Poljak Group Wealth Management | Shreveport, LA
Weekly Market Insight
Today's Market Recap
Dow (0.01%), S&P 500 (0.24%), Nasdaq (0.26%), Russell 2000 +0.58%
- US equities were mostly lower in Monday trading, though stocks ended off worst levels. Equal-weight S&P outperformed the cap-weighted index by ~55 bp. Nasdaq broke streak of 13 straight gains (longest streak since 1992). Big tech mostly weaker. Memory lower, semis a bit better, software saw solid gains. Most shorted, retail favorites, small caps also better. Underperformers included pharma/biotech, airlines, multis, A&D, PE, payments, housing-related retail, casinos, cruise lines, and China tech. Outperformers included energy, banks, insurers, chemicals, steel, road/rail, building products, homebuilders, and media. Treasuries unchanged to a bit weaker, yields up 1-2 bp. Dollar index off 0.1%. Gold finished down 1%. Silver ended off 2.2%. Bitcoin futures down 1.6%. WTI crude settled up 5.9%. (FactSet)
- Market traded with a more defensive tone coming off a big three-week rally. However, while geopolitical developments took a turn for the worse over the weekend and headline volatility remains high, consensus expectations continue to revolve around a de-escalatory path. In addition, the Street has flagged expectations for further support from systematic strategy re-risking, which has been the big tailwind in recent weeks. Other positioning/flow dynamics also seen as supportive. Solid macro backdrop, good start to Q1 earnings season (banks highlighted resilient consumer, downplayed private credit as a systemic risk), AI compute/capex, tax refunds, dampened energy intensity and pickup in M&A activity some of the other bullish talking points. (FactSet)
- Nothing on the US economic calendar this morning. Tuesday brings March retail sales and pending home sales. No data scheduled for Wednesday. Thursday brings initial claims for w/e 18-Apr, along with the April flash PMIs. Final University of Michigan consumer sentiment and inflation expectations cap off the week on Friday. No Fedspeak this week with the central bank in its blackout period. However, the macro highlight of the week comes on Tuesday with Fed chair nominee Kevin Warsh's confirmation hearing. (FactSet)
Last Week's Market Recap (Monday, April 13th - Friday, April 17th)
Dow +3.19%, S&P 500 +4.54%, Nasdaq +6.84%, Russell 2000 +5.56%
- US equities were higher last week, with the S&P 500 and Nasdaq up ~3%+ for the third-straight week. Big Tech was a leader. Software, semis, and memory were also among the best performers. Other outperformers included PE, China tech, credit cards, payments, trucking, casinos. Laggards included energy, aluminum, chemicals, staples, entertainment, and pharma. Treasuries were firmer with the curve bull steepening. The dollar index was down 0.5%. Gold was up 1.9%. Silver was up 7%. Bitcoin futures were up 5.5%. WTI crude (June) was down 7.8%. (FactSet)
S&P 500 Sector Performance (Source: FactSet)
- Outperformers: Tech +8.09%, Consumer Disc. +6.64%, Communication Services +6.28%
- Underperformers: Energy (3.52%), Utilities (1.69%), Materials (0.39%), Consumer Staples (0.04%), Healthcare +0.90%, Industrials +1.16%, Financials +3.27%, Real Estate +3.83%
What happened last week?
