Markets March Higher As Concentrations Return

Broad indices moved higher last week, fueled primarily by technology stocks. Corporate earnings are higher across the board, but Mag 7 saw strong gains last

week. The month of April saw greater than a 10% return when all was said and done.1 According to the table, when the market is positive more than 5% in the month of April, the rest of the year has a better-than-average probability of ending positive, historically speaking. When April is up more than 5% the S&P 500 Index has been positive 90% of the time in May, going back to 1950. The remainder of the year has been positive 80% of the time, with an average return of +12.5% when April is up more than 5%, according to historical averages.

Last week's Jobs Report showed another solid month of job growth. The market was expecting only 75,000 jobs added for the month of April, but the report showed at least

123,000 jobs added. In addition, last month's report of 186,000 jobs added in March was revised higher to 190,000.2 If this recent trend continues into the latter half of the year, it could mean that the "low fire, low hire" environment in the labor market is coming to an end. Jobless Claims have been historically low and fairly steady this year, so any pickup in hiring would break the "low fire, low hire" trend.3

Economic growth, contrary to recent headlines, does not appear to be abating. The Atlanta Fed's estimate of 2nd quarter GDP for this year is at +3.7%.4 Most economists

agree that 3% GDP growth or higher is considered robust. Corporate earnings reports for the 1st quarter continue to come in higher than the historical average. In addition, analysts have increased earnings estimates for the 2nd quarter by at least 2.1% - the largest increase since the 2nd quarter of 2021.5 Consumer spending, which accounts for nearly two-thirds of GDP in the U.S., continues to increase. Consumer Credit for March came in higher at $24.9 billion, compared to February's results at $8.9 billion.6 Redbook Sales are higher by 7.8% on a year-over-year basis.7 If hiring picks up, consumers should have sufficient funds for spending, which could push corporate earnings higher, leading to further economic growth.

1.  S&P 500® | S&P Dow Jones Indices

2. United States Private Nonfarm Payrolls

3. United States Initial Jobless Claims

4. GDPNow - Federal Reserve Bank of Atlanta

5. Analysts Making Largest Increases in Quarterly EPS Estimates for S&P 500 in 5 Years

6. United States Consumer Credit

7. United States Redbook YoY

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