Mid-Week Market Minute 4.24.24

Stocks Rally as First-Quarter Earnings Reports Beat Estimates 

Stocks rallied this week as stocks in the U.S. looked to rebound from this April’s sell-off. Stronger than expected earnings helped lift stocks higher, as the S&P 500 added more than 2% in early trading this week. Meanwhile, the relentless move higher in interest rates took a breather, helping relieve pressure on asset prices across the board this week.

With analysts forecasting nearly 10% earnings growth this year, corporations were expected to continue to defend margins and grow revenues. As we enter the midway point of this week, more than 25% of S&P 500 companies have reported first-quarter results and nearly 80% have beaten earnings estimates. Just this week, shares of electric vehicle heavyweight Tesla added more than 12% on Wednesday morning despite missing both revenue and earnings estimates. Elsewhere, shares of Visa, Texas Instrument, and Boeing all rallied on better than expected first quarter profits. 

Looking ahead, investors will closely monitor earnings reports alongside key economic indicators. Thursday morning will bring the first estimate of GDP growth for the first quarter. Analysts expect to see a 2.5% annualized real GDP print, while the Fed’s GDPNow model is predicting 2.7% growth, both of which remain well above trend. Separately, Friday’s release of the PCE Price Index will be closely watched as investors remain hyper-sensitive to the Fed’s interest rate forecasts. Economists are expecting core inflation to come in around 2.7% on an annual basis, a modest decline from last month’s 2.8% reading.

Source: GSAM, CNBC, JPMorgan

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