As the trading day draws to a close, it’s evident that this week has been quite turbulent. The noteworthy aspect is the market’s resilience in rebounding from early losses, despite a concerning uptick in producer prices and escalating bond yields.
This contrasts with Tuesday’s trading pattern, where a similar surge in consumer prices led to a sharp rise in bond yields and a corresponding plunge in stock prices.
Remarkably, the S&P 500 managed to clinch a record high by the end of Thursday, nudging the index slightly above the breakeven mark for the week.
Should these gains hold, it would mark the S&P 500’s ascent for the fifteenth time in the past sixteen weeks, signifying a remarkable streak of success.
Shifting focus to Friday’s market dynamics, it’s worth noting that the S&P 500 is holding steady without significant contributions from the Magnificent Seven—Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla.
Most of these stocks are trading lower today, save for Nvidia and Tesla. Notably, Jim Cramer rebranded the group as the Significant Six after excluding Tesla. Within our Club portfolio, we maintain positions in all six of these market leaders.
Noteworthy sectors driving Friday’s market performance include materials, healthcare, and consumer staples.
Among the standout performers this week, Wells Fargo emerged as the top gainer, propelled by a 7% surge on Thursday following regulators’ termination of a consent order.
GE Healthcare followed closely behind, buoyed by a favorable upgrade from UBS on Monday and a bullish initiation from HSBC with a Street-high $100 price target on Thursday.
Despite initial concerns over a 13 million share secondary offering tied to General Electric’s stake in GE Healthcare, the stock reversed early losses on Friday, indicating robust resilience. Other notable winners this week included Eli Lilly, Foot Locker, Danaher, Linde, and Disney.
Conversely, mega-cap tech stocks weighed heavily on our portfolio’s performance this week, with Alphabet, Microsoft, Apple, and Amazon among the notable laggards. Starbucks also struggled, prompting us to increase our position on Wednesday as shares retraced to pre-earnings levels.
While Starbucks faces the challenge of reigniting same-store sales growth, the stock’s resilience post-earnings suggests that much of the downside has already been factored into current valuations.