- Stocks were higher again last week, helping push the S&P 500 to its first record close last Wednesday since late January. The Russell 2000 and Nasdaq composite also ended the week at fresh record closes. Nasdaq Composite was up for 13 straight sessions through Friday, tied for the fifth-longest winning streak on record (with Dec-91 to Jan-92) and a bigger gain than any of the longer streaks (+17.7%). The latest US/Iran updates around de-escalation were a tailwind to stocks, helping push WTI crude and Treasury yields to multi-week lows. The market is also now pricing in 14 bp of cuts through year-end, the most since the start of the conflict. (FactSet)
- Movement toward an end to the US/Iran war was a big piece of last week's gains. Trump announced a US blockade of the Strait of Hormuz over the weekend in an effort to get Iran back to talks. Both Trump and Middle East mediators floated peace talks happening soon, while last Friday Axios report said the US and Iran are negotiating a deal where the US would release $20B in frozen Iranian funds in exchange for Iran giving up its stockpile of enriched uranium (though Trump later disputed the details), while media reports Friday said talks with Iran could restart this week. Iran's Foreign Minister also said on Friday that passage for all commercial vessels through the Strait of Hormuz is completely open for the remainder of the ceasefire (which ends this week). (FactSet)
- Positioning was also a key tailwind last week. Goldman Sachs noted CTAs bought over $86B of global equities in past week, a top-five pace on record. The bank also said systematic buyers could purchase an additional $70B over the next five sessions, assuming a flat tape. UBS also said risk control funds have not yet been meaningful buyers, and could buy an additional $185B over the next month, assuming the S&P 500 averages +/- 50 bp daily moves. However, the Nasdaq has jumped from oversold (RSI < 30 on 30-Mar) to overbought (RSI over 95 as of 17-Apr) during the course of the rally. (FactSet)
- Tech leadership was also back in focus as the Mag 7, the AI-linked trade, and software were among the best performers last week. Software moved above its 50 dma for the first time since it began selling off earlier this year despite some more AI displacement fears on the latest Anthropic announcements. Goldman Sachs also noted the forward P/E for the Mag 7 has fallen to 25x, or just a 34% premium to the S&P 493, the narrowest premium in nearly eight years. Nomura also noted surging Mag 7 call skew as buyers look to chase further upside. (FactSet)
- Some other pieces of the bullish narrative include retail investor pickup, data suggesting a solid macro backdrop, consumer resilience (card spend, bank commentary), upbeat AI demand and capex headlines, a big bounce in software and private credit, a continued pickup in high-profile M&A headlines, and a focus on corporate flexibility into Q1 earnings. A number of Street strategists also cited earnings strength as an upside risk to stocks, offsetting the impact from the Middle East conflict (Reuters). FactSet's Earnings Insight recently noted expectations S&P 500 earnings growth of 13.2% in Q1, back in line with the level expected at the beginning of the quarter, which would mark a sixth-straight quarter of double-digit earnings growth. (FactSet)
- Data leaned positive last week, including March core PPI up just 0.1%, below 0.5% consensus. March Empire State Manufacturing Index beat with upside in new orders and shipments, while the Philly Fed Index hit the highest since Jan-25. ADP's weekly private payrolls showed 39.25K jobs per week over the past four weeks, the highest since the series started last year. Initial jobless claims were also better than expected. However, March existing home sales fell 3.6% m/m and missed, while April NAHB builder confidence missed, falling to the lowest level since September. (FactSet)
This week
- A fairly light macro week ahead includes Tuesday's March retail sales and March pending home sales; Thursday's S&P Global Flash Manufacturing and Services PMIs; and Friday's final April Michigan Sentiment. Kevin Warsh's nomination hearing to become the Fed Chair is scheduled for Tuesday. (FactSet)
- Earnings meaningfully ramp up this week, included Tuesday's pre-market DGX, DHI, DHR, GE, HAL, MMM, RTX, UNH; Tuesday's post-market CB, COF, IBKR, UAL; Wednesday's pre-market BA, BSX, CME, GEV, MAS, MCO, NVR, T; Wednesday's post-market CSX, GL, IBM, LRCX, LUV, NOW, TSLA, TXN; Thursday's pre-market AXP, BX, CMCSA, DOW, FCX, HON, LMT, NDAQ, TMO, UNP; Thursday's post-market BKR, EW, INTC, KLAC, PFG; and Friday's pre-market CHTR, HCA, NSC, PG, SLB. (FactSet)
Key Dates/Data Releases for this week (Source: Market Week)
- 4/21: Retail sales
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