Weekly Market Recap: Resilience Amid Mixed Signals

Market Overview:

- U.S. equities extended gains for the third consecutive week, with stocks buoyed by a mixture of earnings reports. Despite concerns about a slowing job market, the S&P 500 remained within 1% of its all-time high. Value stocks outperformed growth counterparts, while small caps marginally outpaced large caps.

- Utilities rallied 4% driven by AI-led power demand and a dip in yields, leading sector performance. Other value sectors such as financials, materials, real estate, and industrials also performed well. However, the consumer discretionary sector lagged behind.

- In international equities, Europe countered weakness in Japan, allowing the MSCI EAFE Index to finish positively. The U.K. market surged following signals of a summer rate cut by the Bank of England.

- Emerging markets experienced a slowdown, with notable performers including South Africa, Taiwan, and Mexico, while India lagged.

- The Bloomberg Commodities Index edged higher, with silver surging nearly 7% due to rising solar panel demand. Gold lagged as Chinese official purchases slowed, raising concerns.

Federal Reserve Insights and Economic Roundup:

- The Bloomberg Aggregate Bond Index remained flat amid sparse economic data, as markets adjusted expectations for monetary policy.

- Treasury auctions saw mixed but encouraging results, indicating solid demand for bonds. The J.P. Morgan Treasury sentiment survey revealed increased net-long positions, reflecting confidence despite economic uncertainty.

- Over 40 investment-grade firms in the U.S. sold $53 billion of bonds, marking the busiest three-day period since 2021. High-yield issuers priced nearly $11 billion in bonds amid tight risk premiums.

The Week Ahead:

Monday: NY Fed 1-Year Inflation Expectations (Apr)

Tuesday: NFIB Small Business Optimism (Apr), PPI (Apr)

Wednesday: MBA Mortgage Applications (May 10), Empire Manufacturing (May), CPI (Apr), Retail Sales (Apr), Business Inventories (Mar), NAHB Housing Market Index (May), TIC Data (Mar)

Thursday: Initial Claims (May 11), Housing Starts (Apr), NY Fed Business Services Business Activity (May), Philadelphia Fed Business Outlook (May), Import/Export Price Indexes (Apr), Industrial Production (Apr)

Friday: Leading Index (Apr)