This week had a little bit of everything: Cinco De Mayo Fiestas, more whiplash geopolitical headlines, jaw dropping earnings, a couple of Knicks victories and the release of UFO files, which seemed to spark a rally in the space stocks today (UFO ~+7%). Amidst it all the S&P 500 extended its winning streak to six weeks up >2%, tagging 7,400 today. As the AI trade is back in full swing the market cap-weighted version of the index is outperforming the equal-weight version for the first time this year.

The mega-cap tech triumvirate (info tech, comm services, cons. discret) were the only sectors with meaningful gains. It was not just semiconductors within info tech as software was also up ~5%. Away from the tech-heavy sectors, industrials is one of the few trading higher this week. There has been a mixed response to some of the aerospace and defense earnings, but companies levered to the data center buildout and automation have had very strong results. Energy and Utilities have been the big underperformers for the week, both down >3%. Financials and healthcare were both down a bit more than 1% and are the only two sectors lower YTD.

Looking ahead to next week, the long-awaited Trump/Xi Summit will finally happen. Economic data shifts to inflation with April CPI the headliner. Earnings will continue to be busy but will be less impactful going forward until we start to get late cycle tech and retail earnings later this month. The Middle East will remain a focal point. The Senate is expected to vote on Kevin Warsh’s nomination as Fed Chair with Jerome Powell’s term coming to end May 15. It’s also a monthly options expiration at the end of the week. The Knicks will hopefully head to the Eastern Conference Finals. Most importantly, Happy Mother’s Day!!!