Week Ahead on Wall Street: Finding Direction

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Heading into the last week of April, market sentiment changed dramatically. The S&P 500 fell below 5,000 for the first time since surpassing that level in February. The rise in Treasury yields is to blame, as expectations for rate cuts have dwindled. In short, some worry has creeped back into the market after a euphoric start to the year.

Let’s put things into perspective: The average drawdown in any given year for the S&P 500 is 16%, yet stocks are only 5% off their highs as of now. If the current pullback doesn’t deepen, it would rank as the third smallest since 1964 and seventh smallest since 1928. So let’s not panic just yet.

Indicators of fear you see during deep selloffs aren’t really present at the moment either, and some might say that’s for good reason. Stocks are still up on the year, and economic indicators such as jobless claims and retail sales reflect an economy devoid of major cracks in the aggregate. That’s not to say that everything is perfect. Housing remains a challenge for example, both for owners and renters, with mortgage rates at their highest levels since December.

We’ll get a closer look this week at how the economy has really been doing at the start of the year. First, gross domestic product – the broadest measure of economic activity – for the first quarter gets released on Thursday. The consensus is seeing a  2.4% annualized growth rate, while the Federal Reserve of Atlanta’s GDPNow Model estimate is 2.9%. That would probably be interpreted as strong, despite being a slowdown from the prior two quarters. And then earnings season picks up steam this week, with 162 companies included in the S&P 500 across various sectors set to report results. This week will be an important one for determining market sentiment moving forward.

Economic and Earnings Calendar

Monday

• March Chicago Fed National Activity Index: This is a monthly index put together by this regional Fed that incorporates 85 indicators from four categories: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.

• Earnings: Ameriprise Financial (AMP), Alexandria Real Estate Equities (ARE), Brown & Brown (BRO), Cadence Design Systems (CDNS), Globe Life (GL), Nucor (NUE), Packaging of America (PKG), Truist Financial (TFC), Verizon (VZ)

Tuesday

• April S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

• April Philadelphia Fed Non-Manufacturing Activity: The Philadelphia Fed’s survey of services executives in the region on business conditions and their outlook.

• April Richmond Fed Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• April Richmond Fed Non-Manufacturing Activity: The Richmond Fed’s survey of services executives in the region on business conditions and their outlook.

• March New Home Sales: While only a minority of home transactions in any given month come from new constructions, these home prices tend to be more cyclical and give insight into developing trends.

• Earnings: Baker Hughes (BKR), Chubb (CB), CoStar Group (CSGP), Quest Diagnostics (DGX), Danaher (DHR), Enphase Energy (ENPH), Equity Residential (EQR), EQT (EQT), Freeport-McMoRan (FCX), Fiserv (FI), General Electric (GE), General Motors (GM), Halliburton (HAL), IDEX (IEX), Invesco (IVZ), Kimberly-Clark (KMB), LKQ (LKQ), Lockheed Martin (LMT), MSCI (MSCI), NextEra Energy (NEE), NVR (NVR), PepsiCo (PEP), PulteGroup (PHM), Philip Morris International (PM), Pentair (PNR), Raytheon Technologies (RTX), Sherwin-Williams (SHW), Steel Dynamics (STLD), Seagate Technologies (STX), Tesla (TSLA), Texas Instruments (TXN), United Parcel Service (UPS), Visa (V), Veralto Corporation (VLTO), W R Berkley (WRB)

Wednesday

• March Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.

• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

• Earnings: Align Technology (ALGN), Amphenol (APH), Avery Dennison (AVY), Boeing (BA), Bunge Global S.A. (BG), Biogen (BIIB), Boston Scientific (BSX), CME Group (CME), Chipotle Mexican Grill (CMG), Entergy (ETR), Ford (F), Fortive (FTV), General Dynamics (GD), Hasbro (HAS), Hilton Worldwide Holdings (HLT), Humana (HUM), International Business Machines (IBM), Interpublic Group of Companies (IPG), Lam Research (LRCX), Masco (MAS), Meta Platforms, Inc. (META), Molina Healthcare (MOH), ServiceNow (NOW), Norfolk Southern (NSC), Old Dominion Freight Line (ODFL), O’Reilly Automotive (ORLY), Otis Worldwide (OTIS), Raymond James Financial (RJF), Rollins (ROL), Synchrony Financial (SYF), AT&T (T), Teledyne Technologies (TDY), TE Connectivity (TEL), Teradyne (TER), Thermo Fisher Scientific (TMO), Tyler Technologies (TYL), Universal Health Services (UHS), United Rentals (URI), Westinghouse Air Brake Technologies (WAB), Waste Management (WM)

Thursday

• Q1 GDP (first estimate): This is the primary measure of economic growth in the United States, it includes consumer and government spending, as well as private investment and net exports. This will be the first reading of Q1 activity.

• March Wholesale and Retail Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.

• April Kansas City Fed Manufacturing Activity: The Kansas City Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

• Earnings: American Airlines Group (AAL), Arthur J Gallagher & Co (AJG), Allegion (ALLE), A O Smith (AOS), AvalonBay Communities (AVB), Bristol-Myers Squibb (BMY), Carrier Global Corp (CARR), Caterpillar (CAT), Cincinnati Financial (CINF), Comcast (CMCSA), CMS Energy (CMS), Capital One Financial (COF), Physicians Realty Trust (DOC), Dover (DOV), Dow Inc (DOW), DTE Energy (DTE), DexCom (DXCM), Eastman Chemical (EMN), Edwards Lifesciences (EW), FirstEnergy (FE), Fair Isaac (FICO), GE Vernova (GEV), Gilead Sciences (GILD), Alphabet (GOOGL), WW Grainger (GWW), Hess (HES), Hartford Financial Services Group (HIG), Honeywell International (HON), Intel (INTC), International Paper (IP), Juniper Networks (JNPR), Keurig Dr Pepper (KDP), KLA-Tencor (KLAC), Laboratory of America Holdings (LH), L3Harris Technologies (LHX), Southwest Airlines (LUV), Mohawk Industries (MHK), Altria Group (MO), Merck & Co (MRK), Microsoft (MSFT), Nasdaq (NDAQ), Newmont Mining (NEM), Northrop Grumman (NOC), PG&E (PCG), Principal Financial Group (PFG), Pool (POOL), Royal Caribbean Cruises (RCL), ResMed (RMD), S&P Global (SPGI), T-Mobile US (TMUS), Tractor Supply Company (TSCO), Textron (TXT), Union Pacific (UNP), Valero Energy (VLO), VeriSign (VRSN), Western Digital (WDC), West Pharmaceutical Services (WST), Willis Towers Watson Public (WTW), Weyerhaeuser (WY), Xcel Energy (XEL)

Friday

• March Personal Consumption Expenditures Price Index: The Fed targets this inflation measure for its price stability mandate and believes PCE to be the best measure of consumers’ spending habits.

• March Personal Income and Spending: These numbers give insight into how Americans are doing, which is important since consumer spending accounts for about two-thirds of economic growth in the United States.

• April Kansas City Fed Non-Manufacturing Activity: The Kansas City Fed’s survey of services executives in the region on business conditions and their outlook.

• Earnings: AbbVie (ABBV), Aon Plc (AON), Ball (BALL), Charter Communications (CHTR), Colgate-Palmolive (CL), Centene (CNC), Chevron (CVX), Fidelity National Information Services (FIS), HCA Healthcare (HCA), LyondellBasell Industries (LYB), Phillips 66 (PSX), Pioneer Natural Resources (PXD), Robert Half International (RHI), Rockwell Automation (ROK), Roper Technologies (ROP), T Rowe Price Group (TROW), Exxon Mobil (XOM)

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