The shares jumped on Monday morning, as the three main indexes wanted to start in May with a high note.
The S&P 500 added about 0.6%. On Friday, the index ended lower, but still closed its best month since November with a monthly advance of over 5%. In April, communications services and consumer discretionary sectors led to gains in the S&P 500, returning to a leading position after falling behind earlier in 2021 amid rotation in cyclical and “opening” stocks. However, growth names made some gains last week, with Federal Reserve Chairman Jerome Powell stressing that some asset valuations looked “sparkling”
Still, a wave of stronger-than-expected profits from companies in various industries helped drive the upward movement in the wider market, with corporate profits returning along with growing economic activity. As of Friday, 86% of S&P 500 companies exceeded first-quarter earnings expectations, according to FactSet. This will mark the highest share since at least 2008, if maintained until the end of the season in the first quarter. Companies including Uber (UBER), Lyft (LYFT), Square (SQ), Peloton (PTON) and Pfizer (PFE) are ready to report results later this week.
At the heart of the economic recovery is the strong rate of vaccinations in the United States, which in turn has allowed more businesses across the country to reopen and strengthen consumer confidence in returning to a semblance of normalcy. As of Sunday, more than 104 million Americans had been fully vaccinated, according to data from the Centers for Disease Control and Prevention, to make up nearly a third of the country’s total population.
However, some strategists have warned investors to calm down, with very good news about the recovery, which is now well appreciated in the markets.
“I think the market is valued almost to perfection, right? We appreciated the good introduction of vaccines. We appreciated the strong opening up to the economy. I’m a little worried about the second half of the year,” Alan Boomer, chief investment officer at Momentum Advisors, told Yahoo Finance. “I think it’s possible that incomes have peaked in the short term and … it’s a great quarter, but I don’t know the rest of the year will be as strong.”
“One of the things I think you’re going to start seeing is that we have a labor shortage in the United States. We’re talking about job losses. We’re not really talking about the fact that there are a lot of companies that have a lot of inconspicuous jobs. “, he added. “So I think you’re going to start seeing in the second half especially companies that rely on manpower, you’re definitely going to start seeing some problems around labor shortages.”
The Department of Labor will release its report on jobs in Friday on April, which is expected to show a staggering nearly 1 million salaries returned last month, accelerating from profits in March.
9:31 a.m. ET: Shares open higher
Here is where the markets open on Monday morning:
S&P 500 (^ GSPC): +23.16 points (+ 0.55%) to 4,204.33
Dow (^ DJI): +199.09 points (+ 0.59%) to 34,073.94
Nasdaq (^ IXIC): +64 points (+ 0.46%) to 14,028.74
Raw (CL = F): + $ 0.24 (+ 0.38%) to $ 63.82 per barrel
Gold (GC = F): + $ 20.90 (+ 1.18%) to $ 1,788.60 per ounce
10-year treasury (^ TNX): -1 bp to 1.621% yield
9:27 a.m. ET: Verizon to sell media business, including Yahoo Finance to Apollo in $ 5 billion deal
Telecommunications giant Verizon (VZ) said Monday it had agreed to sell its media business segment, including Yahoo and AOL, to equity firm Apollo Global Management. Verizon is currently the parent company of Yahoo Finance.
The $ 5 billion deal is expected to close in the second half of the year and will rename the business, now known as Verizon Media, as Yahoo. Other brands in the portfolio include TechCrunch, Makers, Ryot and Flurry. The Verizon media group reported revenue of $ 1.9 billion in the first three months of 2021, a 10% increase over the previous year.
8:00 a.m. ET: “Capex, R&D and M&A will account for most of corporate cash spending in 2021”: Goldman Sachs
With the uncertainty of a pandemic lifting, corporations have begun to announce ambitious new strategies, many of which involve huge investments in their future growth. According to Goldman Sachs’ chief market strategist in the United States, David Costin, these costs will focus on one of the three key areas.
“Capex, R&D and M&A will account for the bulk of corporate cash spending,” Costin wrote in a note Monday morning. “Many companies have used the first quarter reporting season to announce significant new growth initiatives. US spending plans from AAPL ($ 430 billion over 5 years) and capital increases from INTC ($ 20 billion) and WMT (14 billion dollars) are remarkable examples.
“We forecast + 19% recovery in the use of money in 2021 and + 6% growth in 2022,” he added. “The tax poses an obvious risk to the cash flow trajectory in 2022 and beyond.”
7:27 a.m. Monday: Stock futures point to a higher open
Here is where the markets traded before the bell on Monday morning:
S&P 500 futures (ES = F): 4,194.75, an increase of 20.25 points or 0.49%
Dow futures (YM = F): 33,967.00, an increase of 200 points or 0.59%
Nasdaq Futures (NQ = F): 13,884.00, an increase of 34.25 points or 0.25%
Raw (CL = F): + $ 0.08 (+ 0.13%) to $ 63.66 per barrel
Gold (GC = F): + $ 10.80 (+ 0.61%) to $ 1,778.50 per ounce
10-year treasury (^ TNX): +1.3 bps for yield 1.644%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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