THE GIST (“THE WHAT”)
Erasing this week’s losses and shrugging aside weaker-than-expected economic data, the S&P 500 index (SPX) rallied sharply in its best day since January 2023, on the back of solid quarterly results posted by Meta, closing the day at session highs at 4135.35.
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THE DETAILS (The “How & Why”):
Opening the session above the previous session’s close, the index extended Tuesday’s gains and retook the 4100 level alongside a strong rally in tech stocks for the second day in a row after Meta reported its first quarterly revenue growth since last year, far exceeding wall street’s expectations. The social-media giant rocketed 14% after indicating that its recent attempts of drastic cost-cutting could potentially improve its bottom-line, buoying market optimism.
Other strong gainers on the back of strong earnings were Honeywell International (4.04%), Teledoc Health Inc (6.36%) and Comcast Corp (10.27%). Bucking the trend, Caterpillar Inc. fell despite posting better-than-expected results as investors focused on inventory build-up as a sign for slowing demand. Southwest Airlines also closed lower by 3.4% on wider-than-expected losses.
Meanwhile, weakish economic data failed to dent today’s optimism. US GDP data pointed towards softer-than-expected annual pace of growth during the first quarter of 2023, coming in at 1.1% compared to the expected growth of 2%. Inflation rose at 4.2% on an annual basis, compared to the 3.7% jump reported in fourth quarter 2022. Pending home sales also decreased 5.2% in March 2023, falling for the first time since November 2022.