Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average was up 2.2%, the S&P 500 was up 0.8%, and the NASDAQ rose 0.2%. Foreign stocks (MSCI EAFE) were also up for the week, rising 1.4%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.51%. (Data source: Wall Street Journal)
Economic Outlook
Markets have little worry of a recession currently, but inflation has caused some worry with higher energy prices. April CPI came in at 3.8%, the largest rise since 2023, and producer prices rose 6%. It is yet to be seen if this is temporary due to higher energy prices or if inflation continues to move higher in the coming months. Yields have been on the rise due to higher inflation and rate cuts off the table, and talks of rate hikes are picking up. While this is cause for slight concern, other areas of the economy continue to look strong, such as growth and employment. This has allowed investors not to worry too much about inflation since the overall economic picture continues to be positive.
Dow Reaches All-Time High, S&P 8 Straight Positive Weeks
Markets continued to move higher last week as the Dow closed above 50k and notched a new all-time high. The S&P 500 posted its 8th straight positive week, its longest streak since late 2023. Investor sentiment has completely flipped over the past 2 months as the focus went from Iran to AI spend and tech soaring higher. As always, market headlines move fast, and trying to time these events is always a tough game to play. Although sometimes it is hard, this was another example of why sticking to your long-term investing strategy is typically the best thing to do.
Goldman Sachs Stock Up Over 12% Year to Date, Despite Weak Performance from the Financial Sector
Goldman Sachs (GS), one of the largest companies in the financial sector of the S&P 500, has performed remarkably this year compared to many of its peers, generating a 12% return thus far. On April 13th, the company released its first-quarter results, beating both revenue and earnings-per-share estimates (GS Investor Relations). Since then, investors have responded positively as the stock price has risen nearly 8%. Goldman Sachs also provided a positive outlook for the remainder of the year in both their business and the US economy. The company’s investment banking segment is expected to perform particularly well over the next year, which will ultimately help its bottom line. Goldman is expected to report its Q2 earnings on July 14th, and if the company delivers positive results, it could help mitigate the underperformance of the financial sector as a whole (CNBC).
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Quiz
What has the NASDAQ Composite returned since March 30th? (Scroll Down for Answer)
- 23%
- 26%
- 29%
- 32%
Answer:
2. 26%. The NASDAQ Composite has risen over 26%% since its low this year on March 30th. So far for the year, the NASDAQ is up over 13%, and performance has been fueled largely by investment in artificial intelligence and strong technology earnings from companies like Google and NVIDIA. Technology is the largest sector weighting in the MGO Equity portfolio which has benefited from strong performance in technology.
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