US Stock Market Overview – Stocks Hit Fresh Highs and Continue to Melt up

US stocks moved higher on Monday, with the S&P 500 nad Nasdaq again hitting an all-time high which continued the bull market meltup. This comes ahead of Tuesday’s 2-day Fed meeting where littled change it expected from the central bank. US consumer spending rebounded in March, but inflation was softer than expected. Google parent company Alphabet reported after the closing bell. The beat on the bottom line and missed on the top line, pushing the stock price down in the after market. US yields moved higher, but remain rangebound which help buoy the financial sectors. Sectors were mixed, led higher by the financials, Utilities were the largest drag on the S&P 500 index. Later in the week, the markets will need to absorb the US employment number which will anchor the week on Friday.

US Consumer Spending Rebound, Inflation Remains Tame

US consumer spending rebounded in March, while core inflation eased to a one-year low, allowing the Federal Reserve to remain patient on interest rates even as growth reaches 3.2%. Consumer spending which makes up more than 66% of the economy, rose 0.9% in March from February, topping estimates with the best gain in almost a decade, after a 0.1% February increase, according to a Commerce Department. Personal income rose 0.1% in March, less than forecast.

Feds Inflation Gauge Dips

The Fed’s inflation gauge core PCE was up 0.1% from February according to the Commerce Department. Core PC was up 1.7% year over year. The headline PCE number increased by 0.2% for a 1.5% increase over the year. PCE inflation is the Fed’s key inflation metric. The central bank considers 2% a healthy level. The futures market is pricing in a 65% chance that the Fed will cut rates by the end of 2019 due to the low levels of inflation.

Alphabet Tumbles Following Financial Results

Alphabet shares fell about 5% after the company reported revenue that fell below analyst estimates for its Q1. The company reported ESP of $11.90 per shares versus expectations that it would earn $10.61 per shares. Revenue came in at $36.34 billion, versus expectations of $37.33 billion. Traffic acquisition costs were $6.86 billion, versus expectations of $7.26 billion. This metric represents the payments Google pays to companies like Apple to be the default search engine on their browser. Paid clicks on Google properties grew only 39% from the year-ago quarter, which his robust, but its a sharp drop from the Q4 which saw gains of 66%. The company’s hardware and cloud businesses reported a 25% increase to $5.45 billion. Alphabet’s startup Waymo and health venture Verily, remain very small, with revenue of $170 million, up from $150 million a year ago.

Another IPO in the Works

WeWork, which rebranded as the We Company early this year, said it filed confidentially with the Securities and Exchange Commission in December.