Economic Data and Market Highlights
Global equity markets increased 174 basis points for the week with the S&P 500 jumping 189 basis points. The Dow Jones notched its longest win streak of 2024. Renewed optimism stalked from healthy corporate profits and cooler than expected economic data. Investors’ optimistic outlook on inflation has eased pressure on bond markets decreasing yields. Thursday saw treasury action for longer dated maturities increase with the 10-year treasury settling lower at 4.45%. The Bank of England kept its key rate unchanged Thursday but indicated cutting rates over the coming months. Interest-rate futures are now pricing a 50% chance that the Fed will cut rates at its September meeting per CME group. Thursday saw shares in real estate and utilities lead the S&P 500 higher. Energy stocks like Exxon Mobil and Chevron advanced as oil prices ticked higher. Airbnb retreated and was a standout amongst the losers during the week after the company vacation-rental service outlook for the current quarter was below analyst estimates.
S&P 500 companies have bought back $181.2 billion worth of stocks in the first quarter results indicated, which is up 16% from a year ago during the same quarter. Big tech names are leading the way as names like Meta, Apple, Netflix, and Nvidia are buying back shares. Wells Fargo, Caterpillar, and Altria Group also increased buybacks during the quarter.
Investors are viewing the buybacks as a sign of rising confidence. This increase in buybacks comes after a sharp pullback last year in stocks and repurchased by S&P 500 companies fell 14%. Analysts at Goldman Sachs project a total of companies in the S&P 500 to see repurchases of $925 billion this year and $1.075 trillion in 2025.
The Biden administration is planning to raise tariffs on clean energy products from China. Most notably, tariffs on electric vehicles are expected to quadruple from 25% to 100%. The tariffs will also focus on minerals, solar power, and batteries imported from China. The shift in policy comes as China is showing signs of an uptick in clean energy exports. Chinese officials have dismissed criticisms of their uptick in exports and just last month imposed a levy on imports from the US of a widely used chemical used as a food preservative.
Data Source: Blackrock, Bloomberg, Charles Schwab, CNBC, Goldman Sachs, J.P. Morgan, Morningstar, Morgan Stanley, Standard & Poor’s, and the Wall Street Journal.
Authors:
Jon Chesshire, Managing Director, Head of Research
Michael McNamara, Analyst
Sam Morris, Analyst