Three Things to Watch
- A host of economic reports are expected this week, including the JOLTS data (job openings and labor turnover survey), new home sales and the highlight on Friday—the April employment report. Nonfarm payrolls are expected to increase a tepid 62,000, while the unemployment rate is expected to be unchanged at 4.3%.
- Inflation concerns remain heightened, and Friday’s University of Michigan Consumer Sentiment report includes one- and five-year inflation expectations. After the war began in April, both jumped significantly and are expected to remain elevated with the one-year number forecast at 4.7% for May, unchanged from last month.
- Last week was the busiest week of earnings season, but there are still almost 200 members of the S&P 550 to report. Earnings continue to surprise on the upside with 81% of companies reporting positive surprises, led by the energy and technology sectors. This week’s reports include Palantir, Disney, Uber and AMD.
Three Things to Know
- Information technology equipment spending surged 31% annualized over the past five quarters versus a 6% trend from 2010 to 2024. Software investment ran at 15% versus a 9% trend, both in real, inflation-adjusted terms. (Source: Carson Investment Research)
- Spirt Airlines declared bankruptcy and cancelled all flights on May 2, in part due to higher jet fuel prices. At the time of the bankruptcy, Spirit was spending an additional $10 million to $15 million on fuel per week as a result of the war. (Source: The Kobeissi Letter)
- According to the University of Michigan survey, one-year inflation expectations jumped to 4.7% in April (up from 3.8% in March). Source: (Haver Analytics)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.