Market Update / Earnings Wrap – Monday Morning Market Memo – May 15, 2023

Market Update / Earnings Wrap – Monday Morning Market Memo – May 15, 2023

The major stock market averages were mixed/little changed last week. The Dow Jones Industrial Average dropped 1.1% to 33,301 – the NASDAQ Composite logged its third straight week of gains, rising .4% to 12,285 – while the Standard & Poor’s 500 Index nudged .3% lower to 4,124, booking back-to-back weekly losses.

Items weighing on the market last week included a drop in consumer sentiment (which came in well below expectations), an increase in inflation expectations, ongoing worries around the banking sector, and rising concerns over the U.S. debt ceiling. Overall, recession fears have been increasing and acting as a headwind for the stock market.

Looking to the week ahead, it’s what we refer to as retail week. The April Retail Sales report is due out Tuesday, with markets expecting the U.S. Census Bureau will report spending rose .7 percent. Retailers reporting earnings this week include Walmart, Home Depot, Target, Ross Stores, Foot Locker, and TJX Companies. Away from retailers, other companies reporting this week include Deere, Cisco Systems, Jack in the Box, and Take-Two Interactive.

Despite some fresh earnings action this week, investors have already made up their minds on how this earnings season measured up, which was originally anticipated to be troublesome. For the first quarter of 2023, with 92% of S&P 500 companies having reported actual results, 78% have reported a positive Earnings Per Share surprise, and 75% have reported a positive revenue surprise – according to FactSet. We would describe these results along the lines of better-than-expected, or perhaps more accurately, as better-than-feared.

Remember, earnings are the mother’s milk of stock prices!

As always, don’t hesitate to contact us with any questions or if you would like to set up a meeting.

All the best – Southport Station Financial Management, LLC