The Week in Review: 5/28/2024

“Volatility is a welcome creator of opportunity.” - Seth Klarman

Good Morning,

The market settled last week in somewhat of a mixed fashion…

The S&P 500 and Nasdaq Composite, which reached a fresh all-time high, closed with gains while the Russell 2000 and Dow Jones Industrial Average endured solid losses last week.

The first half of last week featured muted price action due to a wait-and-see mindset in front of NVIDIA's earnings after Wednesday's close. NVIDIA shares surged in response to impressive earnings and outlook, which also bolstered semiconductor stocks and AI-related names.

This did not translate into support for the broader market however, due to a sense that stocks are due for some consolidation.

The PHLX Semiconductor Index (SOX) jumped 4.8% last week, and the Russell 3000 Growth Index climbed 0.9%.

This price action benefitted the S&P 500 information technology sector, which logged a 3.4% gain on the week. The only other sector that closed higher was communication services (+0.3%).

Elsewhere, the energy (-3.8%) and real estate (-3.7%) sectors logged the biggest declines.

Market participants were also reacting to mixed earnings news from a slate of retailers. Target, Lowe's, TJX, AutoZone, Macy's, and others reported quarterly results last week.

Finally, there was also a batch of economic data, which also garnered mixed responses…

The S&P Global U.S. Manufacturing PMI increased to 50.9 from 50.0 while the S&P Global U.S. Services PMI jumped to 54.8 from 51.3.

The New Home Sales Report for April was weaker than expected, April Durable Orders were stronger than expected, and the final reading of the University of Michigan's Consumer Sentiment survey, which showed that year-ahead inflation expectations slowed to 3.3% from 3.5% in the preliminary reading.

The 10-yr note yield settled four basis points higher this week and the 2-yr note yield settled 13 basis points higher at 4.95%.

Markets were closed yesterday in observance of Memorial Day. Our markets are trading mixed this morning.

Have a great week!!

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