5/13/24 Weekly Market Commentary

What happened last week…?????????

The S&P 500 (up 1.85%) and NASDAQ (up 1.14%) both recorded three straight positive weeks while the DJIA (up 2.16%) extended its winning streak to four consecutive weeks in the green. All three indices are currently positive for the month as each looks to rebound from the negative returns in April. Previously, each index earned five consecutive months of gains. Year-to-date, performances are as follows: DJIA (4.84%), S&P 500 (9.49%), NASDAQ (8.86%).

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According to FactSet, as of May 10, 92% of S&P 500 companies have reported earnings with 78% having a positive EPS surprise and 59% having a positive revenue surprise. The blendedearnings for the S&P 500 is 5.4%, which would be the highest growth rate since Q2 2022 (5.8%). The blended revenue for the index is 4.1%, which would be the 14th straight quarter of growth. Looking ahead at the upcoming quarters this year, the projected earnings and revenue growth from analysts are as follows: for Q2 2024, earnings growth of 9.3% with revenue growth of 4.6%; for Q3 2024, earnings growth of 8.4% with revenue growth of 4.9%; and for Q4 2024, earnings growth of 17.4% with revenue growth of 5.4%.

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According to the Wall Street Journal, Apple (AAPL) is developing its own chips to run artificial intelligence software in data center servers. Project ACDC (Apple Chips in Data Center) is said to have been in the works for years but the release of its new chip, if ever, is unknown. The report clarifies that Apple’s chips would focus on AI inference, not training AI models like Nvidia’s chips. The company is working with Taiwan Semiconductor Manufacturing Co. on the design and production.

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Tesla (TSLA) is under scrutiny from the National Highway Traffic Safety Administration (NHTSA) over the company’s December recall of more than 2 million vehicles regarding its Autopilot system. The concern stems from reports of 20 crashes from vehicles that received a software update during the recall. The NHTSA seeks documents about the recall by July 1 or Tesla could face fines up to $135.8 million.

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Happening this week…

On Wednesday, the inflation rate year-over-year for April is expected to decrease to 3.4% from 3.5%, which marked back-to-back months of higher readings. The rate peaked at 9.1% in June 2022. Meanwhile, the core inflation rate year-over-year for April is forecasted to decrease to 3.7% from 3.8%, which is near a three-year low.

Thanks for Reading!

- The Rockline Team

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.