An eventful five trading days for Wall Street saw the benchmark S&P 500 (SP500) post back-to-back weekly gains. Sentiment was helped by a Federal Reserve that was much more dovish than expected at its latest monetary policy decision on Wednesday and a significantly cooler-than-anticipated nonfarm payrolls report released Friday. The latter was especially cheered by investors, as stubborn resilience in the labor market has been one of the Fed’s key concerns. Aside from the central bank, this week also saw one of the busiest stretches of the first quarter earnings season, with Amazon.com (AMZN) and Apple (AAPL) being the two most notable names that reported their results. Both tech giants delivered, and Apple (AAPL) in particular shook markets with the unveiling of a record $110B buyback. For the week, the S&P 500 (SP500) added +0.6%, the blue-chip Dow (DJI) rose +1.1%, and the tech-heavy Nasdaq Composite (COMP:IND) climbed +1.4%. Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.
Recent data showing higher-than-desired inflation means it will take more time for the Fed to gain confidence that price pressures are sustainably easing. That was the main message coming out of Jay Powell’s FOMC presser on Wednesday, where he dismissed talk of stagflation after the central bank maintained its key interest rate at 5.25%-5.50% for the sixth consecutive meeting. The FOMC also decided to ease quantitative tightening by slowing the pace of its balance sheet runoff, pushing Treasury yields lower. “Powell adopted a more dovish tone,” noted SA analyst Christopher Robb, but also “expressed confidence that long-term inflation expectations are anchored.” (63 comments)
In a big week for earnings season, Amazon (AMZN) climbed 1.3% AH on Tuesday following Q1 results, which included a beat from Amazon Web Services, but gains were curbed by its sales outlook. While CFO Brian Olsavsky shot down dividend speculation, Amazon revealed it would go all in on generative AI. Meanwhile, Apple (AAPL) jumped 6% AH on Thursday as its Q2 results were better than feared despite iPhone concerns in China. Sales weakness was also seen in categories including the iPad, Mac, and Wearables, but shareholders cheered a record $110B buyback plan and dividend boost. (207 comments)
Pot stocks rose sharply late Tuesday on reports that the DOJ would reclassify marijuana as a less dangerous drug. Moving marijuana to the Schedule III category would make pot federally obtainable with a prescription, and pave the way for significant tax benefits for cannabis companies. Marijuana ETFs like YOLO and MJ soared over 20%, while shares of Canopy Growth (CGC) and Tilray (TLRY) surged 80% and 40%, respectively. The move might have also surprised WSB subscribers, who weighed in on the likelihood of rescheduling just two weeks ago. (64 comments)
Energy ministers from G7 countries reached an agreement on Monday to shut down their coal-fired power plants by 2035. Andrew Bowie, the U.K.’s minister for nuclear and renewables, described the deal as “historic,” and marked a significant step in the direction indicated in last year’s COP28 summit. G7 nations also set a new global energy storage target of 1500 GW by 2030, a sixfold increase from current levels. Last week, the U.S. issued sweeping new rules to crack down on power plant pollution. (98 comments)
It was a busy week for Paramount Global (PARA, PARAA), which received a $26B all-cash offer from Sony (SONY) and Apollo (APO), as well as a deal sweetener from Skydance Media in the guise of $3B more in cash. Skydance’s exclusive negotiating window for its merger proposal expired on Friday, paving the way for Sony-Apollo to begin formal talks. The latest bid from Skydance offered some concessions to frustrated Paramount shareholders, who had pushed back against the original offer as they believed it favored controlling shareholder Shari Redstone. The drawn-out merger talks also led to the departure of Paramount CEO Bob Bakish. (146 comments)
