Author: Chad Payne

Weekly Market Update | May 12, 2024

May 12, 2024

Volume 11, Issue 19

Weekly Recap

The S&P 500 neared its all-time high last week and recorded its third consecutive weekly gain as no (at least, little) news was seen – as it generally is – as good news. The other major indexes also advanced, with value stocks generally outperforming growth shares. Market volumes were especially low over much of the week, however, with Wednesday marking the lowest notional (in terms of the value of shares traded) session of the year and its third-lightest volume (in terms of number of shares traded) session.

The quiet trading week appeared to reflect a generally light and unsurprising economic calendar, although some individual stocks moved sharply in response to first quarter earnings releases. Most prominently, perhaps, Walt Disney shares fell 9.5 percent on Tuesday after the company beat earnings estimates but warned that subscriber growth in its online streaming business was likely to slow. Likewise, a prediction for slowing revenue growth appeared to lead to an 18.6 percent drop in shares of online retail platform Shopify on Wednesday. A surprise rise in weekly jobless claims seemed to dominate the week’s sparse economic calendar. The number of people claiming unemployment benefits rose to 231,000 in the week ended the previous Wednesday, its highest since last August. Likewise, continuing claims broke a four-week downward streak and rose to 1.79 million.

Friday brought another sign that the labor market and broader economy might be cooling. Before the start of trading, the University of Michigan reported that its preliminary index of consumer sentiment in May tumbled unexpectedly to 67.4, down from a final reading of 77.2 in April and marking its lowest level in six months. “While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions,” the survey’s chief researcher noted. “They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead.” The yield on the benchmark 10-year U.S. Treasury note ended last week basically unchanged after dipping to a nearly one-month intraday low on Tuesday. For the week, yields on shorter-term securities drifted a bit higher; longer-term yields drifted a touch lower.

Market Monitor

A full listing of market performance data is available here. (“Don’t Quit Your Day Job”) offers helpful investment calculators here, including one that shows total returns for individual provides reams of data on individual stocks, including the ability to track total return — and just about anything else — over time.

In the News

Evidence is stacking up that the U.S. economy has slowed, led by the formerly red-hot services sector.

In the week ending May 4, the advance figure for seasonally adjusted initial jobless claims was 231,000, an increase of 22,000 from the previous week’s revised level. The previous week’s level was revised up by 1,000 from 208,000 to 209,000. The 4-week moving average was 215,000, an increase of 4,750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 210,000 to 210,250.

First quarter earnings beat expectations, largely due to wider profit margins

According to its trustees, on its current course, the Social Security Retirement Fund will run dry in 2033.

Young Americans are starting out with more credit-card debt than generations before them. Maybe early retirement isn’t all it’s cracked up to be.

Charts of the Week

Good Reads

I found the following articles to be of note. Some may be of interest only to advisors while others are aimed more broadly. You may hit paywalls below; many can be overcome here.

This is the best thing I saw or read recently. The funniest. The most powerful. The most depressing. The best podcastKarmaOver-optimizationGood model for universities to follow. Talent. A song created entirely by AI (duh). WinnerRunning

Just 46 percent of people expect to be working past age 62, a record low, while 31 percent think they’ll be working past age 67.

“Stoic detachment combined with emotional awareness is the perfect combination for stocks. Feel the fear, but let reason decide.” ~ Joel Tillinghast

Securities and advisory services are offered through Madison Avenue Securities, LLC, a member of FINRA and SIPC, a registered investment advisor. This report provides general information only and is based upon current public information we consider reliable. Neither the information nor any opinion expressed constitutes an offer or an invitation to make an offer, to buy or sell any securities or other investment or any options, futures, or derivatives related to such securities or investments. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation, and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment, or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Diversification does not guaranty against loss in declining markets.

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