The Week Was Shortened In Observance Of Good Friday, But It Was A "Bad Week" For The Growth Stocks Amid Upwards Pressure In Interest Rates.
The impact of the growth stocks was reflected in the underperformance of the S&P 500 (‐2.1%) and Nasdaq Composite (‐2.6%) relative to the Dow Jones Industrial Average (‐0.8%) and Russell 2000 (+0.5%).
The small‐cap index closed higher, while the S&P 500 fell further below its 200‐day moving average (4495) and even closed below its 50‐day moving average (4418). The information technology (‐3.8%), communication services (‐3.0%), health care (‐2.9%), and financials (‐2.7%) sectors led the retreat.
The declines in the first two sectors were linked to the moves in the Treasury market, where the 10‐yr yield rose another 12 basis points to 2.83% despite a return of the peak inflation narrative. That narrative was supported by a brief, two‐day decline in rates following hot CPI and PPI data for March.
The Vanguard Mega Cap Growth ETF (MGK) fell 3.3%, whereas the Invesco S&P 500 Equal Weight ETF (RSP) decreased "just" 0.9%.
The financials sector, in particular, was pressured by an EPS miss from JPMorgan Chase (JPM) and a revenue miss from Wells Fargo (WFC). The other banks, for the most part, reported better‐than‐expected earnings results with mixed reactions.
There were some positives, though. The materials (+0.7%), industrials (+0.4%), energy (+0.3%), and consumer staples (+0.2%) sectors ended the week in positive territory.
Airline stocks were strong after American Airlines (AAL) raised its Q1 revenue guidance and Delta Air Lines (DAL) supplemented better‐than‐expected earnings results with upbeat bookings commentary. The U.S. Global Jets ETF (JETS) rallied 8.0% this week.