Hope you are all doing well. We are back at new all-time highs. The S&P 500 hit three consecutive daily record highs starting on Wednesday. The index finished 4.5% higher for the week. The NASDAQ’s 6.8% rise also pushed that index to a record high. The Dow’s relatively modest 3.2% increase left it 1.5% below its historic peak. If you have money invested in the market that you plan to spend before the end of the year, now would be a good time to shift that money into something safer. Longer-term money should stay invested. WrestleMania 42 is this weekend. I broke down this week’s update using the finishing moves of the main participants in the first WrestleMania.
The Camel Clutch – Iron Sheik
The U.S. has managed to wiggle the Strait of Hormuz free from Iran’s clutch. Iran has announced that commercial vessels can now freely pass through the Strait of Hormuz during the ongoing ceasefire period in the region. The move is expected to ease tensions in global trade routes and improve market sentiment. Iran’s official statement on shipping access came from its Foreign Minister Abbas Araghchi. He confirmed on Friday that the strategic waterway will remain open for all commercial shipping. He said the decision has been taken in line with the ceasefire in Lebanon. The market exhaled because, at least for now, this ensures the smooth movement of goods. The twin ceasefires in Iran and Lebanon are tenuous at best, so we may still experience some headline-driven volatility in the coming weeks.
The Airplane Spin – Mike Rotunda
The two-week-long downward spiral in oil prices has left oil investors dizzy. The drop accelerated on Friday following Iran’s statement. U.S. Crude traded around $83 per barrel on Friday. That is down from the week earlier and a recent peak of about $113 on April 7. Oil is still up more than 40% but trending in the right direction. Futures markets point to oil prices dropping to between $70 – $75 per barrel by the end of the year.
The Russian Backbreaker – Nicolai Volkoff
For much of the year, the market has been experiencing a backbreaking amount of downside pressure. That pressure has subsided, causing markets to experience another quick V-shaped recovery, similar to what happened last year after the tariff shock of liberation day. April has been fantastic for stocks thus far. Friday’s rally marked the 13th positive trading session in a row for the NASDAQ. That is the longest such streak since 1992. The nearly three-week surge began on March 31 and sent the Nasdaq from correction levels to an all-time high. Each of the major U.S. indexes climbed more rapidly during that stretch than it declined beginning in late February at the start of the war.
The Running Bulldog Headlock – Barry Windham
The explosive momentum of corporate earnings has consistently ended any market drops we have experienced over the past 3 1/2 years. The primary drivers of S&P 500 earnings growth are the sectors least negatively exposed to rising oil prices (energy and tech). For the upcoming quarter, analysts have increased earnings expectations for the technology sector. First-quarter earnings growth is now projected at roughly 45%. That is why growth stocks are regaining their market leadership. For three weeks in a row, we have seen growth outpace value. The run in growth stocks has eroded much of the value style’s year-to-date performance lead over growth. Value still leads year to date because of energy stocks, but expect that to change over the coming weeks, especially if growth stocks meet or exceed their elevated growth projections.
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