2023 | May 15

The Market

Stocks Mixed

The S&P 500 and the Dow finished with small weekly declines while the NASDAQ eked out a tiny gain, repeating the pattern from the previous week, with the Dow underperforming again and the NASDAQ outpacing both of its peers.

An index of U.S. small-cap stocks lagged its large-cap peers in the latest week, extending the asset class’s run of year-to-date underperformance. The Russell 2000 Index finished down about 1% for the week and is down about the same amount since the end of 2022.

Since the start of April, the major U.S. indexes have continued to trade in a narrow range as quarterly earnings season has progressed. The S&P 500’s highest closing level during that period was 4,169 points on April 28—less than 3% above its low point of 4,056 two days earlier. On Friday, it closed at 4,124.

While U.S. inflation slowed for the tenth consecutive month, the latest Consumer Price Index reading didn’t register a big easing of prices, as inflation slowed to a 4.9% annual rate in April versus 5.0% in March. Excluding energy and food, prices climbed 5.5% versus 5.6% the previous month.

While the latest week’s decline in crude oil prices was modest, it marked the fourth negative week in a row. U.S. crude was trading around $70 per barrel on Friday, down from a recent peak of more than $83 on April 12. At the end of 2022, oil was trading around $80.

The price of Bitcoin, the most widely traded cryptocurrency, fell nearly 11% to its lowest level since mid-March. Bitcoin was trading at around $26,400 on Friday, down from about $30,000 a month earlier.

As with the modest moves seen in the U.S. stock market recently, volatility in the government bond market has also eased relative to the big moves seen in early March. Since then, the 10-year U.S. Treasury bond yield has moved in a narrow range of as high as 3.60% to as low as 3.29%, with Friday’s yield at around 3.46%. In early March, it peaked at 4.07%. 

With 92% of S&P 500 companies having reported first-quarter results as of Friday, the proportion of S&P 500 companies that have beaten analysts’ earnings expectations remained slightly higher than usual. So far, 78% of companies have exceeded net income expectations, topping the 10-year average of 73%, according to FactSet.  

Source: John Hancock Investment Management

Media Predictions

It's a Grill Rush!

Since its post-pandemic re-opening, the Chinese economy has been recovering more slowly than many companies and investors anticipated. But there’s one industry that’s red hot: food tourism. Domestic tourists have been flocking to a small industrial city that has become the epicenter of a national obsession with grilling.

Thousands of tourists have been traveling to the central province of Shandong to experience grilled kebabs and taking pictures of the experience for social media. The skewers are cooked, flattened and dipped in garlic chili paste before being coated in sesame seeds and peanuts. According to The Economist, crowds have been so large that arenas are being remade into temporary dining halls, and banks are issuing low-interest loans to support companies in grilling-related industries.

The great grilling frenzy highlights a social media trend that’s currently popular among young people in China: Special-Forces tourism. The mission of these tourists is the experience – find and eat tasty food while forgoing sleep and spending as little time and money as possible. Some travel to more than 10 locations in a single day. Kebabs and a local beer hit the sweet spot for special-forces tourists. Altogether, the meal and drink cost hungry travelers about $0.40 in US dollars.

Kebabs are a delicious addition to summer grilling recipes.

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eMoney

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