Markets enjoyed a strong week with the S&P 500 rising more than 3% as volatility surrounding the banking system cooled down. No major banks were added to the collection of Silvergate, Silicon Valley, Signature, and Credit Suisse collapses. First Republic Bank (FRC) meanwhile didn’t rebound too much but stabilized a bit after news on Monday that U.S. regulators were considering expanding an emergency lending facility.
Additionally, there was a solid amount of new earnings and economic data reports this week with highlights including the February Personal Consumption Expenditures (PCE) report and a strong lululemon (LULU) earnings call. Alibaba (BABA) also saw its shares surge following the announcement that it will split into six separate business units which will independently raise funds and explore initial public offerings (IPOs).
The February PCE report showed overall and core (excluding food and energy) prices each rising 0.3% following a 0.6% jump in January. Both overall and core prices were projected to increase 0.4% with the lower rise being good news as inflation remains a major concern for investors and the Federal Reserve. Even the 0.3% rise is above the targeted 2% annual rate though, as year-over-year the PCE Price Index is up 5% with the core-PCE Price Index 4.6% higher during that time.
The PCE report also showed personal income and spending rising 0.3% and 0.2% in February respectively after they had increased 0.6% and 2% the previous month. The monthly change mostly met estimates with analysts having expected income and spending to both rise 0.3%.
Meanwhile, outside of the PCE report, initial unemployment claims inched higher to 198,000 claims from 191,000 claims the previous week. Continuing claims rose from 1.685 million to 1.689 million claims. Finally, Consumer Confidence increased to a reading of 104.2 in February following a 103.4 reading the previous month with analysts having projected confidence to drop to 101.5.
It may not be earnings season but there were still some relatively big names which reported quarterly earnings this week. Carnival (CCL), BioNTech (BNTX), Walgreens-Boots Alliance (WBA), McCormick (MKC), and lululemon athletica all managed to surpass earnings and revenue projections while seeing their share price rise following their reports.
Meanwhile, Micron (MU) missed on both earnings and revenue estimates but still saw its share price increase slightly. Micron announced that it will cut its staff by 15% as part of a cost reduction program and also saw its inventory issues improve.
All in all, the S&P 500 rose 3.48%, the Dow Jones Industrial Average gained 3.22%, and the NASDAQ increased 3.37%.