THE WEEK ON WALL STREET
Stocks meandered around a flatline in a busy week of corporate earnings, ending the trading week slightly lower. The Dow Jones Industrial Average slid 0.50%, while the Standard & Poor’s 500 was flat (+0.02%). The Nasdaq Composite index surrendered 0.39%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.18%.
Though the S&P 500 and Nasdaq established new record highs at the start of the week, stocks struggled to find traction as the week wore on. Investor sentiment was dampened by rising COVID-19 infections in India and Japan, along with mounting inflation worries. Stocks finally caught some lift from strong quarterly reports issued by two big technology companies and an upbeat first-quarter Gross Domestic Product growth number, sending the S&P 500 to a fresh record high. Once again, though, stocks failed to follow through, as the market retreated in the final day of trading to close near where it began the week.
EARNINGS TOP EXPECTATIONS
Last week was the biggest week of the first quarter’s earnings season with a third of S&P 500 companies reporting, including six of the largest companies. With expectations high, businesses generally topped Wall Street analysts’ estimates; Big Tech companies posted especially noteworthy earnings. Coming into last Friday, with 40% of S&P 500 index companies reporting, earnings-per-share growth (EPS) is now estimated to be 29.3%, well ahead of the 12.2% EPS growth rate that analysts had expected at the start of the year.7
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Factory Orders.
Wednesday: ADP (Automated Data Processing) Employment Report. ISM (Institute for Supply Management) Services Index.
Thursday: Jobless Claims.
Friday: Employment Situation Report.
THE WEEK AHEAD: NOTABLE COMPANIES REPORTING EARNINGS
Tuesday: CVS Health Corporation (CVS), Pfizer, Inc. (PFE), Dominion Energy (D), Prudential Financial (PRU).
Wednesday: Paypal Holdings (PYPL), General Motors (GM), Twilio, Inc. (TWLO), Etsy, Inc. (ETSY), Cognizant Technologies (CTSH).
Thursday: Square, Inc. (SQ), Roku, Inc. (ROKU), Albemarle Corporation (ALB), Regeneron Pharmaceuticals, Inc. (REGN), Booking Holdings (BKNG), Expedia Group (EXPE), Kellogg Company (K).
Friday: Berkshire Hathaway (BRK.A), EOG Resources (EOG), Cigna Corporation (CI), Draftkings, Inc. (DKNG).
Almost half of the S&P 500 companies have reported results so far and according to Refinitv, 87% have delivered earnings that have beat Wall Street's estimates. They further report that earnings are growing by more than 46%. Earnings announcements will continue to dominate the news cycle this week, but the monthly jobs report will also jockey for position. Wall Street is expecting a solid number. According to Dow Jones, there is a consensus forecast of 978,000 and the unemployment rate is expected to fall to 5.8%
Have a great week!