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Weekly Update – April 26, 2019

  • U.S. stocks ended the week strong with the S&P 500 and Nasdaq Composite hitting new record-high closes. The Dow, while below records, also gained. A host of earnings beats and strong economic readings largely contributed to Friday’s surge. Meanwhile, oil eased after President Trump said he called OPEC to argue for lower prices, erasing gains from earlier in the week. Elsewhere, major indexes in Europe gained while others across Asia declined.
  • The U.S. economy grew a 3.2% annualized rate from January through March, notching the strongest first-quarter growth in four years. The first quarter of 2019’s GDP reading also marks the third consecutive quarter in which year-over-year growth was greater than 3%.
  • With 46% of S&P 500 companies reporting first-quarter results, 77% have exceeded earnings per share (EPS) expectations, while 56% have beaten revenue expectations. As of April 26, 2019, Refinitiv estimated the S&P 500 index’s first-quarter earnings growth rate at -0.3% and its 12-month forward P/E ratio at 17.0. Twitter, Lockheed Martin and Amazon impressed this week, whereas Tesla, Freeport McMoRan and ExxonMobil disappointed. Next week, 164 S&P 500 companies report 1Q19 results.
  • March durable goods orders jumped 2.7% month-over-month to over $258 billion. The March growth number represents the fastest clip in seven months, exceeding expectations and pointing to a pick-up in demand.
  • However, initial jobless claims increased by 37,000 to a seasonally adjusted 230,000 during the week ending April 20.
  • New homes sales increased 3.0% in March versus the prior year, with overall gains coming from most parts of the nation. Meanwhile, March existing home sales decreased 4.9% month-over-month, following a sharp increase in February. Furthermore, the U.S. homeownership rate fell to 64.2% in the first quarter from 64.8% in the fourth quarter, its first decline in more than two years.
  • The University of Michigan’s index of U.S. consumer sentiment was 97.2 in April, down from 98.4 in March. Despite the month-over-month drop, the index has run at a historically high level for at least the past 2.5 years.

CPWM Weekly Market Monitor (2019.04.26)

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