Continuing on from last week with our focus on Earnings Season: Starbucks stock cooled off by over 5% after the company missed on both earnings and revenues; Despite beating on both the top and bottom lines, Apple dropped by nearly 4%, in part because the company warned tariffs would take a bite out of profits; Amazon.com stock was little changed even though the company delivered a nice beat on earnings, as commentary surrounding tariffs, trade-policy, and recessionary fears weighed on sentiment.
Setting the overall tone for earnings last week were Meta and Microsoft, which vaulted higher by over 4% and 7.5%, respectively. The tech giants beat on both earnings and revenues and established/continued/guided the theme that Artificial Intelligence is doing just fine, thank you very much. With the positivity surrounding these big tech names, along with continued hopes the U.S. will start reaching trade deals, the S&P 500 has now risen for nine consecutive days, its best streak in 20 years, according to CNBC.
Also in the mix last week was a Jobs Report which came in much stronger-than-expected. The U.S. Department of Labor reported the economy added 177,000 jobs last month (versus expectations for a gain of 135,000) and the unemployment rate held steady at 4.2%. This report helped ease worries over the economy being near, or already in a recession, and contributed to a winning week for the stock market.
For last week in total – the Dow Jones Industrial Average jumped 3% to 41,317 – the NASDAQ Composite gained an impressive 3.4% to 17,978 – and the Standard & Poor’s 500 Index rallied 2.9% to 5,687.
Looking to the week ahead, notable earnings reports will continue to flow in. Companies reporting this week include Palantir Technologies, Ford Motor, Clorox, Advanced Micro Devices, Duke Energy, Uber Technologies, Coinbase Global, and Walt Disney. Also, this week, is a Federal Reserve policy meeting.
Financial markets are not expecting any changes in interest rates, especially after the strong jobs report. However, investors will be closely monitoring the commentary from Fed Chair Powell as it related to the future path of interest rates and the outlook on the economy, especially as it relates to tariffs and the trade war.
As always, don’t hesitate to contact us with any questions or if you would like to schedule a meeting.
All the best – Southport Station Financial Management, LLC