The market closed last week higher. Trader sentiment was bolstered by good corporate earnings results from key megacaps. Of the 459 companies of the S&P 500 that have reported earnings, 77% beat consensus predictions. The Dow rode an eight-session winning streak, while the S&P 500 approached a record high. Among the market sectors, only consumer discretionary closed the week in the red. Utilities advanced 4.0% to lead the sectors, while financials, materials, consumer staples, communications services, and industrials outperformed. Treasury yields ended the week where they began. Crude oil prices advanced marginally. Gold prices jumped higher.
Last Week’s Economic News
- The monthly Treasury statement for April showed a surplus of $210.0 billion. The impact of large tax deposits resulted in receipts of $776.0 billion, reduced by $567.0 billion in outlays, which yielded the surplus. The total budget deficit through the seven months of the fiscal year was $855.0 billion. Over the same period last fiscal year, the deficit sat at $925.0 billion.
- The national average retail price for regular gasoline was $3.643 per gallon on May 6.
- For the week ended May 4, there were 231,000 new claims for unemployment insurance, an increase of 22,000 from the previous week’s level. This is the highest number of weekly claims for unemployment benefits since August 2023.
Eye on the Week Ahead
Inflation data is in the news this week with the release of the Consumer Price Index for April. Inflation has run hotter than expected over the past few months, raising concerns that the Federal Reserve may hike interest rates higher. However, statements from Fed officials seem to indicate that another rate increase is not in the offing. However, unless inflation reverses course, it is likely that the Fed will maintain the federal funds rate for longer than most had hoped.
Have a nice week!
Sincerely,
Robert G. Carpenter