Weekly Investment News

 

Stocks finished the week in positive territory, in a session marked by lower trading volumes as a number of major markets prepared for the Bank Holiday weekend. In the U.S., the S&P 500 finished just ahead for the month of May, marking its fourth consecutive monthly rise (U.S. markets are closed today for Memorial Day). Commentary around inflation continues to be a persistent theme in markets and there has been further evidence that supply chain issues are starting to bite in certain economic sectors. In the U.S., new home sales have been dampened somewhat by supply chain disruptions leading to record low inventories with input prices (including labour and lumber) moving higher.

 

U.S. consumer spending continues to rise (11.3% annualised during Q1) which should be an early signal for continuing employment growth, but Friday’s U.S. jobs numbers for May should provide further clarity. First quarter U.S. GDP was unrevised last week at 6.4%, but there were positive changes in some of the underlying components, which saw strong growth in big ticket items such as cars and household appliances.

 

In terms of the Q1 earnings seasons, 97% of S&P 500 constituents have now reported with earnings in total looking likely to be more than 50% higher than a year ago (as per usual, within the context of the trough in 2020). Encouragingly, results have beaten analysts’ expectations by over 23%. That may tell you a little about how accurate the forecasts are, but it is worth noting that expectations were relatively high coming into 2021, so this positive ‘beat’ is good news. CLICK HERE