Last Week Recap:
Mixed economic data led mixed market performance:
Index Week YTD
S&P 500 1.23% 13.14%
Dow 2.67% . 14.33%
Nasdaq -1.51%. 6.95%
Russell 2000 0.23% 15.35%
Although the S&P 500 was up for the week, there was again a big divergence between Value, up 2.8% for the week, versus Growth, down 1% on the week. Janet Yellen may have added to that with her commentary last week when she suggested that rates may have to increase to keep the economy from over-heating. This led to technology stocks selling off as higher interest rates could have an impact on valuations. However, keep in mind that she doesn't really have any say and Fed Chair Jerome Powell has still declared that he will keep rates low for quite some time.
The non-farm payrolls report showed only 260k jobs created in April, significantly less than the expectations of close to 1 million. However, the ADP report showed private sector payrolls increase by 742k in April and new unemployment claims came in with a pandemic-era low of 498k.
The Week Ahead:
Inflation data will come out this week which will be of greater importance as we have seen a significant rise so far and investors will continue to interpret whether this is the start of a longer term trend or just transitory. Earning season will also continue.
Sources: Seeking Alpha, TD Ameritrade, J.P. Morgan, StockTwits, LPL Financial.