Last week was another fascinating week in the markets. It also ended a difficult month, but will the April showers bring May flowers? Depending on the economic data du jour, it seemed like most days last week (and recent weeks for that matter) investor sentiment zig and zagged regarding whether to be risk-on or risk-off, whether the economy was growing or slowing, if inflation was falling or rising or whether the Fed would cut or raise short-term interest rates next. Last week was the end of a tough month. Notably, while the stock market is still holding onto gains for the year, the bond market, at least looking at the Aggregate Index, is down on the year. The overall bond market is also sporting a loss over the last year, 3-years and 5-years. And this is even before inflation factors into the real returns. It has been quite the bear market for bonds.

In the end though, again it was a good week for the stock and bond markets. Stocks rose about 1% and 10-year Treasury yields dropped from 4.6% to 4.5%. The latter was important, as the march to 5%+ yields has at least been temporarily halted. The key data last week was Friday’s employment data. While it still showed modest growth and another unemployment rate below 4% (the longest stretch of such readings in decades), it was below expectations, as was wage growth. Most economic growth data had been surprising to the upside not the downside in recent months, but last week was an exception. This, along with oil prices dropping yet again last week, seems to take away a few of the short-term pressure points for the stock and bond markets. Economic growth expectations also dropped last week for 2Q24 GDP to 3.3% (from 3.9%) according to GDPNow.

As for this coming week, it is a quiet week for economic data. We will get more corporate earnings data though. It has been a good earnings season so far. With 80% of the companies having now reported, the year-over-year earnings growth is projected to be 5%. If that holds, which it likely given that over 75% of companies have beat earnings expectations so far this earnings season, it will be the best quarter for earnings growth in nearly two years.

While some of the short-term storm clouds have dissipated of late, there are some interesting markets making some notable moves. We have recently written about commodity prices such as copper and what that might be signaling regarding higher-than-expected growth for the global economy. It is also notable that China and the emerging markets in general have been on a tear of late too. Are those sharp rallies just a dead cat bounce (i.e, just. short-term bounce in price before faltering again), or the beginning of something more substantial?

Either way:

 

Stay invested. Stay diversified. Stay disciplined.

 

If you have any questions or comments, please let us know at strategists@brinkercapital.com or at rusty@orion.com. Thank you for your time and trust. See you next week!

 

 

Get Your Own Market Commentary

Client-Friendly Weekly Wire

Want a version of Weekly Wire you can send directly to your clients? Subscribe to our Weekly Wire newsletter and get a client-friendly version every Monday. Simply download, add your firm's logo, and use with your clients!

 

Key Data

Stocks, Bonds, Alternatives, & Real Assets as of May 3, 2024

Security Name

Risk Score

1 Wk

1 Mo

QTD

YTD

1 Yr

3 Yr Ann.

Global Equities (60% US, 40% Intl)

100

1.03%

-0.88%

-1.62%

6.20%

21.16%

4.96%

S&P 500 Total Return

102

0.56%

-1.53%

-2.32%

7.99%

27.32%

8.62%

Dow Jones Industrial Average

97

1.14%

-1.07%

-2.76%

3.21%

18.20%

6.42%

NASDAQ 100 Total Return

122

0.98%

-1.47%

-1.96%

6.59%

38.46%

9.93%

TV Benchmark

107

0.89%

-1.36%

-2.35%

5.93%

27.99%

8.32%

Morningstar US Large Cap

102

0.65%

-1.28%

-1.90%

8.96%

30.22%

8.92%

Morningstar US Mid Cap

113

0.24%

-2.58%

-3.90%

4.62%

20.75%

3.59%

Morningstar US Small Cap

125

1.13%

-2.02%

-4.20%

1.25%

19.89%

-0.21%

Morningstar US Value

98

0.19%

-2.41%

-3.40%

4.73%

18.00%

7.33%

Morningstar US Growth

126

1.22%

-1.92%

-3.53%

4.50%

28.36%

2.05%

MSCI ACWI Ex USA 

98

1.63%

0.23%

-0.33%

4.47%

11.94%

1.24%

MSCI EAFE 

101

1.66%

-0.30%

-1.15%

4.70%

11.47%

3.62%

MSCI EM

98

2.03%

2.00%

2.04%

4.53%

12.89%

-4.62%

Bloomberg US Agg Bond Index

27

1.17%

-0.51%

-1.29%

-2.06%

-0.66%

-3.15%

Bloomberg Commodity Index

70

-1.43%

-0.12%

2.40%

4.64%

5.32%

6.85%

Wilshire Liquid Alternative Index

25

0.08%

-0.53%

-0.64%

2.50%

7.19%

1.16%

US Dollar

10

-0.28%

0.46%

0.72%

3.91%

3.28%

4.87%

Bloomberg US Treasury Bill 1-3mo

1

0.10%

0.47%

0.51%

1.84%

5.50%

2.83%

Source: Morningstar

The TV Benchmark represents an average of the S&P 500, Dow Jones IA, and NASDAQ 100 return indexes. The Orion Risk Score represents risk relative to the global equity market.

 

 

Interest Rates as of May 3, 2024

Rate

This Week

1 Wk Δ%

13-Wk Treasury Yield

5.23%

-0.01%

10-Yr Treasury Yield

4.50%

-0.12%

Bloomberg US Agg Yield

5.18%

-0.15%

Avg Money Mkt Yield

5.13%

0.01%

Avg 30-Yr Mortgage Rate

7.31%

0.28%

Sources: Yahoo Finance, S&P Global, Crane Data, BankRate

 

 

Key Economic Data Last Week

Data Point

Expectation

Actual

ADP Employment

183,000

192,000

ISM Manufacturing

49.9%

49.2%

FOMC Interest Rate Decision

Pause

Pause

Nonfarm Payrolls

240,000

175,000

US Unemployment Rate

3.8%

3.9%

Sources: MarketWatch, First Trust

 

 

Key Economic Data This Week

Data Point

Expectation

Release Date

Consumer Credit

$15.0B

5/7/24

Wholesale Inventories

-0.4%

5/8/24

Consumer Sentiment

76.0

5/10/24/td>

Source: MarketWatch

 

 

More Just for You

Want More Resources?

Unlock a wealth of market commentary resources from Rusty Vanneman, Orion CIO – Wealth Management, and his team.

The views expressed herein are exclusively those of Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor, and are not meant as investment advice and are subject to change.
An index is an unmanaged group of assets considered to be representative of a select segment or segments of the market in general, as determined by the index manager for the purposes of managing a specific index. You cannot invest directly in an index.
The CFA® is a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. To learn more about the CFA charter, visit www.cfainstitute.org.
The CMT Program demonstrates mastery of a core body of knowledge of investment risk in portfolio management. The Chartered Market Technician® (CMT) designation marks the highest education within the discipline and is the preeminent designation for practitioners of technical analysis worldwide. To learn more about the CMT, visit https://cmtassociation.org/.
Think2perform’s Behavioral Financial Advice program integrates traditional finance practices with psychology and neuroscience to improve emotional competency and decision-making behavior that increases effective usage of the financial plan with clients. To obtain the Behavioral Financial Advisor (BFA) designation, participants must complete a self-directed course, which takes 20-30 hours to complete, and includes a mix of interactive exercises, videos and case studies. To learn more about the BFA, visit https://www.think2perform.com.
Wealth Management services offered through Orion Portfolio Solutions, LLC d/b/a Brinker Capital Investments a registered investment advisor.

Compliance Code: 1 1 1 2, Brinker Capital Investments, May 6, 2024