Stocks Surge On Healthy Earnings Season, Rising Jobless Claims: This Week In The Markets

It's been a quiet week in the markets, marked by a dearth of major economic news and a consistent flow of positive indicators from the first-quarter earnings season.

As of May 7, 424 companies in the S&P 500 have disclosed their earnings, with 78% surpassing earnings expectations and 61% exceeding revenue forecasts.

The S&P 500 continued its upward trend, marking its third consecutive week of gains and nearly recouping losses from April, while the Dow Jones boasted eight consecutive sessions in the green.

Notably, the utilities sector, as tracked by the Utilities Select Sector SPDR Fund XLU, has emerged as the star performer of 2024, outstripping energy and doubling the tech sector’s performance, with some analysts attributing the outperformance to heightened power demand from data centers.

Concerns surfaced regarding a potential job market slowdown following unexpectedly high weekly jobless claims. The figure reached its highest level in eight months.

The University of Michigan's Consumer Sentiment report revealed a sharper-than-expected dip in May, along with a worrying rise in inflation expectations.

Investors are now fully factoring in two interest rate cuts by year-end, beginning in September.

Attention now turns to the forthcoming April Consumer Price Index inflation report on Wednesday and Federal Reserve Chair Jerome Powell‘s remarks in Amsterdam on Tuesday.

Buffett Sells Apple Shares

Warren Buffett‘s Berkshire Hathaway Inc. BRK has cut its stake in Apple Inc. AAPL by 18%, signaling waning confidence as the tech giant faces challenges in its Chinese market.

Apple’s M4 iPads

Meanwhile, Apple unveiled an iPad Pro with a M4 chip and OLED display, and an iPad Air with a M2 chip, enhancing the iPad lineup for the first time since 2022. The iPad Pro starts at $999 for the 11-inch model and $1,299 for the 13-inch model — higher price points than older releases.

Tesla Cuts Jobs

Tesla Inc. TSLA has initiated another round of job cuts in China due to intensifying competition in the electric vehicle market, which is increasingly dominated by local rivals.

Pfizer Settles Lawsuits

Pfizer Inc. PFE has agreed to settle over 10,000 lawsuits related to cancer risks associated with its discontinued heartburn medication Zantac.

Nvidia Leads AI

Nvidia Corp. NVDA has been declared the de facto standard in AI technology by a Goldman Sachs analyst, who said the company will dominate the sector for the foreseeable future.

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