Market Update
Stocks ended April lower, with each of the benchmark indexes enduring their first downturn in several months. Throughout April, investors had to factor in the escalating crisis in the Middle East, increased spending to support Ukraine in its war with Russia, rising inflation, and the Federal Reserve's apparent intent to hold interest rates at a two-decade high. With April's decline, the S&P 500 was on track to end a streak of five straight monthly gains. Consumer confidence fell in April to its lowest level since 2022. While the labor market continued to support job growth, labor costs increased the most in a year, driven higher by wage pressures that are helping to push inflation higher.
At the mid-point of Q1 corporate earnings season, S&P 500 companies continued to generally outperform expectations. Overall, roughly 46% of the S&P 500 companies have reported actual earnings results. Of those companies, 77% have reported earnings per share above estimates. Multiple sectors have reported favorable earnings results, including communication services, financials, industrials, and information technology. Health care has lagged.
May begins with the Federal Open Market Committee meeting. The employment figures for April are also available early in the month. Investors will also be focused on corporate earnings throughout the month and impact of ongoing tensions in the Middle East. Despite April's slide, May has historically been a positive month for stocks.
International Markets
Eurozone inflation remained at 2.4% in April, in line with expectations. Prices advanced for food, alcohol, and tobacco, while energy prices decreased. For April, consumer prices rose 04%. On a positive note, Eurozone gross domestic product expanded by 0.3% in the first quarter, the fastest growth rate since the third quarter of 2022. China's manufacturing activity expanded in April for the second consecutive month, albeit at a slower pace than in the previous month. The Japanese yen weakened against the dollar as U.S. interest rates have climbed while Japan's rate has remained near zero. The result is money has flowed out of the yen and into higher-yielding assets. For April, the STOXX Europe 600 Index fell 0.4%; the United Kingdom's FTSE gained 2.9%; Japans Nikkei 225 Index declined 3.5%; and China's Shanghai Composite Index gained 1.0%.
On A Personal Note
Jeff and Peggy started the process of remodeling their kitchen. Jeff had thought they were finished with those kinds of projects, but then he found out that they were not. Drew and Stephanie celebrated their twenty-first anniversary. Everyone was very happy for Drew and very sympathetic to Stephanie. Chris spent most weekends, and some weekdays, in April at various soccer tournaments and games for his daughter. Lisa and her family celebrated Shelbi's graduation from Bowling Green State. This was Shelbi's first in person graduation ceremony, she was a 2020 high school grad so that graduation ceremony was virtual. It was a very proud and emotional day! Sam spent the weekend hiking in Gatlinburg, exploring Alum Cave Trail and Grotto Falls in the Smokey Mountains. It was great to get away and spend time in nature! Taylor went to see the solar eclipse in the path of totality with her husband, brother-in-law, and friend in Oxford, Ohio. It was truly a once in a lifetime experience!
