Poljak Group Wealth Management | Shreveport, LA
Weekly Market Insight
Today's Market Recap
Dow +0.32%, S&P 500 (0.07%), Nasdaq (0.51%), Russell 2000 (0.65%)
- Major US equity indexes were lower in today’s trading, though stocks ended well off worst levels. Equal-weight RSP outperformed cap weighted S&P by ~70 bp; breadth positive and majority of sectors higher. Semis and memory notably weaker again. Big tech also mostly lower. Other laggards included E&Cs, multis, tech hardware, networking/communications, autos/suppliers, biotech, industrial metals, nuclear, and quantum computing; retail-investor favorites weak as well. Outperformers included software, energy, banks (particularly regionals), insurers, exchanges, payments, media, homebuilders, rails, MedTech, hotels, dollar stores, grocers/staples retailers, and telecom. Treasuries little changed to a bit firmer with some curve steepening; yields down ~2 bp at short end. Dollar index off 0.3%. Gold finished down 0.1%. Silver was down 0.1% as well. Bitcoin futures down 2.9%. WTI crude settled up 3.3% in up-and-down trading amid US-Iran headline noise. (FactSet)
- US/Iran war narrative continues to offer a lot of headline volatility, little progress toward a resolution. Late afternoon social media post by Trump said Middle East leaders from Qatar, UAE, Saudi Arabia, asked for US to hold off on planned military attack on Iran, which Trump said was scheduled for tomorrow. Earlier updates continued to vacillate between diplomacy vs possible US strikes. Rate stabilization a key focus in Monday trading following upward pressure on Treasury yields last week, though global bond yield break continues to get flagged as key headwind for risk sentiment, with Japan and Uk the notable areas of scrutiny. AI trade (semis, memory), Mag 7 also under pressure in Monday trading, extending recent momentum unwind. Other bearish pieces of narrative include growing fears around rapidly deteriorating energy inventory buffers, further upward pressure on energy prices and global supply chain spillover effects, still-extended positioning and sentiment, CTAs likely selling in neutral scenarios in near-term, and hawkish Fed outlook (market pricing ~15 bp of hikes through year-end). Bullish pieces include M&A tailwinds (latest in utilities sector), buyback boosts, activist headlines, BRK.B positioning update. However, market waiting for signals later this week with NVDA, retail earnings. (FactSet)
Last Week's Market Recap (Monday, May 11th - Friday, May 15th)
Dow (0.17%), S&P +0.13%, Nasdaq (0.08%), Russell 2000 (2.37%)
- Major equity indices were mostly lower last week. However, weak breadth was in focus: the equal-weight S&P (RSP) lagged the cap-weighted index by ~130 bp. Twice last week (Monday and Wednesday) the S&P 500 closed higher despite negative NYSE breadth. (FactSet)
- Energy was the best-performing sector alongside strengthening crude. Other outperformers included networking/communications, managed care, hospitals, pharma, commodity/ag chemicals, P&C insurance, exchanges, and road/rail; retail-investor favorites also had a strong week (and remains one of the top-performing groups YTD). (FactSet)
- Big tech was mixed. Semis/memory space pared recent strength in risk-off Friday trading with some discussion about profit-taking; software also saw a mixed week. Retail/apparel saw broad weakness against the backdrop of the debate about consumer struggles. Other laggards included homebuilders (rates), building products, airlines, paper/packaging, machinery, A&D, PE, credit cards, regional banks, and China tech; most-shorted names and small-caps struggled as well. (FactSet)
- Treasuries weakened notably across the curve, with the 30-year yield moving well above 5% and near its highest since October 2023. The weakness came alongside last week's three tailing Treasury auctions; Wednesday's $25B sale of 30-year bonds saw a coupon above 5% for the first time since 2007. The dollar was stronger on the major crosses, with DXY +1.4% logging its strongest week in two months. The greenback outperformed vs sterling amid the UK's ongoing leadership debate. Gold was down 3.6%; silver dropped 4.1% for the week. Bitcoin futures were down 1.4%. WTI crude rose 10.5%, settling back above $100/barrel. (FactSet)
S&P 500 Sector Performance (Source: FactSet)
- Outperformers: Energy +6.75%, Consumer Staples +1.25%, Tech +1.19%, Healthcare +1.00%
- Underperformers: Consumer Disc. (3.07%), Real Estate (2.59%), Materials (2.28%), Utilities (2.05%), Industrials (1.15%), Communication Services (0.84%), Financials (0.31%)
What happened last week?
