Market Moves and Financial Grooves

Ladies and gentlemen, gather 'round, for I have some news that will tickle your funny bone and enlighten your financial senses. This week, the major averages decided to show some love, with the S&P 500 strutting its stuff for a third consecutive weekly gain, and Nasdaq dancing its way to a sixth-straight week of glory. I tell ya, it's been a streak longer than my monologues, matching the longest run we've seen since December '19 into January '20.

Now, let's take a look at the sectors, shall we? They were all higher, though a tad mixed like a cocktail on a Friday night. We had some shining stars, like the FANMAGs – Netflix and Amazon – showing off their moves with a 5.7% and 3.5% gain, respectively. Joining the party were the athletic apparel darlings, Lululemon, strutting their stuff with a 7.4% increase. And let's not forget the department stores, banks, credit cards, rails, managed care, hospitals, industrial metals, and oilfield services. They were all dancing to their own beats, showing us that there's rhythm in every corner of the market.

But, my friends, there were some wallflowers too. Auto parts retailers, parcels and logistics, biotech, pharma, fertilizer, and E&Ps decided to take a breather, resting their feet and letting others take the spotlight. And treasuries? They were firmer across the curve, though they ended off their best levels after a big Friday selloff. Seems like they needed a little break before hitting the dance floor again. As for the dollar index, well, it couldn't resist a little downward slide, breaking a three-week streak of gains. Even the gold joined the fun, showing off its fancy footwork with a 1.3% gain, its first in four weeks. Oh, and WTI crude decided to break its two-straight weekly gains and take a little dip of 1.3%. Hey, even dancers need a break now and then.

Now, let's move on to the thrilling part of the story, my friends. What happened this week, you ask? Well, the market was dealing with a bunch of moving pieces, like a symphony trying to find its harmony. One of the sparks that ignited the fire was a repricing around June Fed expectations. The odds of a June rate hike were slashed by nearly 50 basis points to around 30%, as the market decided to take a breather on the hike train. But fear not, my dear investors, for the market pricing for the December median fed funds rate is still holding strong at around 5%. That's right, no rate cuts by year-end, folks.

And let's not forget the Senate passing that debt ceiling legislation on Thursday, soon to be signed by our beloved President Biden. Ah, the sweet sound of relief, just in time to avoid any financial dance disasters. There were also positive takeaways from the economic data, supporting the soft landing narrative. Sell-side analysts were all like, "No worries, folks, it's just a smooth descent." They downplayed potential headwinds, such as the resumption of student loan repayments and the TGA rebuild. It's all good, they said.

But wait, my friends, there's more! FOMO scrutiny made an appearance, and US equities saw their first inflow in seven weeks. Tech even had the biggest inflow on record. Oh, the thrill of the chase! But let's not get too carried away, shall we? There are still some headwinds on the horizon. Although the odds of a June hike came down, markets are fully pricing in a July hike. And those analysts over at Reuters, bless their hearts, expect the upcoming SEP to show upside risk to the rate path. Narrow breadth and market leadership remain a risk, as some strategists warn that positioning risks are now biased toward profit-taking. They want to rain on our parade, folks, but we won't let 'em!

Now, let's move on to the corporate world, where the earnings season is reaching its grand finale. We had some retail earnings at the very tail end, and boy, did they bring some surprises. We had AAP taking a nosedive with a 39.8% decline. Ouch! But fear not, for there were some bright spots too, like M with a 7.5% gain and JWN with a 9.2% boost. It seems like the US consumers are getting a little cautious, shifting away from those higher-end goods and big-ticket purchases. Can't blame 'em, we all need to budget our dance moves, don't we?

And let's not forget the software and cloud results. CRM had a slight stumble with a 1.1% decline, but hey, they had a big run this year, so we'll cut 'em some slack. Some positive takeaways came from MDB, with a whopping 32.8% surge, and NTAP showing off their cloud momentum with a 1.7% gain. But not everyone was feeling the rhythm. CRWD and OKTA decided to take a step back with declines of 1.8% and 16.2%, respectively. And oh, AI! They had a 2.1% decline, raising concerns about those AI valuations. Seems like even the machines need a little dance lesson every now and then.

Now, my friends, let's wrap this up with a little glimpse into the S&P 500 sector performance. We had the Consumer Discretionary sector taking the lead with a 3.27% gain, followed by Real Estate, Materials, Industrials, Healthcare, and Financials, all showing off their moves. But hey, not everyone can be a star, right? Consumer Staples, Utilities, Communication Services, Energy, and Tech had some smaller gains, but they still joined the party.

So, my dear investors and financial enthusiasts, that's the scoop for this week. The market dance continues, with some twists and turns, ups and downs, but always full of surprises. Remember, my friends, in the grand scheme of things, it's not about the steps you take, but the joy you find in the rhythm. Keep on dancing, and may your investments always be in tune with the beat of the market!

***Disclaimer - For entertainment purposes only. Morgan Freeman did not write this and is not associated with this publication, its writers, publishers, or other people or entities associated with this account***