Isaac Cockfield

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Zack started in the financial services industry in 1999 at Merrill Lynch and has worked with many of the same clients for 20 plus years. In 2003, Zack earned the Certified Financial Planner® designation and can meet over Zoom to do an intro meeting.

Weekly Market Performance — May 10, 2024

Kristian Kerr | Head of Macro Strategy

Last Updated:

LPL Research provides its Weekly Market Performance for the week of May 6, 2024. Stocks extended their winning streak to three weeks, with the S&P 500 now just about 1% off an all-time closing high. Investors shrugged off mixed earnings reports, focusing instead on recent economic data and the potential for summer interest rate cuts. Value stocks led the charge, while small caps edged out large caps for the week. Utilities continued their recent dominance, topping the sector charts for a third week straight, fueled by AI-driven power demand and a shift away from tech stocks. Bonds remained stagnant, as the benchmark Bloomberg Aggregate Bond Index struggles to convincingly break above key technical resistance at the 200-day moving average. Next week’s inflation data will be crucial in determining future bond market direction and whether the recent highs in yields will hold.  

Stock Index Performance

Index

Week-Ending

One Month

Year to Date

S&P 500

1.69%

1.04%

9.86%

Dow Jones Industrial

2.11%

2.68%

5.43%

Nasdaq Composite

1.11%

1.03%

9.09%

Russell 2000

1.01%

1.37%

1.89%

MSCI EAFE

1.74%

2.55%

6.56%

MSCI EM

0.05%

3.06%

5.67%

S&P 500 Index Sectors

Sector

Week-Ending

One Month

Year to Date

Materials

2.61%

0.24%

7.73%

Utilities

4.10%

9.85%

13.58%

Industrials

2.29%

1.16%

10.70%

Consumer Staples

2.19%

4.42%

9.51%

Real Estate

1.80%

0.16%

-5.14%

Health Care

1.93%

1.22%

5.75%

Financials

3.01%

2.17%

11.65%

Consumer Discretionary

0.17%

-0.13%

2.92%

Information Technology

1.36%

0.98%

11.73%

Communication Services

1.98%

0.45%

19.22%

Energy

1.23%

-4.34%

12.98%

Fixed Income and Commodities

Indexes and Commodities

Week-Ending

One Month

Year to Date

Bloomberg US Aggregate

0.32%

0.99%

-1.74%

Bloomberg Credit

0.29%

0.92%

-1.37%

Bloomberg Munis

0.50%

0.73%

-0.53%

Bloomberg High Yield

0.04%

0.76%

1.51%

Oil

0.20%

-9.21%

9.24%

Natural Gas

5.60%

20.00%

-10.02%

Gold

2.96%

1.54%

14.88%

Silver

6.57%

1.28%

18.95%

Source: LPL Research, Bloomberg 05/10/24 @ 2:00 p.m. ET
Disclosures: Indexes are unmanaged and cannot be invested in directly.

U.S. and International Equities

U.S. Equities: Stocks rose for the third straight week as a mixed batch of earnings was overshadowed by more evidence of a slowing job market that points to a summer rate cut and may suggest the recent highs for yields could hold. The S&P 500 is only about 1% away from its all-time closing high of 5,254.35 set on March 28, 2024. Based on the Russell indexes, value stocks outpaced their growth counterparts for the week, while small caps eked out marginal outperformance vs. large caps.  

Turning to the sectors, utilities continued their strong rally on artificial intelligence-driven power demand, gaining 4% for the week. The dip in yields and rotation away from technology may have helped as well, propelling the “utes” to the top of this week’s sector rankings (we wrote about utilities gaining power in our LPL Research blog earlier this week).   

Other value sectors, including financials, materials, real estate, and industrials, also outperformed, while the consumer discretionary sector lagged. Technology performance was mixed as declines in Intel (INTC), which guided revenue down because of China chip export constraints, and EPAM Systems (EPAM), which sold off sharply on the IT services providers disappointing outlook, were offset by gains in Taiwan Semiconductors (TSM), which reported a 60% jump in year-over-year revenue, driven by demand in artificial intelligence (AI). Meanwhile, a decline in Tesla (TSLA) weighed on consumer discretionary.  

International Equities: Japan continues to dominate discussions among global asset allocations given the extreme pressure on the yen currency and the presumed multiple rounds of interventions undertaken by the Finance Ministry and the Bank of Japan. However, gains in Europe offset weakness in Japan, enabling the MSCI EAFE Index to end the week positive. The U.K. market was higher as the Bank of England signaled a summer rate cut, while France and Germany posted solid gains for the week. The MSCI Japan Index, in dollars, slipped more than 2% for the week, though the currency-hedged version fared better as the yen weakened.  

Emerging markets slowed down some after a pretty good run the past few months and were little changed this week. South Africa, Taiwan, and Mexico were standout performers to the upside, while India was a big laggard. Currency offered no help this week as the greenback inched higher.  

Fixed Income: Although economic data was sparse, the Bloomberg Aggregate Bond Index was roughly flat on the week as markets continue to price out the path of monetary policy later this year. The week ahead will be an important one as inflation data highlights the economic data releases. Federal Reserve (Fed) Chair Jerome Powell and European Central Bank (ECB) Governing Council member Klaas Knot are also scheduled to speak at a special event organized by Netherlands’ Foreign Bankers’ Association (Tuesday), which will be followed by markets.    

The Treasury Department auctioned off $125 billion of 3-year, 10-year, and 30-year notes this week with mixed, but overall, encouraging results suggesting demand remains solid. Moreover, the J.P. Morgan Treasury sentiment survey data showed active clients’ and all clients’ net Treasury positions moved solidly into net-long territory following the May Federal Open Market Committee (FOMC) meeting. Active client net-long positioning is tied for the fourth-longest in the past three years, while all clients sit modestly net-long as elevated yields are paired with an uncertain economic backdrop. 

Finally, more than 40 investment-grade firms in the U.S. have sold $53 billion of bonds this week through Wednesday, the most crowded three-day calendar since 2021, while high-yield issuers have priced nearly $11 billion, according to data compiled by Bloomberg. The deluge comes as risk premiums on debt worldwide remain tight.   

Bottom line is that despite somewhat mixed results from recent Treasury auctions, positioning and demand for fixed income remains robust.  

Commodities: The Bloomberg Commodities Index edged higher this week. Silver surged nearly 7%, as it tries to catch up with gold and benefits from rising solar panel demand. Gold lagged on the week as data showed Chinese official purchases have slowed, which has begun to raise concerns about the completion of their near-term accumulation quotas. The front-month crude futures contract was flat on the week and was unable to break back above the key 200-day moving average. This warns that the trend is potentially changing in crude. Signs of a weakening U.S. economy and reduced potential demand as a result is weighing on oil, but an improving Chinese economic picture is a clear potential demand offset that should be monitored closely.   

Economic Weekly Roundup

Excess savings appear to have dried up. Consumers have been drawing down excess savings since mid-2021, but as of March this year, excess savings have dried up. Excess savings peaked at $2.1 trillion in August 2021, when many households received support via pandemic-related stimulus. Weak spending, especially on services, also contributed to the rise in excess savings.   

Throughout the more recent spending splurge, households drew down their savings by roughly $85 billion over the past year. Healthy household balance sheets and low mortgage debt servicing will soften the blow. For more details on this important support for consumer spending, check out this LPL Research blog.

The Week Ahead

The following economic data is slated for 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) 

 

Kristian Kerr profile photo

Kristian Kerr

Kristian Kerr drives the broad, house investment strategy for LPL Financial Research. His career includes over 25 years of industry experience.