Global equity markets were mostly positive for the week. Japan and China exchanges were closed. U.S. markets underpinned by very solid economic data with personal spending, consumer confidence, factory orders, pending home sales and Q1 productivity all coming in much better than expected. Employment gains were strong (+263,000 jobs created in April) with unemployment now at a 50 year low! US unemployment is now 3.6%, the lowest level since December 1969. Looks like that recession forecast by pundits earlier in 2019 has been called off! S&P 500 and Nasdaq now at all time highs.
Weekly returns to 3 May 2019
(AUD 5-day return far right- hand column)
Technology, Healthcare and Consumer Discretionary the big winners in earnings beats
Earnings scorecard comment from FactSet (26 April 2019):
“To date, 46% of the companies in the S&P 500 have reported actual results for Q1 2019. In terms of earnings, the percentage of companies reporting actual EPS above estimates (77%) is above the 5-year average. In aggregate, companies are reporting earnings that are 5.3% above the estimates, which is also above the 5-year average. In terms of sales, the percentage of companies (59%) reporting actual sales above estimates is equal to the 5-year average. In aggregate, companies are reporting sales that are 0.3% above estimates, which is below the 5-year average.”
Notable company news
A large number of U.S-listed companies reported quarterly earnings last week. A summary for companies we've included in our thematic share portfolios (Vues) can be found here.
- 10-Year Treasury yield: -4 basis points to 2.52%
- Gold: -0.4%
- WTI crude oil: -2.4% to US$61.94
- AUD/USD: -0.34% to 70.18
The week ahead
After last week’s data avalanche, this week’s calendar is light. Inflation data (CPI / PPI) will certainly get some attention given strong GDP and employment numbers. Ex US we will have PMI from China, along with an RBA meeting, plus GDP from the UK.
Chart of the week
Germany’s DAX turning the corner?
Strong results from some of Germany’s largest companies including Volkswagen, Fresenius, Infineon and SAP are helping.