In Markets "In a Nutshell"

Markets “In a Nutshell” for May 6, 2024

Investment Week at a Glance

Stocks finished higher for the week. The Dow Jones Industrial Average rose 1.1%, the S&P 500 was up 0.50%, and the NASDAQ rose 1.40%. Foreign stocks (MSCI EAFE) were also up, rising 0.40%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.50%.  (Data source: Wall Street Journal)

Fed Keeps Rates Unchanged

The Fed left rates where they were as expected in their most recent meeting last week. Fed Chair Powell also stated that conditions around inflation have not improved as much as they would like to see and that a policy change is further down the road than initially thought. Coming into the year, markets had priced in 6 rate cuts coming throughout the year and rallied on these expectations. Now it seems to be in question if we even get to see one rate cut this year which has caused some worry in the market. The good news is that the overall economy has been able to absorb the higher interest rates so far. The labor market remains strong as unemployment is under 4% still but is starting to show some signs of weakness which could lead to the Fed cutting rates. Another factor in possible rate cuts is the election coming up and the Fed trying to not look political. Either way, the Fed goes, they may be criticized by politicians leading up to the election.

S&P 500 Earnings Update

400 companies on the S&P 500 Index have reported their Q1 earnings and 78% have beaten their earnings per share estimates. This is good news for the market as earnings are what typically drive the market in the long run. Although there are headlines here and there that can cause the market to move one way or the other, earnings are what investors care about at the end of the day. If earnings growth continues to be strong, it could push the market even higher despite the worries about, war, inflation, and the election coming up. The other good news is that earnings growth has broadened out from the mega-cap tech companies that led the way last year. When market rallies broaden out that typically is a sign of a healthy market as you don’t want all the gains coming from a handful of large companies.


What is the current unemployment rate?  (Scroll Down for Answer)

  1.    2.5%
  2.    3.1%
  3.    3.5%
  4.    3.9%






















Answer below.



Have a Great Week!

















4.    3.9%.  The unemployment rate ticked up slightly as non-farm payrolls came in at 175,000, considerably lower than the 240,000 estimate.