Weekly Market Report: May 14, 2024

USA

The S&P 500 Index saw increases for a third week in a row as it got closer to its all-time high. The other main indices saw gains as well, with growth shares generally underperforming value stocks. A largely calm and predictable economic calendar seemed to be reflected in the quiet trading week, however several individual equities saw significant movements in response to first-quarter earnings reports.

The main event on the limited economic calendar this week appeared to be an unexpected increase in weekly jobless claims, at least according to investors. In the week that concluded on Wednesday, the number of persons collecting unemployment benefits increased to 231,000, the highest level since August of last year. Another indication that the job market and overall economy may be cooling was released on Friday. The University of Michigan revealed prior to the start of trade that its preliminary index of consumer confidence in May dropped sharply to 67.4, from a final reading of 77.2 in April, which was the lowest level in six months.

Tuesday saw the yield on the benchmark 10-year U.S. Treasury note fall to an intraday low of almost one month, but it ended the week largely unchanged.

Europe

Better-than-expected corporate profits and growing hope that major central banks would soon begin lowering interest rates contributed to the STOXX Europe 600 Index's 3.01% closing gain. Key stock indexes saw a strong increase as well. The DAX in Germany rose 4.28%, the CAC 40 Index in France gained 3.29%, and the FTSE MIB in Italy gained 3.06%. The FTSE 100 Index in the UK increased by 2.68% to reach a new high.

Japan

Both the larger TOPIX Index and the Nikkei 225 Index in Japan saw slight weekly losses. In light of the possibility that inflation has grown more vulnerable to the effects of the yen's depreciation, Governor of the Bank of Japan (BoJ) Kazuo Ueda hinted that the central bank would raise interest rates sooner rather than later if upside risks to the price outlook materialize. Some commentators think that another interest rate hike is unlikely to support sustainable yen appreciation because the U.S.-Japan interest rate differentials are still very large.

China

Chinese stocks advanced as recovery hopes rose following buoyant holiday spending during the prior week’s Labor Day holiday. The Shanghai Composite Index rose 1.6%, while the blue chip CSI 300 gained 1.72%. In Hong Kong, the benchmark Hang Seng Index added 2.64%

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