The shares closed on Friday after new record highs on Thursday. The S&P 500 fell 0.72 percent on Friday, the Dow 0.54 percent and the Nasdaq 0.85 percent. The Russell 2000 Small Cap Index was the biggest hit, losing 1.26 percent.
During the week, the S&P 500 Index gained 0.02 percent while the Russell 2000 Index, Nasdaq, and Dow Jones Industrial Average fell 0.36 percent, 0.39 percent and 0.50 percent, respectively.
SPDR Energy (XLE) rose 3.89 percent this week, SPDR Financial (XLF) rose 2.49 percent and SPDR Communication Services (XLC) rose 2.13 percent. This week crude oil fueled energy as it hit $ 65 a barrel again before pulling back. For the first time since February, natural gas hit $ 3 per mmBTU. First Trust ISE Revere Natural Gas (FCG) rose 6.03 percent over the course of the week.
Twitter (TWTR) stock plunged 15.16 percent on Friday, driven by the advertising division’s declining earnings in the first quarter.
According to the government’s first estimate, economic growth in the first quarter was 6.4 percent. Consumer spending on cars, travel, and restaurants all contributed to growth. Business investment rose as did government spending. Personal consumption accounted for 7.0 percent of GDP growth. The growth was offset by falling inventory levels at retailers. When stocks go up it is converted as GDP growth, but when stocks go down it is subtracted from GDP. As retailers need to rebuild their inventory levels in the future, this is positive for growth in the coming quarters.
The Conference Board saw significantly higher consumer confidence in April. The Current Conditions sub-index reached its highest level since the lockdowns began in March 2020. Consumers are also more optimistic about the future than they have been in the past two years, a sign that the reopening has raised the outlook.
The Bloomberg Dollar Spot Index rose 0.75 percent on Friday. The 10-year Treasury note yield on Friday remained fairly stagnant at 1.63 percent for the day. Over the course of the week, the yield increased only marginally by 0.1 percent.
Foreign stocks were hit hard by the dollar rally. Both iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) rose for the week from Thursday, but Friday’s losses made them fall 1.23 percent and 1.17 percent for the week, respectively.
On Friday, West Texas Intermediate crude oil prices fell 2.3 percent to $ 64 a barrel during the day.
Gold futures (GC = F) rose just 0.03 percent on Friday to $ 1,768.80 an ounce. On the other hand, silver futures (SI = F) rose a modest 0.53 percent on Friday to close at $ 25.92 an ounce.
The US economic data was encouraging. The GDP rose in the first quarter compared to the previous quarter by 4.3 percent and by 6.4 percent compared to the previous year. In addition, consumer spending rose 10.7 percent due to infusions of direct federal stimulus payments, which is around 70 percent of total economic growth. The SPDR fund (XLY) for the discretionary consumer discretionary sector rose 0.39 percent on Friday.
Personal income was the grand winner, following Friday’s direct stimulus checks, with a 21.1 percent monthly increase from February to March, above the projected 20.3 percent increase. The personal savings rate for March also rose to 27.6 percent, the second-highest savings rate in history after the record of 33.7 percent in April last year.
Unemployment data released earlier in the week showed that initial jobless claims fell by 13,000 to 553,000. This is the lowest level since the pandemic began. The third week in a row of reduced initial applications suggests a surge in the labor market recovery, which is still around 200,000 more initial jobless claims higher than before the pandemic broke out.