Market Perspective for April 26, 2019

Stocks continued move higher this week, led by the 1.83-percent return in the Nasdaq. The Russell 2000 Index rose 1.66 percent and the S&P 500 Index 1.20 percent. The Dow Jones Industrial Average slipped 0.06 percent because of earnings misses from 3M (MMM) and Exxon Mobil (XOM).

Healthcare and communication services led sector performance this week. SPDR Healthcare (XLV) climbed 3.61 percent and SPDR Communication Services (XLC) 3.29 percent.  Healthcare provider Anthem (ANTM) gained 11.18 percent after delivering solid results. That sparked a rally in the entire medical provider subsector. Facebook (FB) boosted the communication services sector after it handily beat forecasts. Shares returned 7.41 percent for the week.

GDP growth exceeded expectations at 3.2 percent for the first quarter. The Atlanta Fed’s GDP Now model was the most optimistic at 2.7 percent growth, while the broad consensus was 2.3 percent. Personal consumption, inventory investment, exports, and state and local government spending drove the increase.

Existing home sales hit an annualized pace of 5.21 million in March. New home sales are now at an annualized pace of 692,000, the second highest pace in a decade. Durable goods orders jumped 2.7 percent, more than 5 times the forecast. The University of Michigan’s consumer sentiment survey for April showed an uptick from March. Weekly jobless claims bumped up to 230,000 after hitting 50-year lows.

Earnings season has been overall positive, with approximately one-third of S&P 500 companies reporting.  Among the winners were Microsoft (MSFT), Amazon (AMZN), Facebook (FB), Ford (F), eBay (EBAY), Lockheed Martin (LMT) and Twitter (TWTR). Companies missing estimates included 3M, Intel (INTC) and Exxon Mobil (XOM).

Crude oil slid more than 3 percent on Friday, closing at $62.80.

 

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