Hope you are all doing well. U.S. indexes rose modestly for the second week in a row. This was slower than the rapid advances stocks generated in the first three weeks of April. The S&P 500 and NASDAQ both added around 1% for the week, pushing their record levels higher. The Dow edged up 0.5%, finishing 1.4% below its record set nearly three months ago. April overall was a great month. The NASDAQ rose 15.3% to record its biggest monthly gain since April 2020. The S&P 500’s 10.4% rise was that index’s biggest since November 2020. The Dow advanced 7.1%, its strongest monthly result since November 2024. The famous artist Banksy unveiled a new sculpture this week in central London. I have broken down this week’s update using the names of Banksy’s most expensive pieces.
Love is in the Bin (Sold for $25.4M)
The Fed’s independence, like the artwork, has felt partially self-destructed by its own government. Fed Chair Jerome Powell plans to remain a Fed governor after his term as chair ends this month. This is an uncommon move, but Powell, who has been the subject of attacks from the President and the Department of Justice wants to ensure the Fed remains independent. It is critical that the Fed continue to make decisions based on the data, not on arm-twisting. While the Fed left rates unchanged this week. The expectation is that incoming chairman, Kevin Warsh will push for rate cuts, some say at the behest of the President. I will take Warsh at his word until his actions prove otherwise. He stated during his confirmation that he would not take marching orders from the President on interest rates.
Game Changer (Sold for $23.2M)
U.S. GDP grew at a 2.0% annual rate in this year’s first quarter. The economy gained momentum after posting a 0.5% result in the preceding quarter. This could be a game-changer for investor sentiment, which has been horrible most of the year. Anticipation of a robust economy increases investor confidence, encouraging them to take on more risk and invest in stocks, which can drive up valuations. We are seeing some risk appetite return with the Nasdaq soaring last month and Bitcoin posting its best month (up 11%) in about a year.
Devolved Parliament (Sold for $12.1M)
Oil price volatility is causing a breakdown in political discourse. Germany is the latest ally to scold the U.S. over the war’s impact on oil. Germany is lashing out as it faces an energy crisis with surging prices. Oil again traded in a wide range, briefly hitting the highest level since early April ($110 per barrel) before pulling back late in the week. U.S. crude was trading around $102 per barrel at Friday’s close after ending the previous week around $95. The U.S. has pressured allies to secure their own oil supplies with President Trump questioning why the U.S. should protect shipping lanes for other nations. Expect the back-and-forth rhetoric with Europe to continue. It may cause volatility, but as an investor, you should ignore this war of words because it has little to no long-term impact on stock prices.
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