Earnings reports and economic news led to a volatile week with the S&P 500 closing at 5,099. On Monday the S&P 500 crossed back above the 5,000 level, while on Tuesday we had one of those gains of over 1% days. Things settled down on Wednesday as we closed flat, awaiting the after the bell Meta quarterly report. Revenue and earnings came in above expectations, but AI Capital Expenditures (CAPEX) guidance came in higher. Up from last years $37 billion, 2024 expenditures are now expected to be nearly $40 billion, and shares fell swiftly in after market action. Plowing on before Thursdays opening bell, first quarter GDP came in at 1.6%, lower than the previous quarters 3.4% and below forecasts of 2.5%. When you combine this with Meta, the S&P 500 gapped down at the open, falling over 1% in the first 30 minutes of trading. However, the S&P 500 did claw back about half those losses by Thursdays close, but it still left Meta down over 10% for the day. Inverse to Wednesdays Meta after market action, Thursday saw Alphabet and Microsoft report solid earnings and revenues, but their AI use was booming, driving their shares up 12% and 4% respectively. Also in Fridays premarket, the March Core Personal Consumption Expenditures (PCE) inflation number came in at an annual rate of 2.8%, the same as February but above the expected 2.7%. As such, the S&P 500 gapped up at the open and closed the week with an over 1% daily gain, breaking a 3 week losing streak and 3 weeks of lower intraweek lows. From a technical perspective, the &P 500s 20 day Moving Average (MA) crossed BELOW its 50 MA on Friday with the S&P 500 at 5,099. This unwinds its 20 November 2023 bullish signal when its 20 MA crossed ABOVE its 50 MA with the S&P 500 at 4,547. Next week is busy with Amazon earnings on Tuesday, the Fed rate decision on Wednesday, and then Apple earnings on Thursday. For TSP TIPS we are in a neutral position as we approach the end of April. As such, we recommend no changes to our current investment mix and hopefully a return to bullishness as we head into May.
Earnings reports and economic news led to a volatile week with the S&P 500 closing at 5,099. On Monday the S&P 500 crossed back above the 5,000 level, while on Tuesday we had one of those gains of over 1% days. Things settled down on Wednesday as we closed flat, awaiting the after the bell Meta quarterly report. Revenue and earnings came in above expectations, but AI Capital Expenditures (CAPEX) guidance came in higher. Up from last years $37 billion, 2024 expenditures are now expected to be nearly $40 billion, and shares fell swiftly in after market action. Plowing on before Thursdays opening bell, first quarter GDP came in at 1.6%, lower than the previous quarters 3.4% and below forecasts of 2.5%. When you combine this with Meta, the S&P 500 gapped down at the open, falling over 1% in the first 30 minutes of trading. However, the S&P 500 did claw back about half those losses by Thursdays close, but it still left Meta down over 10% for the day. Inverse to Wednesdays Meta after market action, Thursday saw Alphabet and Microsoft report solid earnings and revenues, but their AI use was booming, driving their shares up 12% and 4% respectively. Also in Fridays premarket, the March Core Personal Consumption Expenditures (PCE) inflation number came in at an annual rate of 2.8%, the same as February but above the expected 2.7%. As such, the S&P 500 gapped up at the open and closed the week with an over 1% daily gain, breaking a 3 week losing streak and 3 weeks of lower intraweek lows. From a technical perspective, the &P 500s 20 day Moving Average (MA) crossed BELOW its 50 MA on Friday with the S&P 500 at 5,099. This unwinds its 20 November 2023 bullish signal when its 20 MA crossed ABOVE its 50 MA with the S&P 500 at 4,547. Next week is busy with Amazon earnings on Tuesday, the Fed rate decision on Wednesday, and then Apple earnings on Thursday. For TSP TIPS we are in a neutral position as we approach the end of April. As such, we recommend no changes to our current investment mix and hopefully a return to bullishness as we head into May.