Stocks Closed Higher Last Week on Strong Earnings

The market closed last week higher. Investor sentiment was bolstered by good corporate earnings results from key megacaps. Of the 459 companies of the S&P 500 that have reported earnings, 77% beat consensus predictions. The Dow rode an eight-session winning streak, while the S&P 500 approached a record high. Among the market sectors, only consumer discretionary closed the week in the red. Utilities advanced 4.0% to lead the sectors, while financials, materials, consumer staples, communication services and industrials outperformed.

Weekly Unemployment Claims Reach Highest Level Since August

For the week ended May 4, there were 231,000 new claims for unemployment insurance, an increase of 22,000 from the previous week’s level, which was revised up by 1,000. This is the highest number of weekly claims for unemployment benefits since August 2023. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 27 was 1.2%, unchanged from the previous week’s rate.

Eye on the Week Ahead

Inflation data is in the news this week with the release of the Consumer Price Index for April. Inflation has run hotter than expected over the past few months, raising concerns that the Federal Reserve may move interest rates higher. However, statements from Fed officials seem to indicate that another rate increase is not in the offing. However, unless inflation reverses course, it is likely that the Fed will maintain the federal funds rate for longer than most had hoped.