Stocks staged a choppy comeback last week as investors cheered positive earnings, led by mega-cap tech stocks. The rally came to pass despite fresh data showing a slowing economy and increasing inflationary pressures.
Stocks Bounce Back. Twice.
Last week opened with a rebound rally as investors breathed a sigh of relief that Middle East tensions had eased. The market rally extended into Tuesday, with investors cheering positive corporate earnings reports. By Tuesday’s market close, the S&P 500 had gained 2% for the week.1,2,3
But investor enthusiasm didn’t last, as midweek saw profit taking in all three averages. Rising bond yields threw a wet blanket on market momentum; at one point, the yield on the 10-year Treasury note rose more than 40 basis points from its low earlier in the week.4
On Thursday, markets slipped on two fresh pieces of economic data: a Gross Domestic Product (GDP) slowdown and higher consumer prices. But by midday, selling pressure slowed. Stocks pushed higher on Friday behind upbeat Q1 reports from two mega-cap tech stocks, helping the S&P 500 and the Nasdaq post their best week since November.5
Earnings vs. Inflation
Corporate earnings and economic reports battled it out last week. In the end, earnings won, at least for this week.
The big economic news was that Q1 GDP grew at a 1.6 percent annualized rate—slower than the 2.4 percent economists expected and less than Q4 2023. The GDP report seemed to support the Goldilocks economy theory—not too hot, but not too cool—a story investors have favored this year.
The PCE (personal consumption expenditures) Index, the Fed’s preferred inflation gauge, was embedded within the GDP report. Excluding food and energy, it increased 2.8% from a year ago. It was unchanged from February and slightly higher than expected. It joined a growing list of factors pointing to an uptick in inflation, complicating the Fed’s interest rate decision.5
This Week: Key Economic Data
Tuesday: Employment Cost Index. Case-Shiller Home Price Index. Consumer Confidence.
Wednesday: FOMC Announcement and Fed Chair Press Conference. Treasury Refunding Announcement. ISM Manufacturing Index. EIA Petroleum Status Report.
Thursday: Motor Vehicle Sales. Jobless Claims. International Trade in Goods & Services. Factory Orders. Productivity and Costs.
Friday: Employment Situation.
Source: Investors Business Daily – Econoday economic calendar; April 23, 2024
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Amazon.com, Inc. (AMZN), Eli Lilly and Company (LLY), The Coca-Cola Company (KO), Advanced Micro Devices, Inc. (AMD), McDonald’s Corporation (MCD), Starbucks Corporation (SBUX)
Wednesday: Mastercard Incorporated (MA), QUALCOMM Incorporated (QCOM), Pfizer Inc. (PFE), Automatic Data Processing, Inc. (ADP)
Thursday: Apple Inc. (AAPL), Amgen Inc. (AMGN), Booking Holdings Inc. (BKNG), ConocoPhillips (COP), Cigna Group (CI)
Friday: Berkshire Hathaway Inc. (BRK.A, BRK.B)
Source: Zacks, April 23, 2024
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
IRS Program Helps Seniors Prepare Taxes
The IRS has a Free File tool, which facilitates online tax preparation, direct deposits of refunds, and electronic filing choices, designed for taxpayers on a fixed budget, including seniors and retirees. Here is some information to know about the tool:
- IRS Free File is at IRS.gov and features some significant names in the tax software provider world.
- To use the tool, taxpayers can browse multiple offers.
- The eligibility standards for Free File depend on the tax partner but are typically based on income, age, and state residency.
- Free File has most of the necessary forms when filing your taxes. Even if you have a unique tax situation, you may still be able to use Free File.
- Some Free File products are available in Spanish.
- You can also search for credits and deductions in Free File.
- Some providers in Free File also offer state return preparation. You can use the lookup tool in Free File to find the tax partner that might be appropriate for your state requirements.
- Taxpayers can access Free File through computers, smartphones, or tablets.
*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov6
