What happened last week…
Two news items pleased the stock market last week. First, President Donald Trump said he has “no intention of firing” Federal Reserve Chairman Jerome Powell, who has been pressured by Trump to lower interest rates. Second, Treasury Secretary Scott Bessent told investors in a private speech that the trade war with China is expected to see a “de-escalation.” The S&P 500 finished the week up 4.59%.
New home sales for March beat expectations (680,000) as it increased to 724,000 from the downwardly revised 674,000 (from 676,000). It is the highest reading since September 2024 (726,000). Existing home sales for March fell below expectations (4.13 million) as it decreased to 4.02 million from the upwardly revised 4.27 million (from 4.26 million). It is the lowest reading since October 2024 (3.96 million).
According to FactSet, as of April 25, for Q1 2025, 36% of S&P 500 companies reported earnings with 73% having a positive EPS surprise and 64% having a positive revenue surprise. The blended earnings growth for the S&P 500 is 10.1%, which would be the second-straight quarter of double-digit growth. The blended revenue growth for the index is 4.6%, which would be the 18th consecutive quarter of growth for the index.
Happening this week…
The following companies report earnings this week: NUE, WM, SPGI, V, ADP, ITW, META, MSFT, PEG, AAPL, AMZN, LLY, MA, MCD, SO, XOM.
On Wednesday, the GDP growth rate (first estimate) for Q1 2025 is expected to decrease to 0.4% from the Q4 2024 rate of 2.4%, which was a decrease from the Q3 2024 rate of 3.1%. The Q2 2024 rate was 3.0% and the Q1 2024 rate was 1.6%, which was the lowest growth since the Covid pandemic.
On Wednesday, the ADP employment change may decrease to 130,000 from 155,000. On Friday, the unemployment rate is expected to remain at 4.2%, nonfarm payrolls are forecasted to decrease to 130,000 from 228,000, and average hourly earnings month-over-month are expected to remain at 0.3%.
On Thursday, the manufacturing PMI for April is expected to decrease to 47.9 from 49.0, which snapped back-to-back expansionary readings after 26 consecutive months in contraction (below 50).
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- The Rockline Team
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