Stock Market Summary
Monday, April 25, 2016
- The major stock market indices were mixed last week. The general direction of the stock market though was mostly positive.
- The Dow Jones Industrial Average gained nearly 0.60%, while the S&P 500 gained just over 0.50% for the week. The Nasdaq Composite suffered a 0.65% decline.
- Once again the Russell 2000 led the major indices gaining nearly 1.40%. The Russell 2000 has now outperformed the S&P 500 three of the last four weeks. Last week’s gain extends its consecutive weekly streak of outperformance to two. This index, which is representative of the small capitalization universe of stocks, has been a laggard and its recent strength is a positive for the health of the overall stock market. Strength in energy, materials and financials have all contributed to this outperformance.
- The money center banks reported their earnings during the prior week, while last week’s earnings reports were dominated by large technology stocks and some large capitalization growth stocks. Unlike the banks in which the reports were greeted positively even though the results were less than stellar, a higher expectation level caused pain in the stock prices of the technology and growth stocks that reported last week. Companies like Alphabet (Google), Intel, Microsoft, Netflix, Starbucks, Visa and Hawaiian Holdings to name a few, were impacted due to earnings and/or revenue for the quarter that missed consensus estimates or an outlook given with the reports that didn’t satisfy analyst’s expectations.
- This week and next week will have the largest number of reports being released during the entire second quarter earnings season.
- Much like last week, the sheer number of earnings reports will overshadow the general market activity with much of the news impacting specific stocks and industries.
- The short, intermediate and long term trends are all higher. The first upside target to watch for will be the November-December highs for the S&P 500. The Dow Jones Industrial Average is marching towards an all-time high, while the Nasdaq Composite and the Russell 2000 are still quite a ways from retaking their recent and all-time highs.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases.
Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice. The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness. References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service. Past performance is not a guarantee of future results.