- It was an up-and-down week, with the S&P setting fresh record highs last Monday, Wednesday, and Thursday on narrow breadth but seeing a more risk-off tone last Tuesday and Friday. There were multiple, intertwined themes at play, especially the continued tailwinds from the AI compute demand/capex theme. (FactSet)
- The consumer discretionary space remained under some pressure with continued concerns about ongoing high energy prices and the potential to crowd out consumer spending; also notes about higher inflation resulting in negative real wage growth. Also commentary about K-shaped impacts and notes that higher-income consumers spend proportionally less on energy. (FactSet)
- At the same time, a lot of uncertainty about Iran/Hormuz. Situation has remained largely in its status quo despite ongoing confrontational language from both sides. There were reports last week the US could consider strikes under a new "Operation Sledgehammer" to force Iran back to the table, while also headlines that the Iranian military may not be as degraded as previously thought. Although there has been some increased traffic through the strait as countries strike bilateral deals with Iran. (FactSet)
- Even though expectations were limited, the Trump-Xi summit in Beijing seemed to underwhelm. There was no major breakthrough on trade, and at best the meeting may have set the table for further talks. Xi warned Trump on the risk of misunderstandings regarding Taiwan; while on Iran, China concurred that Hormuz should be reopened and Tehran should not have nuclear weapons, but China will likely bring no additional pressure. (FactSet)
This week
- There will be a resurgence of Q1 earnings reporters this week, with NVDA's report post-close Wednesday. There will also be a flurry of retail reporters, including WMT, HD, TJX, LOW, ROST, and TGT. Other major names reporting will include DE, INTU, KEYS, TTWO, CPRT, and WDAY. (FactSet)
- It will be a fairly light week on the economic front, with the major releases including May NAHB homebuilder sentiment (Monday); April pending-home sales and weekly ADP employment estimate (Tuesday); April housing starts, weekly jobless claims, flash May PMIs, and Philly Fed manufacturing (Thursday); and final May UMich consumer sentiment (Friday). (FactSet)
- The minutes from the FOMC's 28-29 April meeting will be released on Wednesday. There is just a bit of Fed-speak scheduled. Governor Waller speaks from Germany on Tuesday and Friday; Philadelphia Fed's Paulson speaks on Tuesday on the economic outlook; and Governor Barr speaks Wednesday on financial health metrics. (FactSet)
Key Dates/Data Releases for this week (Source: Market Week)
- 5/19: Housing starts
It is our pleasure to serve you! We created Market Insight to keep you informed and up to date on our current industry focus, as well as areas of concern and interest to our firm and clients. Our team will continue to closely monitor market and economic news and trends; we are actively tracking ongoing developments in the Middle East and other parts of the world and will share with you significant economic and market impacts.
Market Insightis one of the many ways you and your family can benefit from your relationship with Poljak Group—in addition to access to world-class resources, including leading investment research, expertise and technologies offered through our strategic partnership with Raymond James and Steward Partners. Please stay tuned each week for new editions of Poljak Group’s Market Insight newsletter and review past issues on our website at www.PoljakGroup.com.
Investing involves risk and you may incur a profit or loss regardless of strategy selected.
Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.
For index definitions click here
Gold is subject to the special risks associated with investing in precious metals, including but not limited to the risks that: price may be subject to wide fluctuation; the market is relatively limited; the Sources are concentrated in countries that have the potential for instability; and the market is unregulated.
In the event that you no longer wish to receive these commercial emails please reply to this email and in the body of the email request that we remove you from our email list.
The information contained within this commercial email has been obtained from Sources considered reliable, but we do not guarantee the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation.
The opinions of Brian S. Wesbury are independent from and not necessarily those of Steward Partners. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct.
The views expressed herein are those of the author and do not necessarily reflect the views of Steward Partners or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
AdTrax 5717151.159 Exp 5/27