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A Positive Week for Stocks as Markets Drift Higher

A Positive Week for Stocks as Markets Drift Higher

May 14, 2024

Stocks on the Rise: Last week, the stock market continued its upward trend in May, making up for the losses experienced in April. The S&P 500, one of the main stock market indices, has now posted gains for three weeks in a row. The Dow Jones Industrial Average also did well, extending its winning streak to eight days by Friday.

Economic News: While there weren't many major economic reports last week, a few notable issues did come up. Jobless claims, which track the number of people filing for unemployment benefits, rose to an 8-month high of 231,000. This was more than expected, as economists had predicted a smaller increase to 213,000. Additionally, consumer sentiment, which measures how optimistic people feel about the economy, fell more than anticipated. Despite these concerns, investors remained optimistic because many companies reported better-than-expected earnings.

Weekly Stock Performance:

Dow Jones Industrial Average, S&P 500, Nasdaq and Russell 2000 (small companies) all posted gains for the week.

Unemployment Claims: The number of people filing for unemployment benefits for the first time increased by 22,000 to 231,000 last week. Continuing claims, which count people who are still receiving benefits, also rose by 17,000 to 1.79 million. Even though these numbers can change a lot from week to week, the four-week average of 215,000 initial claims is still relatively low compared to historical levels.  This is seen as a sign that the economy is losing steam, increasing optimism that the Fed could begin lowering interest rates sooner rather than later.

Sector Performance: All 11 major sectors of the stock market saw gains last week. Leading the pack were Utilities, Financials, Materials, Industrials.  The sectors with the smallest gains were Consumer Discretionary, Energy, Information Technology. For the year so far, the top-performing sectors are:

  • Communication Services: Up 19.28%
  • Utilities: Up 13.51%
  • Energy: Up 13.13%

Treasury Yields and Commodities: The bond market was calm last week, with the 10-year Treasury note's yield barely changing, ending the week at 4.50%. Gold prices rose by 3.66%, while the price of WTI Crude Oil dipped slightly by 0.49%, and overall, oil prices have dropped by 4.89% this month.

In summary, despite a few bumps in the economic data, the stock market had a strong week, buoyed by solid earnings reports from many companies. Investors remain hopeful as we move further into the year.

The views stated herein are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell Index. It was started by the Frank Russell Company in 1984. The index is maintained by FTSE Russell, a subsidiary of the London Stock Exchange Group

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.