On Monday, personal income for February increased .2% and consumer spending increased .1%, while the PCE price index increased .1%. Due to the government shutdown earlier this year, this report was delayed. Also released at the same time was personal income for March which increased .1%, consumer spending which increased .9% and the PCE price index which increased .2%. Investors liked the tame inflation numbers as well as the surprisingly strong earnings reported thus far, and both the S&P 500 and Nasdaq Composite closed at record highs.
On Tuesday the employment cost index for the first quarter saw wages and benefits rise .7% and the Case-Shiller home price index for February rose .2%. Consumer confidence for April rose 5 points to 129.2 and the pending home sales index for March rose 3.8%. More than half of all S&P 500 companies have reported quarterly results and 77% of them have beat expectations. The S&P 500 eked out a small gain to close at a record high, but the Nasdaq Composite took a hit, pulled down after Alphabet reported disappointing revenue.
On Wednesday the ADP employment report saw private payrolls for April gaining a stronger than expected 275,000, and the ISM manufacturing index for April came in lower than expected, losing 2.5 points to 52.8. Construction spending for March dropped .9% and the EIA petroleum status report for the week ending April 26th saw crude oil inventory decline 9.9 million barrels. The Federal Reserve concluded their meeting and, as expected, did not change interest rates. Interesting, they noted that core inflation has declined and is below 2% and Fed Chair Jerome Powell said that the current low inflation level may only be transient. Investors interpreted this as meaning the Fed will not lower interest rates and markets promptly sold off.
On Thursday jobless claims for the week ending April 27th were unchanged at 230,000 and productivity for the first quarter rose a sharp 3.6% while unit labor costs declined .9%. Factory orders for March rose 1.9%, while U.S. crude fell 2.8% to $61.81 a barrel and 10-year Treasuries yielded 2.55%.
On Friday nonfarm payrolls for April grew 263,000, smashing expectations, and the unemployment rate dropped to 3.6%, while average hourly earnings grew .2%. Markets rallied at the opening on the news. Now let’s take a look at some stocks.
Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) shares plunged over 8% Tuesday morning after the tech giant reported that its ad revenue was slowing down. Additionally, the Company also missed analysts’ revenue estimates. For the first quarter, Alphabet reported earnings of $11.90 per share on revenue of $36.3 billion. Total revenue grew by 17% year-over-year, however, that was lower than growth recorded in the first quarter of last year.
Apple Inc. (NASDAQ: AAPL) reported its second quarter financial results after the closing bell on Tuesday, earning $2.46 per share on revenue of $58 billion. Product revenue declined $4.8 billion to $46.5 billion as a result of lower iPhone sales. Overall, Apple surpassed estimates and provided a stronger-than-expected guidance causing shares to rise by 4%.
Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its first quarter financial results after the market close on Tuesday. The chipmaker surpassed estimates for both revenue and earnings, which sent shares 4.4% higher at the opening bell on Wednesday. AMD reported earnings of $0.06 per share on revenue of almost $1.3 billion. Despite the beat, AMD’s revenue has now fallen by 23% year-over-year primarily due to lower revenue in its Computing and Graphics segment.
Square, Inc. (NYSE: SQ) reported its first quarter financial results during Wednesday’s extended trading hours. The Company beat on both top and bottom lines, however, payment volume was weaker-than-expected causing shares to tumble by almost 8% on Thursday morning. Square earned $0.11 per share on revenue of $489 million.
Under Armour, Inc. (NYSE: UA) reported its first quarter financial results before the opening bell on Thursday, with earnings of $.05 per share on revenue of $1.2 billion. The company’s revenue increased by 2% year-over-year, primarily driven by Wholesale and Apparel growth. The sports retailer’s results were better-than-expected and also provided a higher guidance, causing shares to jump over 9%.