Poljak Group Wealth Management | Shreveport, LA
Weekly Market Insight
Today's Market Recap
Dow +0.19%, S&P 500 +0.19%, Nasdaq +0.10%, Russell 2000 +0.33%
- US equities were higher in today's trading. Stocks ended off best levels, upside fairly modest. Memory names ripped higher again with Samsung strike worries the latest tailwind. Semis up over 2%. Other outperformers included AI power, energy, E&Cs, machinery, commodity chemicals, copper and aluminum, tech components, networking and IT equipment. Underperformers included cruise lines, airlines, casinos, software, China tech, banks, PE, discounters, dollar stores, department stores, apparel, homebuilders, building materials, cosmetics, beverages, HPCs, and auto parts. Treasuries weaker with yields up ~3-6 bp. Dollar index up 0.1%. Gold finished fractionally lower, well off earlier lows. Bitcoin futures up 2.3%. WTI crude ended up 2.8%. (FactSet)
- Stocks rather resilient in the face of higher oil, higher yields and higher VIX. Market still seems skeptical about a re-escalation of Middle East hostilities (particularly ahead of Trump/Xi summit in China this week) despite the lack of traction surrounding diplomatic efforts. AI compute and capex demand narrative remains the big tailwind for risk sentiment (with outsized benefit for momentum factor). Mechanical dynamics (including elevated call option activity) also continue to get a lot of attention. Pretty quiet elsewhere ahead of some key macro data over the next few days and the Trump-Xi summit. Some focus on softness in consumer and transportation plays as spillover effects from gas spike get more attention, while hantavirus another area of concern. (FactSet)
Last Week's Market Recap (Monday, May 4th - Friday, May 8th)
Dow +0.22%, S&P 500 +2.33%, Nasdaq +4.51%, Russell 2000 +1.72%
- US equities were higher last week as the S&P 500 and Nasdaq both capped off a sixth-straight weekly gain and ended at fresh record highs. The S&P is up over 16% that period, the third best six-week run in the past 15 years (May-25 Liberation Day rebound, May-20 Covid rebound), while Nasdaq has rallied over 25% over this period, its second-best run (behind April-09 GFC rebound) since May-01 (rebound from dot-com bust). (FactSet)
- Big tech was all higher with a few standouts. Semis also rallied with SOX up for a sixth-straight week (up over 58% during that period), its second-best six-week run on record (since 1994; behind Mar-00). Software was also higher for a fourth-straight week (IGV). Other outperformers included memory, Internets, tech components, China tech, airlines, copper and aluminum, casual diners, building materials, and PE. Laggards included energy, parcels and logistics, road and rails, discounters, media, money-center banks, credit cards, payments, and homebuilders. (FactSet)
- Treasuries were little changed to a touch firmer with some curve flattening. The dollar index was down 0.3%. Gold was up 1.9%. Silver was up 5.8%. Bitcoin futures were up 2%. WTI crude was down 6.4%. (FactSet)
S&P 500 Sector Performance (Source: FactSet)
- Outperformers: Tech +7.00%
- Underperformers: Energy (5.37%), Utilities (3.97%), Financials (1.36%), Healthcare (1.15%), Consumer Staples (0.23%), Real Estate +0.06%, Industrials +0.17%, Materials +0.55%, Consumer Disc. +1.75%, Communication Services +1.86%
What happened last week?
- The Iran war remains the key focal point. Last week saw a ramp in optimism for a diplomatic solution, notably the US and Iran nearing agreement on a 14-point MOU that is under negotiation between Trump envoys Witkoff and Kushner and Iranian officials (Axios). However, there is some skepticism that Iran will also abandon some of its longer-standing hardline positions (notably on nuclear), while there was some escalation Thursday with Iran and US launching strikes at each other (NY Times). Regardless, the expected path to end the war helped push oil prices lower, though Treasury yields lower only saw modest gains. (FactSet)
- AI was the other big story of last week. AMD results helped support the AI compute/capex narrative. Announced partnerships (Anthropic and GOOGL, Anthropic and SpaceX) also played into the AI demand and capex narrative. (FactSet)
- Data last week was headlined by Friday's April nonfarm payrolls report, which came in ahead at 115K, ahead of 65K consensus. The unemployment rate ticked up slightly, while average hourly earnings came in cooler than expected. Friday's April Michigan Consumer Sentiment missed, falling to a record low 48.2. The current conditions index also fell to a record low with respondents increasingly concerned about the inflation picture. (FactSet)
- In addition to AI tailwinds, a resilient macro backdrop, and earnings strength, other pieces of the bullish narrative included more retail investor participation, pushback against narrow breadth (BofA and Morgan Stanley both highlighted strong median stock EPS growth), and resilience in software names amid AI disruption fears. The bearish narrative included hawkish Fed takeaways (market now pricing ~3 bp of hikes through year-end) and concerns around a lagged inflation impact from the US-Iran conflict. Stretched positioning and sentiment are in focus after the recent run, notably in momentum. Earnings commentary included consumer concerns from rising gas and energy prices (Bloomberg). The AI narrative remains under scrutiny over issues around breadth, valuations, supply constraints and component shortages, and FCF headwinds. AI also played into some high-profile, large corporate layoffs. (FactSet)
This week
- Economic data this week includes April existing home sales on Monday; April CPI on Tuesday; April PPI on Wednesday; and April retail sales on Thursday. Treasury auctions this week include Monday's $68B sale of 3Y notes, Tuesday's $46B sale of 10Y notes, and Wednesday's $26B sale of the 30Y. The big potential Fed event of this week is the potential Senate vote for Fed Chair nominee Warsh, which could take place today. (FactSet)
Key Dates/Data Releases for this week (Source: Market Week)
- 5/11: Existing home sales
- 5/12: Consumer Price Index
- 5/13: Producer Price Index
- 5/14: Retail sales, import and export prices
- 5/15: Industrial production
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