• US stocks have traded modestly lower over the past week as earnings season reaches full crescendo. Results continue to vary widely, with strong numbers from major tech companies and continued weakness in regional banks and consumer discretionary segments. Among cyclical sectors, the market appears highly focused on 2023 guidance, as a number of companies with positive earnings results have sold off sharply in the face of weak revenue and/or earnings guidance.
• Despite some meaningful positive earnings surprises, there appears to be a risk-off sentiment in markets as gains continue to be very narrowly concentrated. Moreover, per Bloomberg, money management firms and forecasters are highly divided on economic outlook with a growing number of firms voicing concern about inflation along with lingering issues with banks and credit conditions.
• Over the next week, attention will also be focused on key economic data releases, notably first quarter GDP, as well as Core PCE inflation and personal expenditure numbers. These data will likely be critical to shaping the Federal Reserve’s views ahead of its next policy meeting in early May.
DISCLAIMER: The information provided in this blog post is for informational purposes only and should not be construed as financial advice. Investment decisions should be based on individual financial goals, risk tolerance, and consultation with a qualified financial professional.