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Bob Carey
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  US Stock Markets Ended May 14, 2021
Posted Under: Weekly Market Commentary

 
Markets ended a volatile week lower as investors fear inflation could hurt corporate profit margins and cause the Federal Reserve to end its easy-money policies. Consumer prices jumped by 4.2% year-over-year and 0.8% for the month of April, well above consensus estimates. Major contributors to the rise in prices were used cars, rental cars, airfare, lodging, and food away from home. In addition, producer prices rose more than economists forecasted. In other economic news, retail sales stalled in April after a sharp advance in March due partially to stimulus checks. Fears of higher inflation and interest rates led to a large selloff in many growth stocks. Shares of Tesla Inc., Trade Desk Inc and Square Inc. all fell by over 10% for the week. With an economic resurgence underway and higher rates potentially on the horizon, investors are dumping covid-winners for economically sensitive sectors. As earning season nears an end, NortonLifeLock Inc. surged on better-than-expected subscribers and a new buyback program. Shares of Hanesbrand Inc. slumped on disappointing guidance as the apparel maker restructures their business. Looking ahead to next week, traders will closely follow the Federal Reserve minutes for clues on potential policy changes as economic growth accelerates and prices paid increase. Also, how officials define "transitory" in respect to inflation. With over 90% of firms reporting results, earnings have surprised to the upside by over 20% for the first quarter. In our view, companies with reasonable valuations and improving fundamentals have room for further upside.
Posted on Monday, May 17, 2021 @ 8:15 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are 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.
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