US Stock Market Overview – S&P and Nasdaq Close a Fresh All-time Highs

US stocks moved higher on Friday, with the S&P 500 and Nasdaq closing at all-time highs. The S&P 500 large cap index closed the week up 1.2%. Most sectors were higher, driven by Healthcare and Consumer staples. Energy shares bucked the trend. Crude oil prices tumbled on Friday, as President Trump attempted to cap gains by saying that he spoke with OPEC and they agreed to open the spigots. The first look at Q1 2019 GDP showed stronger than expected gains, which were driven by a large rebound in exports.

The S&P 500 and Nasdaq continued to outpace the Dow Industrials as many of the large-cap tech companies showed very robust earnings. To date, earnings have come in stronger than expected by double-digit levels, compared to the historical norm of 3%.

Crude Oil Tumbles on Trump Comments

Ahead of the US driving season as gasoline prices are on the rise, President Trump today announced that he had spoken with OPEC about increasing production. Prices tumbled bringing down energy shares. The oil markets have been rising because OPEC has reduced production and Trump has eliminated the waver he gave nations who had been previously been purchasing Iranian oil. It appears that Trump wants it both ways. He wants to reduce Iranian oil to zero, to get a better deal, and wants OPEC to make up the difference. He was on the same track in November of 2018, and OPEC was pumping more oil to make up for the Iranian shortfall, but then he granted waivers which pushed oil prices lower, which was not looked on favorably by OPEC. This time around, OPEC will not help out.  While Trump wants lower prices and higher OPEC output, OPEC wants higher prices and higher OPEC output.

Neither Saudi Arabia’s energy minister nor OPEC’s secretary general discussed lowering oil prices with President Donald Trump, denying the U.S. leader’s earlier claim. Trump told reporters he had “called up” OPEC and urged the producer group to take action to bring down fuel costs. The comments took oil priced down 4%.

OPEC Secretary General Mohammed Barkindo did not discuss the matter with Trump, and neither did Saudi Energy Minister Khalid al-Falih. Saudi officials also said that Trump did not speak with Crown Prince Mohammed bin Salman. The discussion did not involve Venezuelan Oil Minister Manuel Quevedo, who currently holds OPEC’s rotating presidency, one of the country’s oil officials told the Wall Street Journal. It is now clear that the US President is jawboning, which could backfire.

First Quarter GDP Rose

First-quarter GDP grew by 3.2%, according to the Commerce Department. Expectations had been for GDP to expand by  2.5%. It was the first time since 2015 that first-quarter GDP topped 3%. Most of the gains were driven by a rise in exports and a decline in imports. Personal spending though, the biggest component was up just 1.2%. Exports rose 3.7% in the first quarter, while imports decreased by 3.7%. Disposable personal income increased by 3%, while prices increased by 1.3% when excluding food and energy. Overall prices climbed by 0.8% in the first quarter.