Weekly Market Review May 3, 2023
Last week's release of the latest U.S. GDP report confirmed that the economy is losing momentum, with GDP slowing to 1.1% in the first quarter, compared with 2.6% in the prior quarter and 3.2% in the quarter before that. Within the GDP data was a bright spot from personal consumption, the primary driver of economic activity, which came in well above overall GDP growth at 3.7%. (Source: The Wall Street Journal)
Tech earnings continue to rebound from a difficult 2022, with Microsoft, Meta, Intel, and Amazon reporting better than expected results last week. Facebook's parent company Meta is standing out above the rest in 2023 as CEO Mark Zuckerberg's "year of efficiency" nears its completion. Like many tech companies, layoffs have improved operating margins at Meta after taking on excessive salary costs in the years immediately following Covid-19. (Source: The Wall Street Journal)
President Biden formally announced he is running for reelection in 2024. Biden will campaign on legislative achievements from the first two years of his campaign while facing continued criticism about his age; he would be 86 years old by the end of his second term. (Source: Associated Press)
This week, we continue earnings season with Apple, who is expected to report a roughly 5% drop in sales from a year ago. It is also a heavy week for economic data with the ISM Manufacturing and Service Index for April, an FOMC interest rate decision on Wednesday, and April employment data on Friday.
JPMORGAN BUYS FIRST REPUBLIC - After losing $100 billion in deposits following the collapse of Silicon Valley Bank, First Republic Bank was seized by regulators and sold to JPMorgan. First Republic unseats SVB as the second largest bank failure in the U.S. at $229 billion. (Source: The Wall Street Journal)
SELL IN MAY AND MISS OUT - Unsurprisingly, the adage "sell in May and go away" is not the best advice. Over the past 40 years, the S&P 500 Index has averaged a 3.2% return from May to August and was higher in 75% of those summer periods. (Source: Edward Jones)
BOSTON BRUINS' HISTORIC CHOKE - The Boston Bruins set a new NHL record for wins (65) and points (135) during the 2022-2023 regular season. However, the bright lights of the playoffs proved too much as they coughed up a 3-1 series lead to the Florida Panthers, who finished 43 points behind them during the regular season. (Source: USA Today).
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