Financial News for the Week Ending May 4th
The unemployment rate dropped to 7.5% reaching its lowest level since December 2008, and hiring rose by 165,000 in April surpassing expectations. Hiring was also revised up in February and March by a combined 114,000.
U.S. stocks reached new highs to end the week on a positive jobs report. The S&P 500 crossed the 1600 barrier finishing at 1614 and the Dow briefly crossed the 15,000 level before finishing at 14,974 on Friday. For the week, the S&P 500 gained 2.0% and the Dow rose 1.8%. In Europe stocks also were up for the week gaining 1.7%, while Japan saw stocks slide 1.4%. On the positive economic news, the Treasury yield rose to 1.74% as investors moved out of the safe haven.
Consumer spending rose 0.3% in March and consumer confidence bounced back in April.
Home prices continue to be a strong point of the economy as the February reading of the Case/Shiller index showed home prices rose 9.3% from a year earlier. It’s the fastest pace of growth since 2006.
The Fed concluded a two-day policy meeting announcing it would carry on with its bond purchase program and said it could even increase the purchases if inflation or unemployment do not move with their expectations.
Unemployment rose to 12.1% in March in Europe, the highest level since records began, while inflation has fallen to 1.2% in April. The numbers provided more support for action from the ECB which announced it was cutting its key lending rate by 0.25% to a record low of 0.5% in a widely anticipated move in hopes of fighting back against recession the euro zone has entered.
Japan saw its industrial output rise for the 4th straight month in March as the country continues to shows steps toward recovery.
With more than half of S&P 500 companies reporting first quarter profits, 73% have beaten analysts estimates for earnings, but fewer than half have beaten revenue estimates, much of which is due to slowing sales driven by Europe and a rising dollar.
Apple made its first foray in 20 years into the bond market with the largest corporate bond deal in history at $17 billion. The debt was issued primarily to return money to shareholders as much of its cash is tied up overseas.
Facebook posted a 38% jump in revenue on mobile ad sales growth and a 6.8% increase in earnings.
Berkshire Hathaway’s profit skyrocketed up 51% in the first quarter driven by rising profits at railroads and improving operations at its insurance holdings. The numbers surpassed Wall Street expectations.
Reposted from the Raffa Wealth Management Blog.
All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.