Standard & Poor's 500 (SP500) on Friday 1.54% added The week ended at 5,303.27 points, recording gains in three sessions out of five. The accompanying SPDR S&P 500 ETF (NYSEARCA: SPY) rose 1.65% For the week.
It's been a turning week with consumer inflation data In any event, the past five days haven't been a disappointment – they've been records galore on Wall Street! In a historical precedent for both indices, the Standard & Poor's index rose (SP500(The Dow Jones Industrial Average rose by 5,300 points)DJI) exceeded 40,000 points. Syrian Pound (SP500) is now on a four-week winning streak, the longest winning streak since early February.
Undoubtedly, the Consumer Price Index (CPI) report was the highlight of the week. But things were hot before that, too. Producer inflation data on Monday showed a larger-than-expected jump in both the headline and core producer price index for April. However, markets focused on the fact that the advance was largely driven by a rise in the Portfolio Management Index and that March numbers were revised downward.
On Wednesday, the CPI report showed a 0.3% month-on-month increase in the headline figure, a shade lower than the expected +0.4%. Furthermore, the core CPI, which excludes food and energy, fell for the first time since October 2023. Markets were off to the races after the data, with the S&P 500 surpassing 5,300 and finishing above it for the first time ever.
“CPI analysis, in brief: #1 – Things aren't getting any worse; #2 – Still far from Fed target; #3 – Weaker economic data needed; #4 – For markets, all that matters is #1,” Marc Andre Vongern, a senior associate at Goldman Sachs, said on X (formerly Twitter):
“Let's be honest here: there are reasons to start cutting interest rates, and there are reasons not to do so yet; we are now in a macroeconomic no-go zone where guesswork prevails over clarity; so if you're feeling confused, don't worry, neither will central bankers.” .
“Let's be real: Even if things start to turn around starting Monday, the fact that stocks are trading at record levels despite what looks like a 5,250 basis point rise in interest rates is simply mind-boggling,” Fongern added.
On Thursday, the post-CPI euphoria spilled over into morning trading. That, coupled with the quarterly report from US retail giant and Dow Jones 30 component Walmart (WMT) that wowed investors, was enough to push the Dow Jones Index (DJI) above the 40,000 level. Wall Street's most respected index took 873 trading days to reach that mark since it surpassed 30,000 for the first time in late November 2020. See also – Dow Jones at 40K: Leaders and Laggards Over the Last 10,000 Points.
Another notable event this week is the return of so-called meme stocks to the spotlight. Video game retailer GameStop (GME) saw a staggering 179.2% gain on Monday and Tuesday, an advance that wiped out more than $2 billion on paper for short sellers betting against the stock.
The epic squeeze has brought back memories of 2021, and the event was sparked or at least encouraged by none other than retail investor Keith Gill, known online as Roaring Kitty, who was one of the key players in the saga three years ago. Read the timeline of developments.
Turning to the weekly performance of the S&P 500 (SP500) sectors, 9 of the 11 sectors ended in the green. The technology topped the leaderboard with a nearly 3% rise, driven by strong performance in the “Magnificent 7” club ahead of chip giant Nvidia's (NVDA) quarterly results next week. The industrials and consumer discretionary sectors were the weekly losers.
See below a breakdown of the sector performance as well as the accompanying SPDR sector ETFs from May 10 through the May 17 close:
#1: IT +2.90%SPDR Technology Sector ETF (XLK) +3.06%.
#2: Real estate +2.53%SPDR Real Estate ETF (XLRE) +2.51%.
#3: Health care +1.84%Healthcare Select Sector SPDR Fund (XLV) +1.89%.
#4: Communications services +1.70%Telecommunications Services SPDR Fund (XLC) +1.00%.
#5: Finance +1.37%SPDR Sector ETF (XLF) +1.58%.
#6: Facilities +1.24%Selected Utilities SPDR Fund ETF (XLU) +1.50%.
No. 7: Basic consumer goods +0.74%Select Consumer Staples SPDR Fund ETF (XLP) +0.76%.
No. 8: Energy +0.73%SPDR Energy Sector ETF (XLE) +1.20%.
No. 9: Materials +0.27%ETF Select Sector SPDR Fund (XLB) +0.34%.
No. 10: Consumer Discretionary -0.05%Consumer Discretionary Sector SPDR ETF (XLY) +0.34%.
No. 11: Industries -0.36%SPDR Industrial Sector ETF (XLI) -0.28%.
For investors looking ahead to what's happening, take a look at the Seeking Alpha Catalyst Watch for details of actionable events highlighting next week.