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 Sector Scopes April 2023 Update & S&P 500 Index (SPX.I)

The last week has generally been a constructive one for equity markets. The start to earnings season has been positive with US banks and regional banks reporting results that were significantly better than feared, confirming that the recent banking crisis has been contained. Results from other sectors have generally been in line with or better than expected, which has provided a supportive atmosphere for stocks.

On the economic side, China GDP beating expectations was also positive. Inflation data, however, particularly from the UK and Canada has been disappointing in that inflation has not fallen in those countries as quickly as had been hoped. This suggests that part of the recent accelerated dropoff in US inflation may be currency related. The US Dollar has been on the rebound in recent weeks, and the US 10-year treasury note yield has also been on the rise moving up toward 3.65% this week from a recent low near 3.25%.

The US Dollar rally combined with earnings season boosting investor confidence put a headwind in front of alternative currencies, sending gold back under $2,000/oz and Bitcoin back under $30,000. Commodities have also struggled this week with WTI Crude Oil rolling back down under $80.00/bbl.

Earnings reports dominate the news for the coming week with results due from a number of sectors including Big Tech, Big Oil, Big Pharma and Big Manufacturing out of the US and railroads, gold miners and energy producers in Canada. Headliners include: CN Rail on Monday, Microsoft, Alphabet, Visa, McDonalds, and UPS on Tuesday, Boeing, Canadian Pacific , Rogers and Meta Platforms on Wednesday.

Economic news for the coming week is mainly focused on the housing sectors plus Flash PMI numbers for the manufacturing and service sectors of several countries around the world are due on Friday.

In this week’s issue of Equity Leaders Weekly, we take our monthly look at Sector Scopes and at the S&P 500 approaching a potentially significant technical test.

Sector Scopes April 2023 Update

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