Last week, America’s collective mood remained somewhere between “mildly irritated” and “aggressively clipping coupons.” Jobs are holding. GDP is expanding (although slower than first thought). Housing is stuck. And durable goods looked great…if you're in the market for commercial aircraft.
- The S&P 500 Index gained 1.43% on the week and is now sitting at 7,580, a number so large it sounds like a ZIP code in a dystopian novel where everyone works in finance. Technology led while energy and consumer staples lagged. Growth demolished value and small caps edged out large caps. U.S. stocks beat international stocks.
- Bonds had a solid week. The Bloomberg U.S. Aggregate Index gained 0.83%. Fixed income spent most of the last three years getting kicked like a vending machine that owes you money, so we’ll take it. U.S. Treasury yields were mixed.
- Commodities and currencies: Crude oil fell to $87 a barrel this week, down from $96.60 the prior week, a drop big enough that even the guy with the “Drill Baby Drill” bumper sticker is doing the math. Gold closed at $4,593, which is either an inflation hedge or a cry for help. The U.S. dollar slipped against most major currencies.
- Consumer confidence slipped to 93.1 in May but still beat forecasts. Present conditions fell by 3.2 points, while future expectations rose by 1 point. Americans feel worse about now and better about later; the same optimism that convinces people they’ll organize the garage this weekend.
- The second estimate of 1Q26 GDP was revised down to 1.6% from 2.0% after consumer spending and business investment came in softer than expected—the economic equivalent of showing up to Woodstock and finding a polka band setting up on stage instead.
- Personal consumption expenditures (PCE) came in at 3.8% in April against a 2% target. Core PCE, which removes food and energy spending, was 3.3%. The PCE is the Fed's preferred inflation measure; Main Street has its own preferred inflation measure, and it involves a cart full of groceries and a moment of silence at the register.
- Americans’ savings cushion is now thinner than the instruction manual for Swedish furniture that’s mostly just a picture of an Allen wrench. It fell from 3.6% in March to 2.6% in April. Personal income was flat and spending was up. Two-thirds of Americans have cut back on spending while still allocating budget toward what the report officially called “cheap thrills,” like amusement parks and day spas. We are a nation tightening our belts one streaming tier at a time, which is either admirable fiscal discipline or the saddest sentence ever written.
- Durable goods orders jumped 7.9% in April, which sounds like the economy is finally bench pressing its body weight. But it’s not. It measures orders for things built to last 3 years or more: machinery, industrial equipment, the stuff that tells you whether businesses truly believe in their own future. Strip out aircraft and the number dropped to 1.1%. Companies ordered planes. Then they stopped.
- The labor market is the Keith Richards of this economy. Initial jobless claims were 215,000 for the week ending May 23. Continuing claims for the week ending May 16 rose 15,000 to 1,786,000, a sign that people are taking longer to find work after a layoff.
Earnings
- 1Q26 earnings season is nearly over. 96% of S&P 500 companies reported, blended earnings growth came in at 29% year over year, and 84% beat estimates. Somewhere between the record-low sentiment and the $4.76 gas, corporate America had a great quarter. The stockholder and the consumer are the same person having a very confusing year.