All-Time Highs Back in Sight

US stocks (S&P 500) jumped +1.9% last week to within reach (0.6%) of its March record high on solid earnings releases. It was a global rally as European equities led the gains up +3%, while YTD leader Japan fell on the week.

“Boring” and slower growth utilities and staples led the week’s gains, up almost +4.0% and +2.4% respectively. This was on the back of “weaker” economic data on greater than expected unemployment claims. This is quite normal sector rotation during the early second quarter with more economically leveraged sectors such as consumer discretionary and technology stocks lagging on the week. This pattern has historically lasted into the month end of May. Historically, higher growth stocks and small cap stocks have led “normal” summer rallies into July 4th weekend and beyond to early August.

On the macro front, investors are waiting on US CPI and retail sales reports on Wednesday and the Philadelphia Fed Manufacturing Index on Thursday. There are several Fed speakers this week, including an event with Vice Chair Jefferson and Cleveland Fed President Mester on Monday and an event with Chair Powell on Tuesday.

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