4/29/24 Weekly Market Commentary

4/29/24 Weekly Market Commentary

April 29, 2024

What happened last week…         

As of April 26, 46% of S&P 500 companies have reported earnings with 77% having a positive EPS surprise and 60% having a positive revenue surprise, according to FactSet. The blendedearnings for the S&P 500 is 3.5%, which would be the third-straight quarter of growth. The blended revenue for the index is 4.0%, which would be the 14th straight quarter of growth. For the stocks in the Rockline portfolios, as of April 26, 52% of companies have reported earnings with 85% having a positive EPS surprise and 71% having a positive revenue surprise.

 

The GDP growth rate (first estimate) for Q1 2024 missed expectations (2.4%) as it decreased to 1.6% from the Q4 2023 reading of 3.4%, which was a decline from the 4.9% reading in Q3 2023. It is the lowest growth since the contractions seen during the Covid pandemic.

 

New home sales for March beat expectations (668,000) as it increased to 693,000 from the downwardly revised 637,000 (from 662,000). It is the highest reading in six months.

 

Happening this week…

The following companies report earnings this week: AEP, AMZN, ITW, LLY, MCD, PEG, ADP, MA, PFE, AAPL, MCO, SO, ZTS.

 

On Wednesday, the Federal Open Market Committee will announce its decision on interest rates, which are expected to remain unchanged at 5.25% to 5.50%. Rates have remained at that level for five straight meetings. According to the CME FedWatch Tool, as of April 26, the first Fed rate cut is forecasted to potentially occur after the committee’s September meeting.

 

On Wednesday, the ADP employment change may decrease to 180,000 from 184,000. On Friday, the unemployment rate is expected to remain at 3.8%, nonfarm payrolls are forecasted to decrease to 210,000 from 303,000, and average hourly earnings month-over-month are expected to remain at 0.3%.

 

On Wednesday, the manufacturing PMI for April is expected to decrease to 50.0 from 50.3, which snapped a streak of 16straight contractionary readings (below 50). On Friday, the non-manufacturing PMI for April is expected to increase to 52.3 from 51.4, which was the 15th straight month of an expansionary reading.

Thanks for reading!

- The Rockline Team