Daily market snapshot

Published May 24, 2024
 Woman on couch looking at laptop

Friday, 5/24/2024 p.m.

  • Stocks close higher: Stocks closed higher Friday, recovering their losses from earlier in the week. The tech-heavy Nasdaq closed at a new all-time high. Stocks were down in recent days on expectations of fewer Fed rate cuts this year, driven by the stronger-than-expected Purchasing Managers' Index (PMI) report yesterday. Durable goods orders released this morning were also above consensus estimates. Small- and mid-cap stocks led large-cap stocks on the day*. Sector performance was broad, led by communication services, technology and utilities*. Health care was the only sector lower for the day. In global markets, both Asia and Europe were down on the prospect of higher interest rates for longer. The U.S. dollar was modestly lower versus major currencies. In the commodity space, WTI oil was up, near $78 per barrel, as the summer driving season starts this weekend. Gold was modestly lower, about 4% below the all-time high reached earlier this week.
  • Corporate earnings season winding down: With 96% of companies in the S&P 500 reporting first-quarter earnings results, performance continues to be strong relative to expectations, providing support for the recent rise in stock prices. Of companies that have reported, 80% have beaten analyst expectations, with an average upside surprise of 7.9%*. Year-over-year earnings growth for the first quarter is a solid 6%, the highest rate since the first quarter of 2022*. Earnings growth is forecast to accelerate throughout the year, rising to 11% for the year*. Sector performance is broad, with eight of the 11 sectors reporting year-over-year earnings growth*. We believe continued broadening of earnings performance should allow lagging sectors to catch up and help extend the economic expansion.
  • Bond yields about even: Treasury yields were about flat for the day, with the 10-year yield at 4.47%. Expectations for fewer Fed rate cuts have pushed rates higher in recent days. Our view is that continued signs inflation is abating should keep the Fed on track for at least one rate cut in the back half of the year, which would be favorable for the economy and markets broadly. Lower rates could also increase reinvestment risk for cash and short-term bonds. Extending duration into intermediate- and long-term bonds can help manage this risk by locking in yields for longer.

Brian Therien, CFA
Senior Analyst

*FactSet


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This is for informational purposes only and should not be interpreted as specific investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

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