Friday’s S&P 500 Index (SP500) Add 1.54% It closed the week at 5,303.27 points, rising in three of five trading days. Its accompanying SPDR S&P 500 ETF Trust (New York Stock Exchange: Spy) up 1.65% for the week.
A week has passed for consumer inflation data The past five days have not disappointed—Wall Street has set numerous records! For the first time in history for both indexes, the benchmark S&P (SP500) climbed to 5,300 points, and the blue-chip Dow Jones Industrial Average (DJI) broke through 40,000 points. Standard & Poor’s (SP500) has now won four weeks in a row, its longest winning streak since early February.
Without a doubt, the highlight of the week is Tuesday’s Consumer Price Index (CPI) report. But things were heating up even before that. Producer inflation data showed on Monday that both the headline and core producer price index (PPI) rose more than expected in April. However, the market is focused on the fact that the gains were largely driven by a rise in the Portfolio Management Index and that the March numbers were revised downwards.
On Wednesday, the CPI report showed that the overall data rose 0.3% month-on-month, slightly lower than the 0.4% expected. Additionally, the core consumer price index, which excludes food and energy, cooled for the first time since October 2023.
“In a nutshell, CPI analysis: #1 – Things are not getting worse; #2 – Still far from the Fed’s target; #3 – Need for softer economic data; #4 – Best for markets What matters is #1,” Marc-André Fongern, senior analyst at Goldman Sachs, said on X (formerly Twitter).
“Let’s be honest: there are reasons to start cutting rates and reasons not to do so; we’re in a macroeconomic no-man’s land now, where speculation trumps clarity; so if you’re confused, don’t worry, so are central bankers,” he said explain.
Fongern added: “Let’s face it: even though things started to deteriorate starting Monday, the fact that stocks are still trading at all-time highs despite what feels like a 5,250 basis point hike is simply mind-boggling.”
Post-CPI optimism carried over into early trading on Thursday. Coupled with the quarterly report released by US retail giant and Dow 30 component Walmart (WMT) that dazzled investors, it was enough to push the Dow Jones Index (DJI) above 40,000 points. Since first surpassing 30,000 in late November 2020, Wall Street’s most respected index took 873 trading days to reach that level.
In other noteworthy events this week, so-called meme stocks are back in the spotlight. Video game retailer GameStop (GME) rose 179.2% on Monday and Tuesday, a rise that cost short sellers of the stock more than $2 billion in book value.
The epic squeeze brought back memories of 2021, and the action was prompted, or at least instigated, by retail investor Keith Gill, known online as For “Roaring Kitty,” he was one of the key players in the saga three years ago. Read the timeline of developments.
As for the weekly performance of the S&P 500 (SP500), 9 of the 11 sectors ended in the green. Driven by a strong performance from the “Magnificent 7” club, technology stocks topped the list with a nearly 3% gain, ahead of chip giant Nvidia’s (NVDA) highly anticipated quarterly results next week. Industrials and consumer discretionary stocks were among the two-week decliners.
See below a breakdown of the performance of each sector and its accompanying SPDR Select Sector ETF from May 10 to the close on May 17:
#1: Information Technology +2.90%and Technology Select Sector SPDR Fund ETF (XLK) +3.06%.
#2: Real Estate +2.53%and the Real Estate Select Sector SPDR Fund ETF (XLRE) +2.51%.
#3: Healthcare +1.84%and the Healthcare Select Sector SPDR Fund ETF (XLV) +1.89%.
#4: Communication Services +1.70%and Communications Services Select Sector SPDR Fund (XLC) +1.00%.
#5: Finance +1.37%and the Financial Select Sector SPDR Fund ETF (XLF) +1.58%.
#6: Utilities +1.24%and the Utilities Select Sector SPDR Fund ETF (XLU) +1.50%.
#7: Consumer Staples +0.74%and the Consumer Staples Select Sector SPDR Fund ETF (XLP) +0.76%.
#8: Energy +0.73%and the Energy Select Sector SPDR Fund ETF (XLE) +1.20%.
#9: Materials +0.27%and the Materials Select Sector SPDR Fund ETF (XLB) +0.34%.
#10: Consumer Discretionary -0.05%and the Consumer Discretionary Select Sector SPDR ETF (XLY) +0.34%.
#11: Industrial -0.36%and the Industrial Select Sector SPDR Fund ETF (XLI) -0.28%.
For investors keeping an eye on future developments, check out Seeking Alpha Catalyst Watch for details on the actionable events that stand out next week.
