Investment Week at a Glance
Stocks finished higher for the week. The Dow Jones Industrial Average rose 0.8%, the S&P 500 was up 1.1%, and the NASDAQ rose 1.3%. Foreign stocks (MSCI EAFE) were also up for the week, rising 0.3%. Bond prices were down for the week, with the 10-year U.S. Treasury ending the week at 4.37%. (Data source: Wall Street Journal)
Strong Earnings Continue to Drive Markets Higher
Last week was the peak of earnings season as nearly 40% of the S&P 500 reported. Alphabet, Amazon, Apple, Meta, and Microsoft were among those to report as well, putting a lot of pressure on companies to deliver in a market at all-time highs. Once again, we saw a strong number of companies beat expectations with 1st quarter S&P 500 earnings growth on track to exceed 14%. This would mark the 6th consecutive quarter of double-digit earnings growth. While many companies still need to report, it seems we are on track to continue this strong run of companies beating expectations.
Big Tech AI Spend
A lot of the growth we have seen in the recent quarters and are expected to see in the coming quarters is due to the spend on AI. Looking at the capital expenditure of Alphabet, Amazon, Meta, Microsoft, and Oracle, in 2020, it was less than $100 billion, it is not expected to cross $800 billion in 2027 alone. This spending has ballooned in recent years as companies look to lead on the AI front. Time will tell if the large investments pay off or if there is some disappointment in the future. As always, there will be winners and losers, it is just yet to be seen who those are.
Walmart stock is up 18% year-to-date and over 180% in the last five years
America’s largest retailer, Walmart (WMT), continues to perform well despite recent market volatility, with its stock up 18% since January. On March 13th, Walmart filed its annual report for the 2026 fiscal year, reporting total revenue of $706 billion and net income of $21.1 billion (Walmart Investor Relations). While revenues grew at only 4.7% from the previous year, the company’s net income grew by 12.6%. This displays Walmart’s increased profitability and efficiency. Walmart is expected to report its Q1 earnings on May 21st, which should reveal to investors how the conflict in the Middle East and rising oil prices have affected the company (CNBC).
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Quiz
What has Bitcoin returned in the last month? (Scroll Down for Answer)
- 10%
- 17%
- 22%
- 27%
Answer:
2. 17%. After falling to a price of $66,000 at the end of March, Bitcoin (BTC), the cryptocurrency, has returned over 17% in the last month, recently reaching prices of $78,500.
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