Weekly market overview: What you should know this week

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Vrasidas Neofytou
Head of Investment Research

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Weekly market overview: What you should know this week


All 3 major U.S. stock indices rallied last week, climbing back toward March’s record highs fueled by a better-than-expected Q1 corporate earnings season.

With 92% of S&P 500 companies reporting first-quarter earnings, nearly 80% of firms beat Wall Street forecasts, helping stocks continue to hold up well despite the threat of inflation. (Source: www.advantage.factset.com

Indeed, stocks advanced last week after Fed Chairman Powell reiterated that the bank would not raise interest rates further, which could be seen as something of a relief given a slew of hotter-than-expected inflation prints in recent months.

The 30-stock Dow Jones Industrial Average gained more than 2% last week to 39,512 points, closing eight consecutive sessions higher and recording its best week of the year on improved investment sentiment.

Meanwhile, the S&P 500 Index closed above the 5,220 mark on Friday for the first time since the beginning of April, recording a weekly gain of almost 2 %, while the technology-heavy Nasdaq Composite only gained 1 % to 16,340 points last week due to some profit-taking in the technology sector.

In the week ahead: All eyes will be on the economic calendar this week, with a focus on Fed Chairman Powell's speech on Tuesday and key US inflation data for April (CPI and core inflation) on Wednesday. Initial jobless claims will also be in focus on Thursday after the weekly data surprisingly hit a nine-month high in the first week of May.

The better-than-expected first-quarter inflation data has prompted investors to scale back their expectations for Federal Reserve rate cuts in 2024.



On Wednesday, investors will get their first look at whether this trend continued into the second quarter with the release of the April Consumer Price Index (CPI). Wall Street expects an annual gain of 3.4% for headline CPI, which includes the price of food and energy, a decrease from the 3.5% headline number in March. Prices are set to rise 0.4% on a month-over-month basis, in line with March's rise. (Source: www.finance.yahoo.com)

On a "core" basis, which strips out the food and energy prices, inflation is expected to have risen 3.6% year over year, a slowdown from the 3.8% increase seen in March. Monthly core price increases are expected to clock in at 0.3%, down from 0.4% in the prior month.

April’s CPI inflation print will also serve as a key gauge of whether equities can remain on stable footing after a strong earnings period.



Gold and Silver ended higher last week to $2,360/oz and $28,50/oz respectively, as the weaker dollar and the falling bond yields supported the dollar-denominated and non-yielding bullion.

U.S.-based WTI crude oil fell below the key $80/b support level, pressured by an unexpected increase in U.S. crude inventories driven by a lower fuel demand. U.S. oil inventory levels have risen to the highest levels since June 2023 as refiners process less crude and demand for gasoline has softened.



The DXY-dollar index, which measures the greenback against a basket of currencies, ended last week slightly down to the 105.30 mark, despite the hawkish comments from Federal Reserve policymakers.

Pound Sterling rose to $1.2550 as the BoE kept rates unchanged and the UK economy pulled out of a technical recession. The Bank of England (BoE) held its key interest rate steady at 5.25% while indicating that it could ease policy as soon as June depending on incoming data.

The BoE also updated its economic forecasts, where it now expects inflation to slow more sharply to 1.9% in 2026 and 1.6% in 2027. (Source: www.theguardian.com)

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