clark (KMB).
Investors will also keep an eye on some key economic data releases next week, such as existing home sales, new home sales, durable goods orders, and personal income and spending. That’s all for this week’s stock market recap. Stay tuned for more updates and analysises.
