The S&P 500 continued to overlook all the ‘bad news,’ streaking on a 5 week run and up 14%. With a stubborn war, and increasing inflation levels weighing on investors and traders, along with higher consumer prices, the index has continued to post consistent gains. A new Iranian peace proposal gave a glimmer of optimism as last week closed. Brent Crude dropped to $108.17 a barrel, down 2%, with West Texas Crude slipping to the mid-nineties. Technology and Artificial Intelligence stocks rallied Friday, with the general market picking up some steam. Apple’s positive 1st quarter earnings up 3.3% released Friday, sparked the market giving investors good reason to ‘stay the course.’ A majority of S&P 500 companies have reported 1st quarter earnings results “that exceeded 1st quarter earnings year-over-year earnings estimates in aggregate 21%, well above the 5-year average 0f 7.3%,” according to Wall Street Journal Data. “Bears have largely capitulated,” said Mark Hatchett, chief market strategist at Nationwide.
Brent Crude gushed higher Monday as tensions flared, while the market struggled on opening. U.S./Iranian skirmishes in the Strait of Hormuz escalated, with U.S. forces sinking seven Iranian “speedboats.” President Trump said: “ We’ve shot down seven small boats, or as they like to call them, ‘Fast Boats.’ It’s all they have left.” Oil surged, hitting $114.44 a barrel as U.S. Gasoline prices neared $5.00 a gallon. Stocks began to slide as investors and traders feared escalation of the war, and newly released increasing inflation numbers. As expected the bond markets all edged higher. The 10–year Treasury note was up notably to 4.377%, as movement to bonds last Friday and this Monday was significant. According to Jose Torres, senior economist at Interactive Brokers said, “Rising yields are sapping risk appetites on Wall Street.” After finishing at record highs on Friday, Indexes did an ‘about-face’ Monday with the S&P 500 dropping 0.4%, and the NasdaqComposite losing 0.2%. The blue chip Dow Jones Industrial Average led the indexes down, falling 557 points as value stocks lost their foothold along with AI and techs struggling.
Investors and traders hopped into techs Tuesday as memory–chip makers drove related stocks, while the S&P 500 and Nasdaq moved higher. Demand for memory chips by the Artificial Intelligence sector is high thus the semiconductor stocks are benefiting as is the entire technology sector. After major several sell–offs in the precious sector, gold and silver are regaining a foothold. Gold is slowly edging back, presently steady at $4,726.00 a troy ounce, while silver is $80.37 up today nearly $3.00 a troy ounce. Platinum, the ‘forgotten metal, is $2,059.00 a troy ounce, up significantly and consistently the past 10 trading days. Treasury bonds, and utility stocks, along with precious metals have become hideaways for concerned investors in preservation of capital.
Stocks Wednesday were up across-the-board with optimism about peace talks as Iran has capitulated on their previously hard stand regarding nuclear weapons. Investors and traders seized the optimum with heavy buying of technology and AI issues. Fiber optics, glassware stocks needed for AI buildouts have emerged as the ‘new go-to stock sector,’ as recent price appreciations indicate. Software stocks came alive Thursday, as many companies released better than expected earnings. Techs and the Mag 7 collection are reporting impressive results also. Oil slid slightly as Brent Crude settled at $100.06 a barrel.
RUMBLINGS ON THE STREET
Jay Sole, UBS Analyst, Batrron’s – “U.S. consumers’ view of the economy has been somewhat impacted month over month by the Middle East Conflict and rising gas prices. Yet data shows potential for a strong pop in U.S. consumer spending.”
Ulrike Hoffman–Burchardi, global head of equities at UBS Global Wealth Management, WSJ – “Tech is leading the way but earnings growth is broadening, supported by resilient consumer spending and signs of a cyclical upswing.”
Vicky Hollub, CEO, Occidental Petroleum, WSJ – “I think when the dust settles, it’s going to be clear and more bothersome to the world that oil is still incredibly important.”
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