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Stocks End Week Strong as Earnings Season Enters Busiest Period
It was a strong week for both the equity and fixed-income markets. Global equities (represented by the MSCI All Country World Index) finished up 4.09% while domestic stocks (represented by the S&P 500 Index) were positive 4.60%. We also saw a nice rally in bonds on Thursday and Friday, as yields in the U.S. 10-year closed at 4.26%, down from 4.43% earlier in the week.
Earnings Season
As earnings season continued into its busiest period, we have seen the earnings growth rate for S&P 500 companies improve. According to data from FactSet, 73% of the companies that had reported first-quarter results through Friday morning had beaten consensus earnings expectations.
U.S. Consumer Sentiment
On Friday, the University of Michigan reported that its final reading for April was 52.2, down from 57.0 in March, as survey participants cited concerns about higher tariffs and inflationary pressures. Expectations for inflation in the year ahead rose to 6.5%, up from 5% in March.
Looking Ahead
It’s a busy week ahead from an economic data standpoint. Aside from a slew of quarterly earnings that are set to be reported, we also have an initial estimate of Q1 GDP growth, an inflation update, and monthly jobs report.
As Always
I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.
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